Digital Nomad Hub
B2B Model
Expats residing in Poland often encounter "B2B cooperation" situations, where companies or individuals opt for a business-to-business model instead of traditional employment contracts. Here are a few scenarios when this might happen:
Example 1
Mark's Shift from Employment to B2B
Mark has been employed by Company A for five years under an employment contract, which subjects him to tax rates as high as 40%. For Company A, this is a significant cost when considering the full tax burden. The company decides to terminate the employment contract but offers to continue their collaboration on the condition that Mark opens a Sole Proprietorship (JDG), LLC, or partners with a startup that handles the taxes.
- With a Sole Proprietorship, Mark would be responsible for ZUS social security contributions.
- With an LLC, withdrawing money can be cumbersome.
- Mark opts for a startup, which allows him to benefit from a 6% PIT (personal income tax) rate and avoid ZUS contributions, simplifying his financial obligations.
Example 2
Mark's Relocation to Poland and Search for Residency
Mark has recently arrived in Poland and works remotely as a content creator for a Mexican company. His payments are settled to his international bank account. Mark, being from Mexico, can stay in Poland for up to 90 days without a visa. However, after falling in love with the country, he decides to stay longer.
- Since Poland does not have a digital nomad visa program, Mark needs to work for a Polish entity to secure a work and residence permit. Opening his own company for a single activity is costly and complicated, so he chooses to collaborate with a startup. This allows him to gain legal status through work while benefiting from the startup’s tax structure.
Example 3
Mark Wants to Test His Business Idea
Mark is considering starting his own business but wants to test the waters with minimal costs. A startup offers low income tax rates and reduced or waived ZUS contributions, making it an attractive option for someone wanting to experiment with a business model. The startup arrangement provides an opportunity to validate whether his business idea is worth a larger investment, all while keeping expenses low.
When Can B2B Cooperation Happen?
B2B cooperation in Poland often arises when companies or individuals seek to minimize tax burdens, manage administrative complexities, or comply with immigration requirements. Expats may transition to this model when:
- Employers seek cost-effective alternatives to traditional employment contracts.
- Remote workers wish to stay in Poland long-term but need a work permit to do so.
- Entrepreneurs or freelancers want to explore business opportunities with fewer upfront costs.
- This flexible model offers significant tax and administrative benefits compared to standard employment arrangements.