[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"advice-en-b2b-contract-with-foreign-company":3},{"slug":4,"title":5,"excerpt":6,"body":7,"datePublished":8,"dateModified":8},"b2b-contract-with-foreign-company","B2B contract with a foreign client — 6 points before signing","Governing law, court, currency, payment security, VAT and withholding tax — what to watch when signing a B2B contract with a company from another country.","\u003Cp>A B2B contract with a company from another country differs from a domestic one mainly because it is necessary to agree in advance which law governs it, before which court a dispute will be resolved and in which currency payment will flow. On top of that come Polish tax obligations: the place of supply for VAT, the invoice annotation and currency conversion. Below we discuss what to check before signing so that the contract with a foreign client does not turn into a costly problem.\u003C\u002Fp>\n\n\u003Ch2>First the counterparty: who the company on the other side is\u003C\u002Fh2>\n\u003Cp>With a foreign client, it is harder to assess credibility intuitively. Before an entrepreneur sends a signed offer, it is worth collecting a few hard facts:\u003C\u002Fp>\n\u003Cul>\n\u003Cli>\u003Cstrong>entry in the commercial register\u003C\u002Fstrong> of the country of the seat — full name, registration number, address and date of formation of the company,\u003C\u002Fli>\n\u003Cli>\u003Cstrong>persons authorised to sign\u003C\u002Fstrong> — in many countries the register shows members of the management board or directors; a signature of a project manager without a power of attorney may not bind the company,\u003C\u002Fli>\n\u003Cli>\u003Cstrong>VAT number\u003C\u002Fstrong> of an EU client — its validity is confirmed in the EU VIES search engine, and the result is worth saving as evidence for the purposes of settlement,\u003C\u002Fli>\n\u003Cli>\u003Cstrong>warning signs\u003C\u002Fstrong> — insolvency proceedings, a freshly founded company without a track record, an address in a virtual office with no contact details.\u003C\u002Fli>\n\u003C\u002Ful>\n\u003Cp>Data from the register must be copied into the preamble of the contract exactly, including the legal form. An error in the name or number later makes it harder to issue invoices and pursue claims.\u003C\u002Fp>\n\n\u003Ch2>Governing law and court: the two clauses that weigh most\u003C\u002Fh2>\n\u003Cp>In relations with EU companies, the parties may in principle choose themselves the law that governs the contract. If they do not, the applicable law is determined by EU conflict-of-law rules, and their outcome is not always obvious to either side. That is why the absence of a governing law clause is one of the costliest oversights.\u003C\u002Fp>\n\u003Cp>A separate matter is the choice of court. A Polish-law clause does not automatically mean that the case will be heard by a court in Poland — this must be written down separately. A simple hierarchy helps in negotiations:\u003C\u002Fp>\n\u003Col>\n\u003Cli>Polish law and a court in Poland — most favourable for a Polish contractor,\u003C\u002Fli>\n\u003Cli>foreign law, but an arbitration tribunal conducted remotely or in a neutral place,\u003C\u002Fli>\n\u003Cli>the law and court of the client's country — then, before signing, it is worth having the contract reviewed by a lawyer from that country and estimating the costs of any possible proceedings.\u003C\u002Fli>\n\u003C\u002Fol>\n\u003Cp>With clients from outside the EU, there is the additional question of whether a judgment given in Poland can be enforced at all in the debtor's country. If there is no appropriate international agreement, arbitration or stronger payment security may be safer.\u003C\u002Fp>\n\n\u003Ch2>Language version, signature and form\u003C\u002Fh2>\n\u003Cp>Contracts with foreign counterparties are usually bilingual or entirely in English. The text must then include a sentence stating which version prevails in case of discrepancies. It is also worth providing a glossary of terms — expressions translated from a foreign legal system (for example on liability or compensation) do not always have a Polish equivalent of the same scope.\u003C\u002Fp>\n\u003Cp>An electronic signature is in practice the standard. A qualified electronic signature works across the EU, while a simple signature in an app is rather a documentary form. Before signing it is worth agreeing which type of signature both parties regard as binding.