Doing Business in Poland: 19+ Pros and Cons (You Must Know)

Poland is a nation of unique culture, history, and geography and, thanks to recent economic reforms, is rapidly attracting international business from around the world. For the economic growth and development of the country, the last decade has been quite good. A member of NATO in 1999 and of the European Union in May 2004 opened up the Polish market to foreign investors and opportunities for development.

Poland receives one of the largest pools of EU development and infrastructure funding which makes it extremely attractive to foreign investors. Its place in the heart of Europe where Western and Eastern ideas converge provides an ideal business growth opportunity.

Benefits of Doing Business in PolandThe Drawbacks of Doing Business in Poland
Good locationGetting a loan is difficult.
Skilled labor forceInvestors Protection
Supportive NatureTrading across Borders is difficult
Large Market ShareCultural shifts

Advantages of Doing Business in Poland

  • Favorable Location for Business

Poland’s strategic geographic position has played a major role in its growth. Located at the crossroads between Eastern and Western Europe, Poland is a West-Eastern link and offers Central Europe’s large market for trade and transportation.

Border sharing with Germany, the Czech Republic, Slovakia, Lithuania, Belarus, Ukraine, and Russia offer large opportunities for trade. Poland’s ports and more than 400 km of coastline are also improving its trade opportunities. Poland is also benefiting from a free exchange of goods and services as an EU Member State.

  • A Developing Economy

After its liberalization in 1990, Poland has stood out as a success story among transition economies and today it has one of the most efficient and dynamic-growing economies in Central Europe. Its transformation into a market-oriented, a democratic state has boosted Poland’s international profile.

The European Union, which was supportive in funding growth, also recognized Polish potential and this in turn attracted foreign investment. The future of Poland looks very good because of the influx of foreign capital into its economy.

  • Government is Supportive Along with Tax Benefits

The Polish government welcomes foreign investment and has implemented economic changes to reduce taxes. Government rewards depend on the investment costs and job growth, as well as on the results of agreements with authorities. They consist of three forms of State aid: federal, horizontal, and sectoral. Incentives provide different forms of grants as well, which can be paired with tax deductions which loans.

In Poland, foreign investors gain access not only to the Polish market but also to the large EU market. Investors doing business in Poland are able to take advantage of lower production costs as a new member compared with those that are known longer. Poland has a large professional population, and its legal structure is progressing towards complete harmonization with Western norms.

  • Good Inter-personal Relationships

Poland has a family-focused culture and strong personal relationships of Polish importance. Because of the history of occupation of Poland, it is usually the case that outsiders have to win the confidence of their Polish acquaintances before forms of close relations.

For this purpose, Polish people prefer to embark on a fairly systematic approach and it may take several meetings before making any final decisions.

  • Luring Investment Sector

Poland is popular European investment destinations and businesses find there are many business opportunities to explore here. Food processing, automotive and aerospace, electronics, and business services can be listed amongst the top sectors. Also, Poland is an increasingly top location for Northern and Western European IT companies.

The outsourcing sector also reported steady growth in Poland. The business services industry is one of the country’s largest employers and businesses in this field are primarily located in major metropolitan areas. Indeed, several investors starting a business in Poland chose to be incorporated in Warsaw, Wroclaw, or Krakow.

  • Good Infrastructure

Poland’s infrastructure is weak, but this is improving following improvements to and legacy of the EURO 2012 tournament. And, as you would imagine, in most markets there’s a lot of domestic and overseas rivalry due to their high potential growth and returns. Like in every other business, obtaining a competitive edge really comes down to properly doing your homework.

Quiz those with expertise doing business there – be it ex-pats or the Polish diaspora – and walk in with your eyes wide open to the labels and social skills needed, and the opportunities and advantages, risks, and pitfalls that Poland offers.

Disadvantages of Doing Business in Poland

  • Commencement of business

Starting a company can be a long process, and the different procedures will probably take over a month to complete.

  • Electricity Constraints

It can also be a costly undertaking when setting up an external link, especially with regard to the electrical contractor costs.

  • High Employee Termination

The Polish Labor Code specifies that an employment contract should be drawn up in writing and must include details on the type of contract, date of completion, conditions of employment and remuneration, duration of the job, place of work, working period, and date of commencement. Employers still have the option of negotiating collective bargaining arrangements.

Terminated employees usually have the right to severance pay. The amount ranges from the pay for one month to the pay for three months, depending on how long the employee has been working for the employer. This applies to businesses that employ at least 20 people.

  • Work Permits are Necessary

The Law on the Promotion of Jobs and Labor Market Institutions states that after obtaining permission from a voivode (a local governor) an Employers can recruit foreign workers. People from the EU or EEA countries are allowed to work in Poland without a work permit, but non-EU people need a work permit as well as the required visa.

  • Cultural Differences

The Polish struggle for freedom and autonomy has produced a community uniquely attached to its traditions and heritage. Companies looking to grow in Poland should be culturally conscious, as they can appreciate the sense of pride and the customs and practices regulating the business climate.

  • Insolvency

Contract compliance will take an average of 685 days, and requires 33 completion procedures. Insolvency resolution is a relatively lengthy process, taking three years compared to an average of 1.7 years in the OECD.

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