Due to the acceleration of the globalisation of the economy, investors are increasingly choosing to invest capital and to build business on different markets, without limiting themselves to the borders of their home country. Foreign investors often decide to contribute to Polish commercial law companies, in which case the question arises whether the contribution can be made in a currency other than the Polish zloty.
Regulations of share capital according to Polish law
The share capital of a limited liability company should be at least 5,000 PLN, and the nominal value of the share must not be lower than 50 PLN. The amount of share capital and the nominal value of the shares covered by the individual shareholders must be specified in the articles of association.
In the case of a limited liability company, there is no obligation to make write-offs for reserves to create loss provision. Shares may not be included below their nominal value. Where the share is held at a price higher than the nominal value, the surplus shall be transferred to the reserve.
If there is no agio in the company, or no aid for shares was imposed, the company may not have any spare capital at all.
Fixed share capital
The share, as well as share capital, must be expressed in an appropriate monetary amount, in Polish currency, as share capital, as a figure, should have a fixed amount in order to be able to account for a certain figure in the balance sheet liabilities of the company.
It is unacceptable to determine the amount of share capital in foreign currency as an equivalent in PLN of the amount expressed in foreign currency, e.g. at the average rate announced by the NBP, as the variable exchange rate would violate the obligation to determine the share capital in a fixed amount.
The change in the exchange rate would violate the requirement to define the share capital in a fixed amount, only the Polish currency ensures the principle of stability.
Application Article 30 accounting paragraph
Therefore, the shareholder's contribution to the company must be expressed in Polish currency. However, it is possible to implement the obligation to contribute to a foreign currency and to convert the amount into Polish currency in accordance with the disposition from Article 30(2)(2) Accounting Act (‘UoR’).
This provision states that the economic operations expressed in foreign currency shall be recorded in the accounts at the date of their execution, unless the separate provisions on the appropriations from the budget of the European Union and other European Economic Area and the non-refundable appropriations from foreign sources provide otherwise, respectively, at the rate: the actual rate applied on that date, resulting from the nature of the operation, in the case of the sale or purchase of the currencies and the payment of the claims or liabilities or the average announced for the currency by the National Bank of Poland on the day preceding that date, in the case of payment of the debts or liabilities, unless it is reasonable to apply the rate referred to in point 1, and for other operations.
In conclusion, in the event of a need to determine the amount of share capital to be covered by a contribution in foreign currency, the average rate announced for that currency by the National Bank of Poland from the day preceding the adoption of the resolution of the share capital increase should be used.
The resolution on the capital increase may contain an amount in PLN and provide that its payment will take place in foreign currency. In such a situation, there may be a difference between the value of the enacted contributions and the value of the contributions paid. In principle Article 154(3) k.s.h. shares in companies with o.o.
may not be included below their nominal value and the need to supplement the funds will therefore be updated in the event of underpayment. It is worth pointing out that the Commercial Companies Code does not provide for a specific procedure in the event of overpayment.
The decision to contribute to share capital in foreign currency carries a risk of exchange rate differences. In the event of a negative exchange rate difference due to the foreign currency contribution, the solution is to supplement the missing amount of the contribution by the shareholder.