Doing Business in Poland: Business Operations
Running a business in Poland means taking advantage of a well-developed innovative infrastructure and a wide spectrum of profitable industries, including the manufacturing and IT sectors. Entrepreneurs leverage the country’s strategic geographical location, fostering the development of logistics and transportation. The business culture in Poland, based on formal relationships and punctuality, facilitates effective collaboration. Additionally, the favorable business climate, supported by government and regional initiatives, makes Poland an attractive location for companies planning expansion.
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Why Do Business in Poland?
Doing business in Poland is advantageous because, according to data provided by the Polish Investment and Trade Agency, the Polish economy is developing at a stable pace and is the sixth largest economy in the European Union. Higher than Poland on the list are the economies of Germany, France, Great Britain, Italy and Spain, famous for expensive workforce and huge competition. Running a business in Poland and knowing two basic languages, English and Ukrainian, you are able to establish business relationships with contractors basically on any side of the country’s borders.
Additionally, according to GDP forecasts in Poland, in 2023 this indicator will increase by 0.7%, and in the next two years the development will accelerate, reaching 2.2% in 2024 and being the second highest in the European Union. Acting on such forecasts is a good time to start a company in Poland.
How to start a business in Poland?
Setting up a business in Poland is done online using the electronic application creator. You should enter the data asked by the wizard, and the system will prepare an application for entry into the register of entrepreneurs and appropriate notifications to offices. Before completing the application for Polish company formation, you must select the name and address of your business, determine one or more PKD codes, and select the taxation and accounting form. After determining all these issues, proceed to setting up a company online at biznes.gov.pl.
By starting a business that generates an income of a maximum of 75% of the minimum wage, which is 2,700 Polish Złoty per month, you are able to run an unregistered business in Poland. Once this threshold is exceeded, setting up a company is mandatory.
Already at the stage of establishing a company, it is possible to take advantage of the offer of business incubators.
Are there business incubators in Poland?
Yes, there are many business incubators in Poland. These are institutions and associations that help young companies and students. Incubators support the activities of new entrepreneurs in the legal, accounting and premises areas.
Business incubators guide you through the process of completing all formalities from the very beginning. It is possible to connect your business to an incubator, which in practice exempts you from the obligation to register your company.
Using the support of incubators is paid, but the cost is approximately several hundred zlotys per month, which allows you to save time and resources that would be necessary to acquire this knowledge on your own.
There are many business incubators in Poland. The most famous are those operating at major universities, called Academic Business Incubators. Most incubators operate in large cities, for example SpeedUp IQbator in Poznań or Technoboard in Warsaw.
Using incubators is particularly profitable in certain industries operating mostly online, for example for IT specialists, graphic designers or tutors.
Are Incubators suitable for all business industries in Poland?
Business incubators are not suitable for all industries in Poland. Not every industry will benefit from using a business incubator, and in some industries it proves to be an obstacle. Such activities include, for example, companies that require a number of permits to conduct business, such as alcohol or drug licenses.
The shipping, catering, medical and insurance industries are excluded from support for business incubators in Poland, because running these activities would involve high risk.
Some businesses cannot count on support from incubators at all, because the most important criterion is opening their first business. Someone who has ever run and closed a company, even many years ago, is no longer able to use incubators to open another one.
What are the most profitable industries for business in Poland?
The most profitable industries in Poland include:
- Field of transportation and logistics.
- Field of renewable energy and electromobility.
- Software and other services within the IT industry.
- Education and training services.
Field of transportation and logistics is a growing and profitable industry, as shown by recent Central Statistical Office research. In the first quarter of 2023, an improvement in the net turnover profitability index was recorded in transport and warehousing from 4.6% to 5.8%.
The Fields of renewable energy and electromobility are booming, and therefore, the opportunities in these industries are constantly growing. It is estimated that by 2050, earnings from renewable energy sources will increase up to five times.
Software and other services within the IT industry evolve with the development of technology. According to the ranking, the best paid professions, the IT security specialist is in second place, and the programmer is in seventh place. According to the 2023 Salary Report, the average earnings of IT specialists are PLN 11,427.
Education and training services are becoming more and more popular with the development of new technologies. Additionally, there is a belief that knowledge guarantees success. The offer of educational companies, such as the Association of Accountants in Poland, shows the increasing popularity of one-day training over full-length training. Organizing such a course for several dozen people for several hundred zlotys per participant generates a lot of earnings for a limited amount of work compared to organizing a course lasting several weeks, during which you also have to take care of snacks during breaks and organize the final exam in accordance with the law.
Why is knowing Polish business culture important to succeed in different industries?
Knowing Polish business culture is important to be successful in different industries, because only by knowing the environment, the new entrepreneur is able to network naturally and cooperate effectively. Each industry in Poland is governed by different rules, hence, it is very important to attend industry events and get to know the business culture. For example, the IT industry in Poland cultivates an informal dress code and addresses each other by first name, while manufacturing and medical industries are very formal and strict.
What is the business culture in Poland?
