Poland

Poland, a country rich in history and culture, stands as a testament to resilience and the indomitable spirit of its people. Nestled in the heart of Central Europe, Poland serves as a geographical and cultural bridge between the East and West of the continent. Bordered by Germany to the west, the Czech Republic and Slovakia to the south, Ukraine and Belarus to the east, and Lithuania and the Russian exclave of Kaliningrad to the northeast, Poland’s strategic location has historically positioned it as a crossroads of European trade and cultural exchange. To the north, Poland boasts an extensive Baltic Sea coastline, which has been central to its maritime trade and economic development.

The rebirth of Poland as an independent nation came in 1918, in the aftermath of World War I. Yet, this independence was short-lived, as World War II brought unimaginable devastation to Poland, including the horrors of occupation and the Holocaust. Post-war, Poland found itself within the Soviet sphere of influence, leading to decades of communist rule.

The year 1989 marked a turning point in Polish history with the fall of communism, spurred by the Solidarity movement led by Lech Wałęsa. This transition ushered in a new era of democracy and market reforms, paving the way for Poland’s remarkable economic transformation and its integration into European and global institutions. In 2004, Poland joined the European Union, signifying its return to the heart of Europe and underscoring its role as a dynamic and integral part of the European community. 

Poland’s prime location, combined with its rich history and dynamic economy, continues to attract foreign direct investment, fostering growth and innovation. As a country that has witnessed the ebb and flow of European history, Poland today stands as a testament to resilience and progress, poised at the crossroads of a rapidly integrating Europe, offering unique opportunities for business, culture, and tourism.

General Information

• Official Name: Republic of Poland
• Population: 36,821 million (World Bank 2022)
• Capital: Warsaw
• Main Language: Polish
• Major Religion: Christianity
• Monetary Unit: Złoty (PLN)
• Main Industry: Machine Building, Iron and Steel, Mining Coal, Chemicals, Ship Building and Food Processing
• GNI per Capita: US $42,390 (World Bank 2022)
• Internet Domain: .pl
• International Dialing Code: +48

How Do I Say in Polish?

• Hello: cześć
• Good morning: dzień dobry
• Good evening: dobry wieczór
• Do you speak English?: Czy mówisz po angielsku?
• Good bye: Żegnaj
• Thank you: dziękuję
• See you later: Na razie

Doing business in Poland presents a host of opportunities for entrepreneurs and international companies looking to expand. With its strategic location in Central Europe, robust economy, and membership in the European Union, Poland serves as a gateway to both Eastern and Western markets. 

Poland's prime location at the heart of Europe offers unmatched access to over 500 million consumers across the EU and beyond. Its well-developed infrastructure, including modern roads, railways, and airports, facilitates efficient logistics and supply chain operations, making it an ideal hub for manufacturing, distribution, and trade.

Poland's economy, one of the largest in Central Europe, has shown remarkable resilience and growth over the past decades. Its diverse market encompasses over 38 million consumers, presenting significant demand across various sectors. Poland's ongoing development and investment in technology and infrastructure continue to enhance its attractiveness to foreign investors.

The Polish government offers a range of incentives to encourage foreign direct investment (FDI), including tax reliefs, grants, and special economic zones (SEZs) with favorable conditions for setting up businesses. The country's regulatory framework is designed to support entrepreneurship and protect investments, further boosted by its stable political climate.

Poland's economy is diversified, with strengths in manufacturing, automotive, information and communication technology (ICT), research and development (R&D), and business process outsourcing (BPO). The country is also gaining recognition in the startup ecosystem, particularly in fintech, gaming, and tech innovations, supported by a growing venture capital market.

Expanding into Poland offers businesses a strategic advantage in accessing European markets, a supportive investment climate, and a wealth of human capital. Its economic stability, combined with ongoing growth and development, makes Poland a compelling choice for companies aiming to establish or extend their presence in Europe. As Poland continues to embrace innovation and development, the opportunities for businesses across various sectors look set to grow, making it an opportune time to consider Poland for your business expansion.

Foreign Direct Investment (FDI) in Poland is supported by a comprehensive framework designed to attract and facilitate investment from abroad. This framework includes a range of incentives, financial aids, and supportive agencies, making Poland one of the more attractive destinations for FDI in Europe. 

