Polish LLC (Sp. z o.o.) for STR 2026: When to Switch From JDG

Sp. z o.o. for STR Rental: When It Pays to Switch from JDG in 2026

Above about PLN 600,000 in annual income and 3-4 apartments on short-term rental, a sp. z o.o. starts to pay off more than JDG. The CIT rate of 9% (small taxpayers up to EUR 2 million) or estoński CIT beats ryczalt 12.5%, but the advantage is greatest when the owner reinvests profit rather than paying it out. See the full comparison and the transition procedure.

The choice of legal form for short-term rental is not obvious. JDG (sole proprietorship) on ryczalt 8.5%/12.5% is the simplest, but a sp. z o.o. (Polish LLC) offers many benefits which, above a certain scale, deliver real tax savings and asset protection. This article is a practical guide for STR hosts who are considering forming a company or transforming their JDG.

Basics: JDG vs Sp. z o.o. for STR

JDG is the activity of a private individual, governed by the Entrepreneurs' Law Act of 6 March 2018. The owner is liable with all of their property for obligations, including tax. A sp. z o.o. is a separate legal entity (legal person), governed by the Polish Commercial Companies Code (KSH). The shareholder is liable up to the amount of the contribution made, not with private assets.

Benefits of a Sp. z o.o. for STR

• Limited liability: your private assets (apartment, car, savings) are protected from claims by guests, KAS, suppliers
• CIT rate of 9% for small taxpayers up to EUR 2 million in income (~PLN 9 million) instead of PIT 32%
• Estoński CIT: on reinvestment the profit stays in the company untaxed until it is paid out, and on payout the combined burden (CIT + shareholder's PIT) is about 20% for a small taxpayer
• Full deductibility of costs: car, phones, cleaning, legal services, furnishings (note: depreciation of the residential units themselves has been banned since 2023, both in PIT and CIT)
• Possibility to sell the company as a whole as a business case
• Continuation after the owner's death without inheritance proceedings

Drawbacks of a Sp. z o.o.

• Full accounting (3 to 8 times more expensive than simplified for JDG)
• Mandatory audit of the financial statements after thresholds are exceeded (rare for STR)
• Filings to the National Court Register, to the tax office, to the Central Statistical Office (CIT-8, VAT-7, JPK)
• Harder to "extract" money: dividend, remuneration, loan
• Double taxation of profit under classic CIT (once company 9%, once owner 19%)

Comparison Table: JDG vs Sp. z o.o. for 4 Apartments

Assumptions: 4 STR apartments, total annual income PLN 600,000, operating costs PLN 180,000.

Parameter	JDG ryczalt	Sp. z o.o. CIT 9%	Sp. z o.o. estoński CIT
Gross income	PLN 600,000	PLN 600,000	PLN 600,000
Costs (deductible)	0 (ryczalt)	PLN 180,000	PLN 180,000
Income to be taxed	PLN 600,000	PLN 420,000	0 to PLN 420,000
Income tax rate	8.5%/12.5%	9% (CIT)	10% CIT on payout (0% on reinvestment)
Income tax	PLN 71,000	PLN 37,800	PLN 0 on reinvestment
Owner's ZUS	~PLN 22,000 (full ZUS + health)	~PLN 22,000 if sole shareholder*	~PLN 22,000 if sole shareholder*
Annual accounting	PLN 2,400	PLN 9,600	PLN 9,600
Total burden (annual)	~PLN 95,400	~PLN 69,400	~PLN 31,600 (on reinvestment)

*Note: the sole shareholder of a single-member sp. z o.o. is subject to ZUS like an entrepreneur (Art. 8(6)(4) of the Social Insurance System Act) - this cannot be avoided merely by not drawing remuneration. A shareholder in a multi-member company does not pay ZUS on the basis of holding shares alone. Additionally, when profit is paid out of the company (dividend or estoński CIT), the shareholder's PIT applies, so the combined burden on payout is about 26% (classic CIT) or about 20% (estoński CIT for a small taxpayer).

At the level of income tax alone the difference favours the company, but the real profitability depends on whether you reinvest the profit (where the estoński CIT advantage is greatest) or pay it straight into your private pocket.

When It Pays to Switch from JDG to a Company

Golden rules:

1. Income above PLN 600,000: company CIT 9% beats ryczalt 12.5%
2. Above 3 apartments: company accounting becomes relatively cost-effective
3. Reinvestment plan in further apartments: estoński CIT means 0% tax
4. Legal risk: a guest files a high-value lawsuit, protection of private assets
5. Owner already has other income: PIT 32% in JDG, but CIT 9% in the company
6. Plan to sell the business: the company is sellable as a whole, JDG is not

Procedure for Transforming JDG into a Sp. z o.o.

