Poland is a perfect destination for business expansion and investment. On the one hand the country is renowned for its economic development in recent years, many times highly ranked in terms of various conditions of doing business. On the other hand Poland is a tourism destination highly appreciated by foreign visitors being praiseworthy for its inhabitants hospitality, cuisine, cultural heritage and natural landscapes.
EU market reach
Because Poland is a member state of the European Union any company now based in Poland can reach the EU’s 500 million consumers. That is why many companies of non-European origin choose Poland as their headquarters for all operations in Europe.
Business opportunities in Poland
There are several reasons for Poland’s popularity as a target destination for foreign investments:
- excellent location,
- availability of a highly-qualified workforce (accounting and finance, IT or R&D),
- cheaper labor and operational costs,
- low corporate tax and convenient no-corporate tax entities,
- market and country size,
- well developed infrastructure,
- favorable economic, political and social environment,
- grants and incentives available for investors,
- special economic zones,
- many key global companies already attracted by Poland,
Poland is centrally located in the heart of Europe at the crossroads of several major transit routes. The country has access to the Baltic Sea as a natural link to Scandinavian countries and at the same time it has a long border with the biggest EU economy – Germany. Poland has also access to Southern and Eastern Europe as it borders with Ukraine, Belarus, Russia to the East and Slovakia and Czech Republic to the South.
There are 470 higher education institutions offering almost 200 fields of study in Poland. Those schools employ over 100 000 academic teachers. Currently there are 2 million people studying in Poland which constitutes one of the highest GER (Gross Enrollment Ratio) in the world. Recently Poland has started to become famous for the qualifications of its software engineers. They are the reason why Google opened its R&D facility in Cracow employing 100 coders.
The living costs in Poland are much lower than in Western Europe as are the salaries. The average wage in Poland is 3 times lower than in the USA, Ireland or Luxembourg. Other operating costs are a small fraction of those encountered in western countries. According to Knight Frank’s Global CBD office rents Q4 2011 the average rental cost of office space per square meter per year in Warsaw is 307 EUR whereas in Hong Kong 1 247 EUR, in London (West End) 1 188 EUR and in Moscow 926 EUR. Of course office space in Poland can be found even more cheaply.
Current corporate tax rate is 19%. There are some business forms with limited liability that are not subject to corporate income tax (for more information check Company Formation service).
Poland total area accounts for 312 679 km2 which makes it bigger than UK (242 900) and more less the same size as Italy (301,336 km). The country’s population is 38,5 million which is more than Canada (35 million) and twice as much as Australia (22,9 million). That makes Poland ranked as 6th largest market in EU and 33rd in the world.
All the major cities have their own airports (16). There are three main sea freight ports (Gdańsk, Gdynia and Świnoujście). Recently a direct freight train connection has been opened between Chengdu (China) and Łódź (Poland) that takes 14 days which is a great alternative to sea freight (that takes minimum 45 days). Although the poor road network is the major problem the condition of roads is improving constantly and there are new highways and express ways completed every year.
Poland has been a member state of the European Union since 2004. It is also a member of WTO and OECD which in itself is a confirmation of a strong international position. Poland is a NATO member assuring security and sovereignty. The country is free of terrorism as its population is culturally and ethnically homogenous (national minorities around 4%, the majority of inhabitants are Roman Catholic).
Poland is enjoying undisturbed economic stability. When the last crisis hit all the EU countries, Poland was described as „the green island on the red map” as it was the only EU member state that had no recession. Furthermore Polish banking sector was not affected at all by the global crisis. Polish growth is additionally supported by EU structural funds that are going to account for 106 billion EUR for the years 2013-2020. The government itself is boosting the domestic demand by infrastructural investments (25 billion EUR is to be invested in the energy sector, including nuclear).
Foreign investors considering business in Poland might benefit from many incentives that are subject to both Polish and EU state aid laws. There are incentives for both the establishment and operational phases of an investment.
Currently in Poland there are 14 Special Economic Zones (SEZs). There are some limitations when applying for an investment permission in SEZs. For example there is a minimum investment of 100 000 EUR and the project must be within an approved sector of operation. However the benefits might be high: up to 50% exemption on corporation tax or property tax.
According to the latest National Bank of Poland’s report total country’s FDI liabilities amounted to 153 billion EUR at the end of 2011. After collapse of communism in Poland in 1989 the inflow of international investors started. Through the years major global companies have established their presence in Poland in one way or another: AIG, Citygroup, Crédit Agricole, Societe Generale, ING, Danone, Dell, GE, Motorola, Sharp, Toshiba, Thomson and many others. Furthermore very recently many IT companies have started to appreciate the high qualifications of Polish software engineers.
Poland Zalewski Consulting assists foreign companies and businessmen with the many issues and caveats concerning their investments in Poland. For more information please check „Our services” section of our website.
If you are interested in investing in Poland please feel free to contact us with your query. We will be more than happy to help introduce your company to the Polish market or support you with any other issues that might arise when doing business in Poland.