\u003C\u002Fp>\n\n\u003Ch2>Money: currency, payment deadline and securities\u003C\u002Fh2>\n\u003Cp>The contract should clearly specify the currency, the net amount, the payment deadline counted from the delivery of the invoice and who covers the fees of intermediary banks. Without this, payment may arrive reduced by fees that no one anticipated.\u003C\u002Fp>\n\u003Cp>With a new client from a distant country, it is worth considering one of the following safeguards:\u003C\u002Fp>\n\u003Cul>\n\u003Cli>an advance payment or payment for the first stage up front,\u003C\u002Fli>\n\u003Cli>settlements in shorter periods (two-weekly instead of quarterly),\u003C\u002Fli>\n\u003Cli>the right to suspend work when the payment deadline is exceeded by a set number of days,\u003C\u002Fli>\n\u003Cli>a bank guarantee or a letter of credit for larger deliveries of goods.\u003C\u002Fli>\n\u003C\u002Ful>\n\u003Cp>A case from practice: an industrial automation specialist accepts an order from a company in Norway for a three-month project for EUR 30,000. Instead of one invoice at the end, three monthly payments are agreed and the right to suspend work after 14 days' delay. If the client stops paying, the risk is limited to one instalment, not the whole project.\u003C\u002Fp>\n\n\u003Ch2>VAT and the invoice for services to a foreign company\u003C\u002Fh2>\n\u003Cp>For services provided to a business, the place of supply is as a rule the country in which the recipient has its place of business (\u003Ca href=\"https:\u002F\u002Fapi.sejm.gov.pl\u002Feli\u002Facts\u002FDU\u002F2026\u002F1263\u002Ftext.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">art. 28b of the VAT Act\u003C\u002Fa>). The Polish contractor then does not add Polish VAT, and the tax is settled by the client in their country. The invoice must, however, include the words \"reverse charge\". The Act provides exceptions to this rule, including for services related to real estate and passenger transport, so the type of service must be checked before the first invoice is issued.\u003C\u002Fp>\n\u003Cp>When the client has its seat in the EU, an active VAT payer also needs registration as a VAT UE payer and submits a VAT-UE recapitulative statement. Details are in the article \u003Ca href=\"\u002Fen\u002Fadvice\u002Fvat-ue-registration\">on VAT UE registration\u003C\u002Fa>.\u003C\u002Fp>\n\u003Cp>Amounts in a foreign currency are converted for VAT at the average NBP rate from the last business day preceding the moment the tax obligation arises (art. 31a of the VAT Act). Income tax has its own rules, and the difference between the invoice rate and the payment-day rate gives an exchange-rate difference.\u003C\u002Fp>\n\n\u003Ch2>Withholding tax and residence\u003C\u002Fh2>\n\u003Cp>Some countries withhold tax on payments made to foreign contractors, especially on royalties and some intangible services. A double tax treaty often allows this to be reduced or eliminated, but the client usually then requires a certificate of Polish tax residence. It is worth agreeing in the contract whether the amount is \"net of tax\" or \"gross before withholding\" — the difference can reach a dozen or so percent of the fee.\u003C\u002Fp>\n\n\u003Ch2>Pre-signing checklist\u003C\u002Fh2>\n\u003Cul>\n\u003Cli>The counterparty's data matches the register and the person signing is authorised.\u003C\u002Fli>\n\u003Cli>The contract indicates the governing law and — separately — the court or arbitration.\u003C\u002Fli>\n\u003Cli>The prevailing language version is set.\u003C\u002Fli>\n\u003Cli>The currency, payment deadline, transfer costs and security are stated explicitly.\u003C\u002Fli>\n\u003Cli>The place of supply for VAT and the invoice content have been checked.\u003C\u002Fli>\n\u003Cli>The issue of withholding tax and residence documents has been clarified.\u003C\u002Fli>\n\u003C\u002Ful>\n\u003Cp>Clauses typical of every contract — scope of work, copyright or contractual penalties — are discussed in a separate text on \u003Ca href=\"\u002Fen\u002Fadvice\u002Fb2b-contract-essentials\">what to check in a B2B contract\u003C\u002Fa>.\u003C\u002Fp>\n\n\u003Ch2>How Good Balance can help\u003C\u002Fh2>\n\u003Cp>We prepare and review contracts with foreign counterparties as part of our \u003Ca href=\"\u002Fen\u002Fservices\u002Flegal\u002Fagreement-drafting\">contract drafting\u003C\u002Fa> service, in a Polish or bilingual version. After the contract is signed, we take care of settling currency invoices, VAT UE and exchange-rate differences as part of our \u003Ca href=\"\u002Fen\u002Fservices\u002Faccounting\u002Ffull-accounting\">accounting services\u003C\u002Fa>.\u003C\u002Fp>","2026-10-09"]