The still vague announcement by Prime Minister Mateusz Morawiecki about “moving towards calculating ZUS contributions based on the entrepreneur’s income” has again brought solemn assurances that entrepreneurs are already leaving “for Slovakia” and warnings about a mass exodus of business abroad. I cannot count how many times I have seen such an economic mobilization. I will surely receive many calls and emails starting with the claim that supposedly in country “X” there is low ZUS and how to set up a company there.
Let us start with the myths. There is no, there has not been, and there will not be a great exodus of entrepreneurs. Not even because they are not tempted, but because such a business flight (let us call it more professionally – relocation of the company’s seat) is a very complicated process in which tax, legal, business, and personal issues must be considered. Carrying out such a transfer of business activity hastily and on impulse, without rational analysis, can prove costly and instead of savings cause only losses.
As for the facts, above all one must accept that in the era of MDR, CRS, CFC, the anti-avoidance clause, transparent UBO registers, and generally speaking – after the post-Panama Papers regulatory tightening – the room for maneuver for aggressive international tax planning has dramatically shrunk. This does not mean that international structures are pointless – it means they must be well-designed, compliant, and have genuine business substance.
The key factors to consider when thinking about relocating business abroad include: actual management location, tax residency of the entrepreneur, substance requirements, reporting obligations (CRS, MDR, CFC), and the total cost of maintaining a foreign structure (legal, accounting, banking fees).
In summary: there will be no escape. But there can be intelligent, well-planned internationalization of business – provided it is done properly, with proper legal and tax advice, and for genuine business reasons, not just to avoid ZUS.
Paweł Osiński
Attorney
Expert in international corporate law and cross-border transactions