Foreign Direct Incentives (FDI) in Poland

Poland offers a variety of incentives aimed at encouraging foreign investment, enhancing the country's competitive position, and driving economic growth. These incentives are tailored to support businesses across different stages of investment and operations:

• Tax Incentives: Special Economic Zones (SEZs) offer significant tax advantages, including income tax exemptions or reductions for businesses meeting specific investment criteria, such as creating jobs or making substantial capital investments in designated areas.
• Cash Grants and Subsidies: The Polish government provides direct financial support for selected investments, especially those contributing to innovation, R&D, job creation, and regional development. These grants are accessible through various programs, often co-financed by the European Union.
• Real Estate Tax Exemptions: Local authorities may offer exemptions or reductions in real estate taxes to businesses undertaking significant investment projects that contribute to local economic development.
• R&D Support: Companies investing in research and development can benefit from additional incentives, including tax deductions for R&D activities, and direct support for innovation projects.

Key Foreign Direct Investment (FDI) Sectors in Poland

In Poland, the Foreign Direct Investment (FDI) opportunities span a wide range of sectors, reflecting the country's diversified economy and strategic focus on growth and innovation. Here's a closer look at some of the key sectors where FDI is particularly encouraged and available:

• Manufacturing and Production: Opportunities in automotive, aerospace, electronics, and food processing industries, leveraging Poland’s strong industrial base and skilled workforce.
• Information and Communication Technology (ICT): FDI potential in software development, cybersecurity, and IT services, supported by a robust digital infrastructure and a tech-savvy talent pool.
• Research and Development (R&D): Incentives for investment in innovation centers and R&D facilities, particularly in biotechnology, pharmaceuticals, and engineering, driven by Poland's focus on advancing its knowledge economy.
• Business Process Outsourcing (BPO) and Shared Services Centers (SSC): Growing sector with opportunities for foreign investors to set up outsourcing and shared services operations in finance, HR, and IT services.
• Renewable Energy and Clean Tech: Investment prospects in wind, solar, and other renewable energy projects, in line with Poland’s commitment to sustainability and reducing carbon emissions.
• Real Estate and Infrastructure: Opportunities in developing commercial, industrial, and residential real estate, as well as participation in public-private partnership (PPP) projects for infrastructure development.
• Logistics and Warehousing: Due to its strategic location, Poland offers ample opportunities for developing logistics hubs and warehousing facilities to serve the European market.
• Tourism and Hospitality: Potential for investment in hotels, resorts, and tourism services, capitalising on Poland's cultural heritage, natural landscapes, and growing tourism industry.

Foreign Direct Investment (FDI) support in Poland 

To support these FDI opportunities, the Polish government, through agencies like the Polish Investment and Trade Agency (PAIH) and local authorities, provides a range of incentives, including tax breaks, grants, and assistance in navigating the investment process. Special Economic Zones (SEZs) offer particularly attractive conditions for new investments, with benefits tailored to the needs of foreign investors across various sectors. Several Polish government agencies play pivotal roles in facilitating FDI, providing information, assistance, and support to foreign investors:

• Polish Investment and Trade Agency (PAIH): PAIH is the main agency responsible for promoting Poland as a favorable investment destination. It offers comprehensive services to investors, including information on legal and economic conditions, assistance in finding the right partners and locations, and support throughout the investment process.
• Ministry of Development Funds and Regional Policy: This ministry is instrumental in managing EU funds and implementing regional development policies. It oversees programs that provide financial support for investments contributing to economic growth and cohesion.
• Ministry of Finance: The Ministry of Finance is involved in setting fiscal policies and tax incentives that affect foreign investors. It provides guidelines on taxation and financial regulations relevant to businesses operating in Poland.
• Special Economic Zones (SEZs): Managed by regional authorities or dedicated management bodies, SEZs offer tailored support and incentives for businesses establishing operations within their designated areas. These include tax benefits, administrative support, and assistance with infrastructure and real estate.

Investing in Poland is an increasingly attractive option for global investors due to a combination of strategic advantages that position the country as a key player in the European market. 

Strategic Central European Location in Poland

Poland's geographic location at the crossroads of European trade routes offers unparalleled access to both Western and Eastern European markets. This strategic position facilitates efficient logistics and distribution, making it an ideal hub for companies aiming to penetrate the vast European Union market and beyond.

