25% of companies opened abroad by Ukrainians since 2022 were registered in Poland. Other popular countries include the United Kingdom (13%), the USA (11%), Cyprus (9%), and Estonia (7%). These statistics come from reports submitted to the Ukrainian tax authorities regarding Controlled Foreign Companies (CFCs). In 2023, every tenth company registered in Poland belonged to Ukrainians. The main reason for this growth is the full-scale war in Ukraine.
Why are Ukrainians so attracted to Poland and Estonia for doing business? What conditions do these countries offer, and how can you start a business there? Ivan Chebotaryov, Business Strategic Development Manager at Finevolution, shares his insights.
Pros and cons of doing business in Poland and Estonia
The popularity of Poland and Estonia among foreign entrepreneurs is primarily due to their tax systems, the ability to register and manage businesses online, and the developed IT sector.
Both countries are also notable for their favorable attitudes toward foreign entrepreneurs. For example, many government websites, banks, and other services in Poland offer English language interfaces and support. Estonia, on the other hand, has entrepreneurship support programs, such as the e-Residency program.
Estonia is considered Poland’s main competitor in terms of business registration and reporting ease. The USA, Romania, and Cyprus are also popular in our clients. The UK is considered due to its use of English law, business incentives, and relatively easy company registration process. However, each of these countries has its tax and legal nuances that are not as attractive as in Poland or Estonia.
How to register a business in EU, where to start
First, it is important to understand that clear and transparent rules apply to all businesses in the EU. For example, data can be easily tracked through foreign registries, meaning that government oversight bodies, banks, and financial institutions can access all necessary information about you and your companies abroad. For instance, Estonia has one of the highest levels of digitalization in the world, making it easy to track any of your activities, including financial ones.
In both Poland and Estonia, businesses can be registered online. In Poland, you need to obtain an electronic signature and have tax number — PESEL. In Estonia, you need to fill out a special online form on the e-Residency website, wait for the verification process, and then collect your digital resident ID card at the Estonian Embassy in your city, for example. This card allows you to securely authenticate yourself and sign documents online using an electronic signature.
After registering a company, there are two options for receiving funds into the company’s account. The first is to open an international account with payment systems like Revolut, Wise, Paysera, and Payoneer. These systems can be an excellent solution when starting a business.
The second option is to open a bank account in the country where the business is registered. The company owner must personally go to the bank in Poland and Estonia. For example, in one case, a company was registered in Poland, but the bank account was not opened within six months because the director could not visit the country. As a result, the company could not operate, and after six months, it lost its tax number. Although it was restored quickly, these delays caused the start of the business to be postponed by almost a year. Therefore, business owners should consider administrative deadlines from the outset to avoid delaying the business start.
Opening a bank account in the European Union is challenging, especially regarding the detailed scrutiny of company directors before opening an account. To pass this check successfully, the director must provide the bank with a detailed and transparent description of the company’s future activities, including the type of services or products, the main users of the services, and the location of the main contractors. Additionally, the bank may review your official websites and social media pages.
For comparison, it is very easy to register a business in Estonia. Still, to open a bank account, you must have a physical office, employees, and a financial history, which is extremely difficult for foreigners. An optimal alternative is to open an account with the Payoneer payment system, which complies fully with European legislation, or to open a bank account in another accessible European jurisdiction. The company’s bank account does not necessarily have to be opened in Estonia. In Poland, this rule is not mandatory, and companies are often registered at so-called “mass registration addresses.” However, some banks still require the entrepreneur to have a physical office.