Business culture in Poland is a set of practices, values and customs shared by the majority of entrepreneurs and perceived as natural and courteous. It is characterized by being professional, polite, and formal, which also apply to the business dress code in Poland. The most important elements of the business culture in Poland are conducting thoroughly prepared business meetings, addressing business partners using titles and surnames, and maintaining clear and direct communication. The major values in Polish business culture are commitment, trust, respect and punctuality. Respecting these values plays a crucial role in Polish business etiquette present during both networking and daily cooperations.
What business opportunities are in Poland?
Business opportunities in Poland are huge, especially in the IT and technology, manufacturing, green energy and logistics sectors. The Polish Agency for Development and Entrepreneurship offers programs supporting innovation, you will receive funding for research or the implementation of new technologies if you have promising business ideas. Another way of support is the My StartUp program, which supports startups and companies from the new technology sector, including IT, renewable energy and logistics. Under this program, you will receive mentoring support, grants for product development and business consultations.
What are the essential business operations in Poland?
Essential business operations in Poland are:
- Human resources management.
- Compliance with the law.
- Ensuring the health and safety of employees and customers.
- Controlling the quality of goods and services
Human resources management is an essential operation when developing a business. Many entrepreneurs initially operate on their own, but as the company develops, they decide to start the hiring process in order to delegate some of their responsibilities to others. Keeping employee records is an integral part of the hiring process. Records of working time, leaves and payroll are just some of the applicable documents. In order to properly maintain this documentation, it is worth considering hiring someone responsible for employee affairs or hiring an external accounting office.
Compliance with the law is one of the most important operations that affects most departments in a newly opened company. Taxes and their proper settlement are not a trivial matter, especially if both PIT and VAT on goods and services are involved. You need to be up to date with labor law, because it is changing dynamically. In the last few years labor law in Poland changed the rules of calculating remuneration, and the amount of leave payment.
Ensuring the health and safety of employees and customers is required by Polish law and is an essential step in running a business. Each employee must regularly undergo occupational health and safety examinations and be provided with protective clothing. In addition, companies must have developed procedures in the event of unexpected events, such as fire or evacuation of people on the premises. Less obvious ways of taking care of employees’ health include, for example, the obligation to subsidize corrective glasses for employees in positions requiring computer use.
Controlling the quality of goods and services is not only an activity that helps to ensure a good image of the company and the return of customers satisfied with the cooperation. In many industries, regular certification is required by law or imposed by contractors.
Responsibilities related to business operations significantly impact the business climate in Poland and are discouraging for some.
What is the climate for doing business in Poland?
The business climate in Poland is favorable because the country has a stable economy, a competitive market and a qualified workforce. There are also challenges such as bureaucratic procedures and high taxes. According to the World Bank, Poland took 40th place out of 190 economies in the ease of doing business ranking in 2020. Some of the areas where Poland performed well include access to electricity, protection of minority investors and foreign trade. Some of the areas where Poland performed poorly were starting a business, obtaining building permits and enforcing contracts.
For all these reasons, before deciding to open your own business, it is worth considering the advantages and disadvantages of this idea.
What are the advantages of doing business in Poland?
The advantages of doing business in Poland are a stable political situation in the country, low entry costs when starting a business, and electronic access to many services.
A stable political situation in the country is one of the main advantages of doing business in Poland, e.g. thanks to the alliance with NATO and joining the European Union. The lack of riots or conflicts within the country means that the risk of political conflicts is not high compared to other countries where the political system is not so stable.
Low costs when starting a business are a huge benefit for someone who does not have much of a financial cushion. In the first months of opening a business, investments are quite large and taking advantage of state support or at least reduced costs, such as cheaper ZUS in the first two years, is a huge help.
Electronic access to many services is a huge advantage in many respects. One of them is the ability to handle most matters while away from the company or even in another country. Some of the matters that are dealt with online include setting up a business, settling taxes and ZUS contributions, and reporting changes in the persons representing the company.
What are the disadvantages of doing business in Poland?
The disadvantages of running a business in Poland are business competition, high costs of maintaining the business, bureaucracy and compliance with current regulations.
Business competition in Poland is quite high, regardless of the industry. More and more people decide to run a business, so even niche businesses often face competition from other newly opened businesses, and standing out from the rest is a challenge. In the first months, it is difficult to acquire customers who, in saturated markets, have to be taken away from the competition. In other, less developed countries, there is less competition and it is easier to interest customers in your services.
High costs of maintaining operations apply especially to larger and longer-operating companies. Young entrepreneurs count on a two-year reduction in ZUS contributions and even business subsidies. Similarly, lower taxes and exemptions usually apply to businesses with relatively low income. Someone earning more must take into account much higher costs of running a business, as well as additional taxes on their own income, e.g. the solidarity levy for income above one million per year.
Bureaucracy and compliance with current regulations are what particularly worries someone who does not have much knowledge or interest in taxes and documents. There have been many tax changes in recent years (2017-2023), such as those introduced by the Polish Order, for example a change of CIT rates for small companies, hence tracking and complying with them is a challenge.