Robust and Growing Economy in Poland

Poland boasts one of the largest economies in Central Europe and has demonstrated remarkable resilience and growth, even in the face of global economic fluctuations. Its consistent economic performance, known by a stable GDP growth rate, makes it a safe and promising destination for long-term investments.

Competitive Labor Market in Poland

Investors in Poland benefit from access to a highly skilled, educated, and competitive labor pool. The country is renowned for its specialists in various fields, including engineering, IT, and finance, offering companies a rich resource of talent at competitive labor costs compared to other EU countries.

Supportive Investment Climate in Poland

Poland's government is committed to fostering a pro-business environment, offering a range of incentives for foreign investors. These include tax reliefs, grants, and the opportunity to operate within Special Economic Zones (SEZs), which provide favorable conditions and significant tax advantages.

EU Membership Advantages in Poland

Being a part of the European Union, Poland enjoys the benefits of the single market, allowing for the free movement of goods, services, capital, and labor. Investors gain the advantage of operating in a stable regulatory environment and have access to various EU funding and support programs.

Diverse and Innovative Economy in Poland

Poland's economy is not only robust but also diverse, encompassing sectors like manufacturing, automotive, ICT, and services. The country is also at the forefront of innovation in fintech, gaming, and other tech industries, supported by a dynamic startup ecosystem and access to venture capital.

High Quality of Life in Poland

Poland offers a high quality of life, with its vibrant cities, rich cultural heritage, and picturesque landscapes. This attractive living environment not only draws talent but also enhances the well-being and productivity of the workforce.

Commitment to Infrastructure and Technology Development in Poland

Continuous investments in infrastructure and technology ensure that Poland remains competitive in the global market. The country's commitment to enhancing its roads, railways, airports, and digital infrastructure supports business operations and contributes to a seamless investment experience.

Investing in Poland presents a unique opportunity to tap into a growing market with a favorable investment climate, strategic location, and a wealth of resources. For businesses looking to expand or establish a presence in Europe, Poland offers a compelling blend of economic stability, market potential, and innovation conducive to achieving success in the global arena.

This information is currently being updated for 2024.

An in-country bank account is mandatory to process payroll in Poland. It is possible to open either a Polish currency or foreign currency bank account in Poland.

To open an account in Poland, the foreign national will normally be required to show their passport and evidence of residence in Poland. Some banks require a minimum deposit.

Normal banking hours are from 9:00 to 17:00, Monday to Friday. Banks are closed on Saturdays and Sundays.

This information is currently being updated for 2024.

Foreign employers who have no presence in Poland must obtain a NIP (Taxpayer Identification Number) by contacting the tax office to pay social security contributions.

If the employer is already registered in Poland as an EU VAT taxpayer, the VAT identification NIP number can be used by removing the PL symbol.

Once a NIP has been obtained, employers must register as a contribution payer by completing a ZUS ZPA form and submitting it to the Social Security Institution (ZUS).

The tax year runs from 1st January to 31st December.

This information is currently being updated for 2024.

Employees are taxed on any income earned if they have lived in the country for at least 183 consecutive days during the tax year.

All employees start the tax year on the 12% tax rate and only move to 32% when the annual threshold is exceeded. Tax returns should be submitted between 15 February and 30 April every year.

This information is currently being updated for 2024.

Social security contributions are categorized into:

• Old-age pension
• Disability pension
• Sickness insurance
• Work accident insurance

Each social security contribution must be calculated and listed separately on employee payslips.

From 2023, employees are automatically enrolled in the pension provision scheme, Pracowniczy Plan Kapitalowy (PPK), who are aged between 18 and 55. Employee contributions are taken from net pay and aren’t tax deductible or deemed as income. Employer contributions must be considered a benefit in kind and must be added to monthly tax calculations.

This information is currently being updated for 2024.

Employers aren’t required to follow a formal registration process for new employees with the tax office.

This information is currently being updated for 2024.

Employers aren’t required to follow a formal resignation process for leavers with the tax office but must issue leavers with a work certificate. A work certificate must include the following:

• Period of employment.
• Position held.
• The number of holidays taken in the current calendar year.
• The number of sick days taken in the calendar year.
• The number of days and dates of maternity and parental leave taken.

This information is currently being updated for 2024.

In Poland, the average working hours are 40 hours a week (8 hours a day - 5 days a week). Working hours are usually from 8:00 to 16:00.

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.