If you’re thinking about doing business overseas, Central Europe is undoubtedly an area worth exploring. Here, we talk you through the advantages and disadvantages of doing business in Poland.

Business Culture in Poland

The Polish business environment often has strict hierarchical structures in place, and negotiations can be conducted slowly and formally at times. However, this is more likely to apply to organisations with an older demographic.

On the whole, the Polish are straight talking, and can come across as brusque to those who are culturally more indirect. Often the focus is on realistic, practical outcomes rather than motivational rhetoric.

Benefits of Doing Business in Poland

There are undoubtedly many reasons to explore expanding operations to Poland. Here we will look at some of the most compelling.

Central location

Poland is only a two-hour plane ride away from the UK, making travel costs manageable. It’s conveniently located in Central Europe which allows for ample business opportunities, particularly in terms of trade with Central and Eastern European countries. It also gives the added option of exploring possible Far East routes. For example, China is the second largest exporter of goods to the Polish market after Germany.

In recent years Poland has seen real improvements in its infrastructure with the construction of new motorways. Faster intercity trains have led to better logistics in much of the country. The construction of the North Sea-Baltic Corridor, has also helped to strengthen links between Central, Eastern and Western European countries.

Educated population

The population in Poland is an educated one. Nationwide education reforms, put in place in the 1990s, are now showing benefits, including a significant rise in the number of Polish people attending university in the past decade. Poland’s Pomerainian Voivodeship is an appealing investment location with more than 20 local universities. Poland is an attractive prospect for foreign investors and offers multiple business opportunities, particularly in the shipbuilding, transport and freight forwarding industries. Another positive for investors is that labour costs are relatively low in comparison to other European Countries.

English language skills

Polish people in their 50s and above grew up under communist Soviet rule and learnt Russian in school, so this generation are much less likely to be familiar with the English language.

However, the younger generation are much more likely to be proficient in written and spoken English. Around 14 million Polish people have some level of English proficiency out of a total population of around 38 million.. The 2022 EF English proficiency index lists Poland at number 13 (classed as high proficiency).

Trade opportunities and incentives

The UK enjoys a growing trading relationship with Poland, which was worth £22.2 billion in 2019. There are a huge number of opportunities available in Poland for UK companies within many industries, including financial services, energy, infrastructure and technology.

There is a system of incentives in place to encourage overseas businesses to invest in the Polish economy with funds provided by both the European Union and domestic sources.

The help available is wide-ranging and specific to each project and includes benefits such as regional aid, government grants and designated economic zones offering favourable conditions.

EU membership

Between 2014 - when first joining the European Union - and 2020, Poland received more than €100 billion from the EU’s budget. UK investors' potential access to the EU single market and its 500 million consumers should see their investment opportunities considerably widened.

Adopting the euro is one of the Polish government's top priorities, but a target date has not been set yet. This would result in a safer and more stable currency for UK businesses in the country.

When you need to convert zlotys into pounds, get in touch. We’ll help you protect your profit margins and get transparent, competitive rates online or over the phone.

Challenges of Doing Business in Poland

Despite the noteworthy aspects of good business opportunities and practices in Poland, there are some challenges that you may face.

Bribery and corruption

Corruption in Poland - although below the world average - is not insignificant. According to the findings of the Global Corruption Barometer (GCB) last year a significant 72% of Polish people believe bribery and corruption is a major problem in their country.

In 2021 the global policy forum OECD working group on bribery asked that Poland implement legislative changes initially requested back in 2013, to combat foreign bribery.

Excessive bureaucracy

According to the Global Business Complex Index 2022, Poland rates tenth in the world for having the most complex business regulations.

UK businesses may find dealing with Polish bureaucracy frustrating. Difficulties can arise due to Poland’s swiftly changing legislation, which can sometimes leave businesses struggling to find the time to implement required changes. Tax requirements are time-heavy, although some changes have now been implemented. The main change was the introduction of the ‘Polish Deal’, which has overhauled the nation’s taxation system.

Another difficulty when trading with Poland is that although companies are now allowed to submit financial statements electronically, many widely-used signature providers are not automatically accepted which can cause delays.

Cultural implications

You can expect possible culture clashes setting up a business or starting a company in Poland. Polish culture is generally conservative and traditional.

The vast majority of the population identify as Catholic with 40% of the population regularly going to mass; unlike the predominantly secular UK.

Abortion is banned throughout Poland in almost all cases and same-sex marriage and civil partnerships are illegal.

Impact of the war in Ukraine

In October 2022, the World Bank predicted a sharp slowdown in growth for Poland during 2023, due to the impact of the war in Ukraine. It’s expected that the Polish Economy will grow at 1.6% next year. This compares to the 4% anticipated for 2022.

The ongoing conflict has unsurprisingly resulted in trade disruptions, reduced consumer confidence and of course huge economic strains and uncertainty following massive hikes in energy supply. The Polish zloty fell suddenly after the recent missile blast in Poland, but following US President Biden’s comments that the missile was unlikely to have been fired from Russia, it subsequently stabilised.

Tensions with the EU

It was reported in November 2022, that Poland faces losing up to 110 billion euros in aid. EU finance has played a crucial part in boosting Poland’s post-communist economy.

Loans and grants allocated for Poland’s post-pandemic recovery, along with cohesion policy cash injections, could potentially be jeopardised following concerns that Poland has not met the conditions attached to receiving the aid. The concern is that new legislation in Poland is incompatible with EU obligations, leaving judges potentially facing repercussions following their rulings. This could leave them vulnerable to political control.

The Polish government are in talks to try and resolve this, but losing the funding would be a major blow and could negatively affect many aspects of the economy, including decreasing the attractiveness of foreign investment.

Key Takeaway

Potentially more could be done politically to combat bribery and corruption and excessive bureaucracy within Poland, and the war in Ukraine has brought economic uncertainty to the country. Many UK businesses may feel at odds with Poland’s cultural views regarding issues such as LGBT rights.

However Poland’s educated English-speaking population, strategic geographical location and growing trade relationship with the UK could prove an option worth exploring for many UK businesses.

Use Clear Currency When Doing Business in Poland

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How to Do Business in Poland