Poland is the largest economy in Central and Eastern Europe and the 6th largest in the entire European Union. Situated in the heart of the old continent, however, its economic potential is underestimated and the country as a whole is sometimes seen only through the prism of the neighbouring, highly developed Germany. But Polish market is increasingly opening up to foreign investors – tax breaks, clear legal regulations and low employment costs prove to be useful, therefore it is an attractive country for foreign entities planning to internationalise and run their own business in Poland.
Statistics – investments, FDI on the Polish market!
38.5 million inhabitants in Poland at the end of 2019, with a GDP of EUR 477.97 million, a 4% increase compared to 2018. Trade volume in 2019 amounted to exports of EUR 235. 8 billion and imports of EUR 234 billion. In 2018, Poland attracted mainly investors from the Netherlands (21. 33%), Germany (17. 43%), Luxembourg (11. 92%) and France (9. 06%). The value of foreign direct investment liabilities in Poland at the end of 2018 amounted to EUR 199. 7 billion. In 2018, with 272 investments, Poland was the 6th most attractive country in Europe in terms of investment attractiveness. By comparison, Hungary with 101 FDI came 15th and the Czech Republic with 65th and 20th place. The sectors which enjoyed the greatest interest in Poland were the production of automotive parts, transport, logistics, manufacturing or chemical industry. Whereas in the business services sector 13% of all FDI in Poland was created.
Large internal market, over 38 million potential consumers in Poland with easy access to the European Union market. Polish citizens are spreading the culture of consumerism and spending more and more, not only on essential products. Relatively low labour costs in comparison mainly with the western part of Europe are a key factor determining the attractiveness of Poland as a potential market for running its own business. Besides, it is located in the central part of the continent, with a developed transport and logistics sector, and is a convenient location for the distribution of products to other markets eg. in Eastern Europe or a convenient place for suppliers. There are numerous institutions in Poland, which deal with, among others support for foreign entities in entering the Polish market. These include, for example; for entrepreneurs from Germany – Polsko-Niemiecka Izba Przemysłowo-Handlowa, and for those in the UK, the British Polish Chamber of Commerce. Investors can also count on EU support. Poland is the largest recipient of EU structural and cohesion funds, with EUR 82.5 billion budgeted during 2014-2020.
How to start?
It is necessary to choose a company type. Investors start by choosing between different business forms based on the size of the future business and perhaps the available capital. Then it is necessary to select the business name and choose the business activity codes. In Poland, investors choose the PKD codes or the NACE codes for the future business. It indicates the company’s main activity. Then it is needed to prepare the Articles of Association that include information such as the business type and scope, the registered office, share capital etc. Then it is time for registration. The new company is registered with the National Court Register and afterwards with the Social Security Institution as well as with the Tax Office and for VAT purposes. Each company obtain a special REGON and NIP identification number as well as register for VAT, depending on the business activities it performs. Apply for VAT and social insurance registration: these are two of the main steps that need to be handled once the business is registered; the company is automatically reported after registration to the Social Insurance Institution. Of course, you can find numerous guides on the Internet, whether to follow the guidelines from government portals or hire a lawyer to help you with all the formalities.
Poland’s attractiveness for foreign investors who plan to internationalise include low employment costs, location, helpful institutions and a large sales market. When entering the Polish market, it is good to get acquainted with its realities and understand the mechanisms of functioning in specific industries and all legal requirements. Starting a business in Poland is a chance for your success!