Tax Supervisor at RSM Poland
It is no secret that Germany is Poland’s largest economic partner. According to the Ministry of Entrepreneurship and Technology, German consumers were the recipients of about 28% of goods and services exported by Poland in 2008. Along with the growing Polish GDP, we can notice increased imports from Germany: about 22% of goods and services imported by Poland come from our Western neighbour, which, in turn, makes us the 7th largest recipient of German exports.
As business cooperation between Poland and Germany grows, there are more and more domestic entities that make and further enhance their strong presence on the market west of the Oder River, as well as more and more German companies that decide to launch or intensify their business operations in Poland.
Doing business in Poland: theory vs. practice
What form do foreign investors choose for their business in Poland? These are usually corporate entities or branches of foreign companies operating pursuant to Polish regulations. It may seem pretty straightforward at first glance; after all, both Poland and Germany are members of the European Union, and the EU largely determines the contents of the legal order in its Member States. That is theory. In practice it turns out that legal solutions for specific industries are different in different countries. It takes a lot of effort for a foreign investor to adjust their business to Polish realities and legal regulations in force in Poland. What makes running a business abroad even more difficult is the communication clash involved in communicating in a foreign language (which is particularly challenging in contacts with Polish institutions), along with cultural differences and being unaware of the common practice and local habits.
Role of the advisor
In such circumstances, seeking professional support proves necessary. An experienced advisor will help solve problems with starting your business, along with problems involved in business development and running it in line with the changing regulations. Board members of foreign companies often lose sleep over complicated legal systems, frequent tax audits or requirements concerning the settlement and verification of tax liabilities. Further problems may emerge once a foreign investor wishes to employ people in Poland.
What is crucial is that most of these problems may be encountered both by entities that choose to have a permanent establishment in Poland, like a company or a branch, and investors who cooperate with Polish partners only from time to time, and do not have their own staff and technical facilities in Poland.
Even though this article may not seem optimistic, we should bear it in mind that the economy in Poland will continue to grow very dynamically despite these often unfavourable circumstances. And there is a solution to every problematic issue; as Winston Churchill said: “Difficulties mastered are opportunities won”.
With this idea in mind, in my upcoming posts I will try to present solutions developed by the German Desk Team of RSM Poland that help foreign investors, in particular entities from the German-speaking countries, successfully launch or intensify their business activity in Poland in the context of often complicated and changing legal and fiscal regulations.