- Can IT specialists be engaged/contracted directly by a foreign company?
- Can IT staff be engaged as contractors?
- Should contractors be registered as private entrepreneurs (or equivalent)?
- Can teams be hired via an intermediary (an outsourcing company) and is this common?
- What is the risk of re-qualification into employment relationships?
- Is a local presence for the foreign company mandatory to hire an IT team?
- If a local presence is mandatory, what form should it take?
- Are any regulatory approvals needed to hire an IT team?
- Can a foreign company lease premises locally for the hired team?
- Can a customer compensate a contractor (intermediary) for the leased premises?
- What kind of agreements should be entered into between the IT specialist and a foreign customer?
- What kind of agreements should be entered into between a foreign customer and an intermediary?
- Can payments between the contractor (intermediary) and a customer be made in a foreign currency (USD, EUR, GBP)?
- Can moral rights be transferred to a customer?
- Is ‘work for hire’ recognised in your jurisdiction?
- What documents are necessary to transfer proprietary IP rights properly?
- Are noncompete/non-solicitation arrangements enforceable?
- Can foreign law govern contracts between the customer and a contractor (intermediary)?
- Are warranties/indemnities recognised concepts?
1. Can IT specialists be engaged/contracted directly by a foreign company?
Yes.
2. Can IT staff be engaged as contractors?
Yes.
3. Should contractors be registered as private entrepreneurs (or equivalent)?
Optional. Contractors can act either as independent contractors, with a registered commercial activity, or dependent contractors acting as individual persons with no registered commercial activity.
4. Can teams be hired via an intermediary (an outsourcing company) and is this common?
Yes, common.
In practice, this depends on the size of the team to be engaged. Use of an intermediary may entail some legal risks. If the end-client contracting with the outsourcing entity strongly supervises the third-party IT staff, the end-client runs the risk that the IT specialist may try to establish a direct relationship with the end-client. Further risks might be relevant if the outsourcing structure is deemed to be temporary work service provided by the entity without having a proper licence. Additionally, the signing or ending of the outsourcing agreement could trigger a TUPE/ARD automatic transfer of IT staff from the end-client to the outsourcing company or vice versa.
5. What is the risk of re-qualification into employment relationships?
Low to high. When analysing the reclassification risk and whether a given contractor qualifies as an employee, all circumstances, including the wording of the contract and the factual manner of service provision, must be taken into account. The reclassification risk would be relevant if the company treats the contractor on a day-to-day basis as an employee, in particular if the company asks him/her to sign an attendance list, tells him/her when and how she/he must perform the tasks, issues binding work orders and subjects him/her to constant supervision, runs employee-like appraisals; pays him/her for absences due to sickness or holiday, etc.
6. Is a local presence for the foreign company mandatory to hire an IT team?
No.
A hiring entity that has no legal presence in Poland and engages Polish contractors potentially faces a tax risk of creating a permanent establishment (PE) in Poland and paying local corporate tax. The PE concept is quite broad. It exists when a foreign entity carries on a commercial activity in a Poland through a “fixed” place of business or has a “dependent agent” in Poland.
7. If a local presence is mandatory, what form should it take?
N/A
8. Are any regulatory approvals needed to hire an IT team?
No.
9. Can a foreign company lease premises locally for the hired team?
Yes.
This is not recommended as it could increase the risks of reclassification into employment and a permanent establishment. In practice, some companies recharge the costs of using the premises to the contractor and increase the fee to compensate for this.
10. Can a customer compensate a contractor (intermediary) for the leased premises?
Yes.
See above.
11. What kind of agreements should be entered into between the IT specialist and a foreign customer?
Depending on the case and the characteristics of the engagement, a service contract or an employment contract, along with IP assignment arrangements.
12. What kind of agreements should be entered into between a foreign customer and an intermediary?
IT service agreement together with IP assignment arrangements.
13. Can payments between the contractor (intermediary) and a customer be made in a foreign currency (USD, EUR, GBP)?
Yes.
14. Can moral rights be transferred to a customer?
No.
15. Is ‘work for hire’ recognised in your jurisdiction?
No.
There is a similar concept of employee-created software. The economic copyrights to such software, created as a result of performing employment obligations, are vested by operation of law with the employer. For copyrightable works other than software, e.g. documentation, created by employees as a result of performing employment obligations, the economic copyrights are transferred by operation of law to the employer. Those rules only apply to employment relationships and can be modified by contract.
16. What documents are necessary to transfer proprietary IP rights properly?
Written agreement on the transfer of IP rights, in particular economic copyrights
17. Are noncompete/non-solicitation arrangements enforceable?
Limited. The enforceability of non-competition/non-solicitation provisions depends on: whether the contractor is a dependent or independent contractor; on the scope of the restrictions; whether they apply during or after the duration of the contract; and on the company’s and the contractor’s position on a given market. Given the complexity of this issue, we recommend running a careful analysis on a case-by-case basis.
18. Can foreign law govern contracts between the customer and a contractor (intermediary)?
Yes.
The choice of foreign law may be partially limited regarding, e.g. the transferability of certain IP rights, by some provisions of Polish law which may apply regardless of the foreign law governing a contract.
19. Are warranties/indemnities recognised concepts?
Yes.
Yes, they are often used in practice but need to be adjusted to local rules to be effective.
