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

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

Above PLN 1 million in annual income and 3 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 10% beats ryczalt 12.5%, but only if the owner reinvests. 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 0% on reinvestment, 10% on dividend payout
• Full deductibility of costs: depreciation of the apartment, car, phones, cleaning, legal services costs
• No owner's social security (ZUS), if you do not draw remuneration from the company
• 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
Tax rate	8.5%/12.5%	9%	0% reinv, 10% payout
Tax	PLN 71,000	PLN 37,800	0 or PLN 42,000
Owner's ZUS	~PLN 16,000	PLN 0	PLN 0
Annual accounting	PLN 2,400	PLN 9,600	PLN 9,600
Total burden	PLN 89,400	PLN 47,400	PLN 9,600 (reinv)
Owner's net profit	PLN 510,600	PLN 552,600	PLN 590,400

Difference: JDG vs sp. z o.o. CIT is PLN 42,000 per year in favour of the company. Sp. z o.o. estoński CIT on reinvestment is an additional PLN 37,800 per year.

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.

The owner of a sp. z o.o. does NOT pay ZUS, if:

• Does not draw remuneration from the company
• Is not employed under an employment contract in the company
• Does not perform a function for pay (e.g. board member based on a resolution)

This is one of the biggest benefits. JDG pays full ZUS (~PLN 16,000 per year), the company PLN 0 if the owner lives off dividends.

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 be repaid
• Interest: NBP rate + 2 pp, otherwise KAS will assess income
• Maximum amount: 1/3 of share capital (15% without shareholder consent)

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. This is the standard solution for small companies. The formation procedure is the same as for multi-person companies, only that all shares and decisions are in one pair of hands.

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.