Polish and German business cooperation (part 3 A bit about statistics)

16 April 2019

Polish and German business cooperation (part 3 A bit about statistics)

Tax Supervisor at RSM Poland

In the earlier post, we discussed several aspects of starting a business in Poland and presented legal forms of business that are most popular among foreign investors.

You may ask whether it is worthwhile to invest in Poland in the first place. Clearly, there is no universal answer to this question: it will always depend on the situation of a foreign entrepreneur, their individual needs, development plans and business prospects.

Poland as a destination for investors

Research shows, however, that Poland is among the leaders in Central and Eastern Europe in terms of the number of foreign direct investments and investment attractiveness. According to the Doing Business 2018 report, prepared by the World Bank and being one of the most comprehensive analyses of conditions of doing business, Poland ranks 27th in the world in terms of business-friendly environment.

The main drivers of doing business in Poland are not only geopolitical conditions and a good geographic location, but also a large and increasingly ready internal market, relatively high exports level, stable economy and support for new investments, such as certain tax reliefs. A highly educated staff is also a clear advantage. As compared to other European Union countries, Poland boasts a high percentage of people with a higher education or at least a vocational education. As regards the latter, according to the data published by Eurostat, we are ahead of such countries as: the United Kingdom, France, Germany and Italy. What is more, Poles have a good or a very good command of foreign languages, which is extremely important from the perspective of an employer or a business partner in the context of current trends and growing internationalisation.

With all this, an average of 92% of surveyed foreign companies say year after year that they are happy about being present and operating on the Polish market. What is less optimistic is the fact that the above mentioned Doing Business report has identified the Polish tax law and its frequent amendments as problematic. This has been confirmed by the Polish Investment and Trade Agency in their report on the barriers to foreign direct investments in Poland. According to foreign investors, income taxes and VAT prove particularly complex and troublesome in daily operations. Being unfamiliar with financial and fiscal intricacies and facing a multitude of incomprehensible documents, foreign business entities cannot actually operate in Poland in the long run without the support of experienced advisors.

Polish companies in Germany

It should be noted that business cooperation with Germany now tends to take the form of the expansion of Polish companies to the German market. According to the Polish-German Chamber of Industry and Commerce (AHK Poland), there are now about 1,000-1,500 companies with Polish equity in Germany and several dozen sole proprietorships run by Poles. And these figures keep growing. However, the investment attractiveness of the German market, with its 82 millions of consumers should not divert you attention from the legal restrictions in place in our Western neighbour. One of such restrictions is the regulation on the online sale on the territory of Germany and related new obligations for vendors and entities operating online sales platforms. 

This is just an example of problems to be faced by entities operating a given business abroad. It is worth mentioning here that RSM Poland, being a member of the RSM global network, can help you solve problems resulting from the need to bring your business in line with the local legal environment in almost any country of the world.


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