Poland is playing a unique role in pan-European transportation system, benefiting from central location in Europe. Thus, Poland has modern & convenient road, rail & air connections with all European Union countries and is well prepared for trade with other countries of Central & Eastern Europe. Main polish seaports on Baltic Sea coast (Szczecin, Gdynia & Gdańsk) are connected with all important seaports in Europe & world. As a result, Poland is ideal location for operation of companies on the European market, Central & Eastern Europe and around the world.
Banks & Money
The currency of Poland is the New Polish Zloty (PLN), officially introduced into the monetary system on 1 January 1995, when the Polish National Bank made the old currency (PLZ) denominated to new PLN at the rate of 10,000 PLZ = 1 PLN. Commonly used abbreviations of New Polish Zloty: "zł", "PLN". PLN is currently fully convertible (in currency exchange offices and banks), current FX rates of major currencies are presented below:
Interest rates are now at their lowest historical level (main reference rate is 1.50% p.a.) and reflect the economic situation in the European Union. Low interest rates contribute to economic growth and stimulate the development of the Polish economy.
Polish banking system is represented by nearly 50 commercial banks, where the share of assets of foreign banks is nearly 70%. The banking sector is highly competitive, so all banks are constantly upgrading its infrastructure and offer more attractive services & products, generally banking service is at a very high European level. Banks’ offer is very broad and modern and includes current accounts held in PLN and foreign currencies, all main currencies deposits, domestic and foreign payments, working capital lines and investment loans, international trade products (guarantees, letters of credit and documentary collection) in both PLN and foreign currencies.
The capital market in Poland is created by a number of modern, competitive institutions and companies, of which the most important are: Warsaw Stock Exchange (main market), New Connect (alternative market), Catalyst (corporate, municipal and treasury bonds & securities) and CeTo (unregulated market), brokerage houses, investment companies, investment fund companies, investment and pension funds, transfer agents, and clearing and custodian banks. All operators in the capital market are monitored & supervised by state-owned Financial Supervision Commission (KNF).
Law & legal issues
Legal system in Poland is of continental type, with visible influence of German and French law. The main sources of universally binding law in Poland are:
- ratified international agreements
- internal regulations
Judiciary of Poland is held by:
- supreme court
- ordinary courts - district, regional and appeal
- administrative courts
Poland is a stable country in terms of the legal system, but there are many areas that should be further developed and improved (e.g. speed of courts litigation, excessive bureaucracy of government offices or ambiguity of certain regulations).
Poland has a stable and clear tax system based on two types of taxes:
- direct taxes:
- income tax (PIT or Personal Income Tax)
- corporate tax (CIT or Corporate Income Tax)
- property tax
- other (agricultural tax, stamp duty tax, tax on minerals)
- indirect taxes:
- value-added tax (VAT)
- excise tax
- gambling tax
Base levels of the most important taxes are:
- income tax on individuals (PIT) - 18% (for annual income up to the amount of PLN 85.528) and 32% (for annual income above the amount of PLN 85.528). The Act provides a number of exemptions, deductions and tax breaks.
- corporate income tax - 19%. The Act provides a number of exemptions, deductions and tax breaks for this kind of tax. One of the most important is the possibility of covering the annual losses from incomes earned in the next consecutive five fiscal years, on condition that the amount of the reduction in any of these years did not exceed 50% of the amount of the losses.
- property tax - level of property tax is determined annually by the local municipal authorities and generally is not high (in the subjective assessment even low :-)).
Human resources & labour market
There are over 450 higher education institutions with a broad profile of education (universal, technical, economics, agricultural, medical, educational, marine, art) in Poland. Higher schools employ over 90 thousand teachers and lecturers who provide knowledge to nearly 1.7 million students. According to Eurostat calculations, the average cost of labour in Poland oscillate at 25-35% of the Western Europe average (EUR 8.4 vs. 24.6 EUR).
For Scandinavian countries, that comparison falls yet more attractive, because the average cost of labour in Poland is about 20% of the level of Nordic countries (approx. 40 euros). The beneficial effect will be slightly offset due to productivity, which in Poland is lower than the average of the European Union.
Legal forms of doing business in Poland The Polish legal system allows conducting business on the basis of the following forms:
Individual business is conducted and represented by an owner, sole entrepreneur. The owner is unlimitedly responsible on an exclusive basis for all liabilities of his business, both enterprise and personal assets.
CIVIL LAW PARTNERSHIP
Partnership is created on the basis of an agreement of partners who are committed to pursue a common economic objective. As a rule, the contributions of members are of equal value. All the partners are jointly and severally liable for all debts & obligations.
It is a partnership where the right and duty to represent the company may have any of the partners. Each partner is responsible for all obligations of partnership with all its assets, regardless of the amount of contributions.
LIMITED LIABILITY PARTNERSHIP
It is a partnership in which at least one of the partners is liable to creditors for the company's obligations with all its assets (general partner) and at least one partner must have a limited liability (limited partner).
LIMITED JOINT-STOCK PARTNERSHIP (S.K.A.)
It is a company acting under its own name, where at least one of the partners has unlimited liability to creditors for the company's obligations (general partner), and at least one partner is a shareholder. The minimum share capital amounts to PLN 50,000.
LIMITED LIABILITY COMPANY (SP. Z O.O.)
Commercial company established by one or more persons (entities), called partners, which none of them is liable for the company debts & obligations (except contributed capital). The minimum capital of the company amounts to PLN 5,000. The company is obliged to keep accounting books in accordance with the Accounting Act. Legal authority in the company is held by Management Board (at least one person) and Supervisory Board (optionally).
JOINT STOCK COMPANY (S.A.)
The minimum share capital is PLN 100,000. The shares belong to shareholders, not personally liable for debts & obligations of the company. The Company is obliged to keep accounting books in accordance with the Accounting Act. The governing bodies of the company are the Management Board (at least one person) and the Supervisory Board (obligatory).
Scandinavian companies doing business in Poland