Variant A: forming a new company and contribution as in-kind

The most common approach. Step by step:

1. Form the sp. z o.o. (S24 online or at the notary)
2. Contribute the JDG enterprise to the company as in-kind (donation/sale agreement)
3. Update the platform contracts (Airbnb, Booking) to the company NIP
4. Update the CWTON entry to the company entity
5. Close JDG via the CEIDG-1 application
6. Settle the final PIT-28 from JDG

Time: 4 to 8 weeks. Cost: PLN 1,500 to 3,500.

Variant B: full transformation under KSH

The formal transformation procedure under Article 551 of KSH. More complex, requires a resolution, a transformation plan, an audit. Used mainly for large activities. Cost PLN 8,000 to 15,000, time 3 to 6 months.

Costs of Forming a Sp. z o.o.

Item	S24 online	Traditional notary
Court fee	PLN 250	PLN 500
Publication fee	PLN 100	PLN 100
Notary (agreement)	PLN 0	PLN 800 to 1,500
Minimum share capital	PLN 5,000	PLN 5,000
PCC on capital	PLN 25	PLN 25
Total fees	PLN 375 + 5,000 capital	PLN 1,425 to 2,125 + 5,000 capital

The PLN 5,000 share capital remains in the company account and you can use it for ongoing operations.

ZUS in a Sp. z o.o.

This is where a common myth lives. What matters is how many shareholders the company has:

• The sole shareholder of a single-member sp. z o.o. IS subject to ZUS like an entrepreneur (Art. 8(6)(4) of the Social Insurance System Act) - they pay full social and health contributions regardless of whether they draw remuneration. Not taking a salary does not change this.
• A shareholder in a multi-member company does not pay ZUS merely for holding shares (contributions arise only when they are employed by the company or hold a paid function).

So "no ZUS" is only realistic in a company with at least two shareholders. JDG pays full social ZUS plus health contribution (usually on the order of PLN 22,000-23,000 per year).

Profit Distribution from the Company: Three Ways

1. Dividend

• Resolution of the shareholders' meeting required (once a year)
• Owner's tax: 19% PIT on dividend
• Total burden: CIT 9% + PIT 19% = ~26%

2. Board member remuneration

• Remuneration resolution (can be monthly)
• Tax: PIT scale 12% or 32%, ZUS 9% (health, if above minimum)
• In the company: a tax-deductible cost

3. Loan from the company

• Tax-free, but must genuinely be repaid (otherwise KAS will treat the payout as income)
• Should carry market-rate interest, otherwise KAS will assess income
• A loan agreement between the company and its shareholder who is a board member requires the consent of the shareholders' meeting (Art. 15 of the Commercial Companies Code); the law sets no fixed "1/3 of capital" limit

Questions and Answers

Can I be the sole shareholder and president of a sp. z o.o.?

Yes. A sp. z o.o. may have one shareholder and one board member, who can be the same person. The formation procedure is the same as for multi-person companies, only that all shares and decisions are in one pair of hands. Keep in mind an important consequence, however: the sole shareholder of a single-member sp. z o.o. is subject to ZUS like an entrepreneur and pays full social and health contributions. If your goal is to avoid ZUS arising from the company, you need at least a second shareholder.

What about apartments already brought into JDG?

If the apartments are your private property (not a fixed asset of the JDG), you simply enter into new lease/tenancy agreements with the newly formed company. The company pays you rent (e.g. 70% of income), you receive the return as private rental on ryczalt (8.5%). This hybrid solution offers tax optimisation.

How much does monthly accounting for a sp. z o.o. cost?

For an STR company with 1 to 5 apartments, no VAT, this is PLN 400 to 800 per month. Full accounting includes: ledger, JPK_VAT (if VAT), CIT-8, financial statements. With active VAT, VAT-7 is added and the cost rises to PLN 600 to 1,200.

Can JDG and a sp. z o.o. be combined?

Yes. Many STR hosts run JDG (e.g. for individual apartments settled on ryczalt) and a sp. z o.o. (for larger scale) in parallel. This requires two sets of accounting and careful separation of turnovers, but is legal and sometimes tax-optimal.

What if I change my mind and want to go back to JDG?

The company can be liquidated (liquidation proceedings of 6 months) or sold. A return to JDG is possible, but requires transferring assets out of the company, which is taxed at CIT 9% as an asset distribution. A decision to form a company should therefore be long-term.

Can a sp. z o.o. settle private rental on ryczalt?

No. A sp. z o.o. always settles income on CIT rules (classic or estoński). Private rental on ryczalt is available only to private individuals not running a business. If you transfer the rental to a company, you accept CIT.

To help you make the right decision on legal form and to carry out the transition to a sp. z o.o., use the Standard Package HostReady. You will receive a JDG vs company comparison calculator, apartment transfer agreement templates, CWTON update instructions and support during the transition to the new form.

Don't want to search for templates and regulations on your own? The HostReady Package includes complete documentation, ready-to-use templates, and checklists - everything you need for CWTON registration and legal short-term rental, ready to use right after purchase.