Starting a Business in Poland

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2. Starting a Business

Why Start A Business In Poland?

Poland never seems to have an easy ride. The Soviets decided to redecorate it with the red paint of Communism after the second World War. Poland didn't have much say in the matter and the rest of Europe was too busy venerably back-slapping eachother to take much notice. Not until the 1990s did things really start to change: obviously you open a McDonalds in Russia and the rest naturally falls into place. The Polish have buried the past and built their future... And the colour of Capitalism looks so much better.

Poland now enjoys a reputation as one of the quickest growing countries in Central Europe and the only way is proverbially up. Things really don't show any signs of slowing. The UK is Poland's fourth largest trading partner and our bilateral relationship is both sound and prosperous. The flood of foreign direct investment is self-evidence of the country's appeal to the ambitious entrepreneur.

The reason for cross-border direct investment is generally to access growing markets, or to decrease costs. Poland ticks both boxes. It is a dynamic marketplace: the largest market among the start-up EU countries, as well as a lower cost base than the veteran members. With its strategic geographical location, the country also plays a vital role as a gateway to the economic boomers in the east, namely Russia and Ukraine.

Our relationship with the Polish has indeed changed in recent years, not least because they're the target of our arsenal of jokes. By the way, have you heard the one about the Polish plumber? Never mind, because the one thing no one can joke about is Poland's new-found status as one of the most attractive locations for foreign investment in Central Europe.

So if Poland sounds like the perfect place to start your business, then read on to find out why setting up there may leave you laughing... All the way to the bank.

What is the population?

The population of Poland is approximately 38.1 million.

What is the time difference?

The time in Poland is GMT + 1

How is the climate?

The capital, Warsaw has a continental climate, with cold, snowy winters and mild summers. On average, summer temperatures range between 9C and 22C, while winter temperatures range between -4C and 6C. July is the wettest month, though rain does fall often throughout the year.

Krakow has a temperate climate. In summer, it is comfortably warm with occasional heat waves when arid air comes in from the east. Autumn in Krakow brings dry, warm days starting with morning mist. Winter is acute when the city is carpeted in snow and temperatures drop below freezing.

What is the currency?

The currency used in Poland is Zlotych (PLN). For an up-to-the-minute exchange rate, please use the currency converter located on this site.

Economic Overview

Poland is considered one of the most successful examples of the transition from communism to market economy. The return to democracy in 1990 was followed by liberalising the economy, privatisation of small and medium size State-owned companies and rapid growth of private sector.

Unemployment is falling expeditiously. At approximately 12.8% in 2007, it remains well above the EU average.

Poland's economic performance could improve if the country accounts for some of the deficiencies in its corporate environment. An inadequate commercial court system, a rigid labour code, bureaucracy, and persistent low-level corruption keep the private sector from reaching to its full potential.

Increasing demands to spend on health care, education, and the state pension create an obstacle for the Polish government's effort to hold the consolidated public sector budget deficit under 3% of GDP - a target which was achieved in 2007. The recent government of 2007 plans to further decrease the budget deficit with the aim of finally introducing the Euro. The new government has also made its intention clear to legislate pro-business reforms, reduce public sector spending growth, lower taxes, and heighten privatisation.

Agriculture plays an important role in Poland's economy. Agricultural land accounts for approximately 54% of the total area of the country; 38% of the Polish population live in rural areas and some 25% of the labour force is employed in agriculture. The contribution of agriculture to the GDP, however, represents only 3%. Marketable production accounts for only approximately 60% of the total agricultural output, with the rest of output being used for self-supply. Low use of chemicals is typical for Polish farms making its products generally eco-friendly and healthy.

Poland's main agricultural crops are wheat and other cereals, potatoes and fodder crops. Poland is the leading exporter of apple concentrate and is among the world's leading producers of berries, cabbage and carrot.

Poland's main industries are:

• Machine building
• Iron and steel
• Coal mining
• Chemicals
• Shipbuilding
• Food processing
• Glass
• Beverage
• Textiles

It's primary export commodities are:

• Machinery and transport equipment
• Intermediate manufactured goods
• Miscellaneous manufactured goods
• Food and live animals

And main import commodities are:

• Machinery and transport equipment
• Intermediate manufactured goods
• Chemicals
• Minerals
• Lubricants and related materials

What are the essentials to know?

The Polish Commercial Companies Code was established in 2001. One of the outlines for the new Code was that it should be accorded with European Law; accordance with law being an obligation under the Europe Agreement made in 1991. The Polish Commercial Companies Code has woven EU law into the Polish legal fabric. It draws on the experience of economically advanced countries, specifically Germany. The influence of Germany is particularly important to Poland, because there are many similarities between the two systems of law.

Labour and workforce

Wages and salaries are normally paid at least once a month. There is a minimum wage requirement, which should lawfully be obligated by all business entities in Poland. In 2006, the minimum gross salary for any full-time employee amounts to PLN 1,126 per month.

Working hours

Working hours should amount to an average of 8 hours a day and 40 hours in an average five-day week. In some cases, working a 12 hour day is allowed.

Etiquette

At meetings, attention should be paid to the following points:

• Giving business cards to those present is an accepted custom
• There is no need for cards printed in Polish
• The accepted dress for business meetings is formal, a suit and tie for men and a suit or dress for women
• It is customary to shake hands at business meetings. If you are a businesswoman from the west, you may be given a kiss on the hand
• At meetings with people with whom you are acquainted, giving flowers is an accepted custom

Advertising

There are many good advertising agencies operating in Poland, many of which handle a comprehensive range of advertising media. It is recommended you seek good advice before advancing with any marketing campaign.

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