Strategically located in the center of Europe between Germany and Russia, Poland also shares borders with the Czech Republic, Slovakia, Ukraine, Belarus, and Lithuania. It poses an advantage for investors and entrepreneurs because of the access to the 500 million population of the European Union (EU). Moreover, the country’s untouched natural landscape composed of preserved forests, natural parks, and wilderness attracts millions of tourists every year. Find out what you need to know when launching or expanding your business in Poland.
Doing Business in Poland
Poland maintains a positive attitude towards new investors, inviting them with a friendly business climate, clear tax policies, and legal rules. The World Bank ranked Poland 24th globally in terms of ease of doing business. Bloomberg also christened Poland as the best country for doing business in Central and Eastern Europe.
Beyond that, Poland is a member of the EU, the European Economic Area (EEA), the World Trade Organization, and the Organization for Economic Co-operation and Development (OECD). Due to the reforms and economic regulations in favor of business implementations by the EU, private companies have more control over their own business with less government intervention.
It has become one of the most attractive European countries for foreign entrepreneurs because of its stable economy, highly educated workforce, and strategic location right at the heart of Europe.
Foreign entrepreneurs can take advantage of the investment incentives Poland offers. It includes tax credits, help in the facilitation of employment, and benefits for investment in emerging and technological industries.
Legal System in Poland
The legal system of Poland is based on civil law tradition. The Polish common courts are composed of district courts, provincial courts, and the courts of appeal.
Business Entities in Poland
Nine different business entities are available when planning to start a business in Poland. You can conduct business on your own through self-employment or carry out operations through a through a civil partnership, a registered partnership, limited partnership, limited joint-stock partnership, professional partnership, limited liability company, and joint-stock company.
On the other hand, if you are not looking to start an entirely new corporate entity but rather wish to expand your existing company from your home country, you can open a branch office or representative office in Poland.
Taxation in Poland
Both employees and businesses will be charged a corporate income tax (CIT) rate of 19%. A lower CIT rate of 9% is available for “small taxpayers.” A company should have only made revenue of less than EUR 2 million per tax year to qualify for the 9% CIT rate.
Polish residents are taxed on their worldwide income. Non-residents are only taxed on their income earned in Poland. Aside from CIT, there is a standard VAT rate of 23%. VAT is reduced to either 5% or 8% for a particular food, books, newspapers, and other essential services.
Working Hours in Poland
Standard working time in Poland is at 40 hours per week and should not go beyond eight hours per day over a five-day workweek. Work accomplished over 40 hours a week is considered overtime and the employee is entitled to an allowance, which should be 1.5 times their regular hourly rate.
The typical weekday working hours are from 8 AM to 4 PM. On Saturdays, it is from 8 AM to 2 PM. Employers can introduce other work schedules as long as both employers and employees agree on them.
Paid Vacation Leave
Full-time employees are entitled to paid vacation leave of 20 days annually if an employee has been working for less than 10 years, and 26 days if the employee has been working for more than 10 years. An employee’s tenure is based on all periods of employment, regardless of employer.
If leave is unused, it can be carried over into the next calendar year for up to three years. Alternatively, if an employee exceeds the use of paid leave, the excess days will be reduced from the following calendar year.
Employees receive sick pay from their employer for the first 33 days of illness for each calendar year. If an employee takes a leave of absence for more than 33 days, the Social Insurance Institute (ZUS) will provide a ‘sickness allowance’ for the entire time the employee cannot work up to 182 days.
To qualify for these benefits, a registered doctor needs to provide a certification of temporary incapacity for work.
Public Holidays in Poland
The following are public holidays in Poland:
- New Year’s Day
- Three Kings’ Day
- Easter Sunday
- East Monday
- Labor Day
- Constitution Day
- Pentecost Sunday
- Corpus Christi
- Assumption Day
- All Saints’ Day
- Independence Day
- Christmas Day
- St. Stephen’s Day
Healthcare in Poland
Both Polish residents and non-residents are entitled to free healthcare benefits as long they have health insurance. These health benefits are provided by the National Health Fund.
Some medicines are partly refundable through the National Health Fund and must be approved by the Ministry of Health. Private healthcare is available and widely used in Poland due to the long wait times for public healthcare services.
Partner With INS Global
As one of the world’s leading HR Solutions firms INS Global is able to assist your business in its expansion. For the past 15 years we have helped companies from all over the world setup and carry out operations. If you are considering starting or expanding your business to Poland, having the right partner could help you overcome the administrative challenges usually associated with a company setup. Contact us today and let us help you simplify doing business in Poland.