Is Poland a good market for foreign companies to invest in?
Poland is considered a good market for foreign companies to invest in. The country has a large consumer market, a well-developed infrastructure, a skilled workforce, and is member of EU and NATO. Poland has also one of the fastest-growing economies in Europe, providing a favorable environment for businesses.
Here are ten reasons why foreign companies may choose to invest in Poland:
1. Growing economy:
Since the collapse of the Berlin Wall Poland has enjoyed the greatest economic success in the history of its independence. Between 1990 and 2018 alone, the country's gross domestic product (GDP) grew nearly eight fold. From 2018 Poland’s GDP risen from $587.41B to $674.05B, a 14.75% increase. The Polish economy has also shown strong resilience to the financial crisis in 2008 and the coronavirus pandemic in 2020. GDP per capita in purchasing power standards (PPS) has risen from 60 percent of the European Union (EU) average in 2009, to 76 percent in 2020. Moreover, Poland's GDP amounted to more than 523 billion euros, ranking eighth in Europe and first among Central and Eastern European countries.
2. Strong consumer market:
Poland has a large and growing consumer market, with a population of over 38 million people, 9th among the 51 European countries.
3. Strategic location and access to EU market:
Poland is strategically located at the crossroads of Europe, making it a hub for trade and commerce. Poland, as a member of the European Union, is offering access to a market of over 500 million consumers.
4. Skilled workforce:
Poland has a well-educated and motivated workforce, particularly in technical fields. Knowledge of English and other foreign languages is very high in the population, especially among younger generations.
5. Favorable business climate:
The government has implemented measures to improve the business environment, including reducing bureaucracy and taxes.
6. Well-developed infrastructure:
Poland has a well-developed transport network, including road, rail, air and sea connections, making it easy for businesses to reach both domestic and international markets.
7. Low labor costs:
Poland remains one of the cheapest countries in Europe when it comes to labor costs with the average hourly bill of an employee still well under half the European average. Poland’s lower cost of labor as compared to many other EU countries, making it an attractive location for companies looking to lower their operating costs, and gives it a competitive edge over its European rivals, and to act as a lure for foreign investors looking to set up labor-intensive facilities.
8. Favorable business climate:
The Polish government has implemented measures to improve the business environment, including reducing bureaucracy and taxes.
9. Tax incentives for foreign companies:
The Polish government offers tax incentives and exceptions for foreign companies investing in certain industries, such as technology and innovation. The amount of the incentive (income tax exemption) depends on the value of incurred eligible costs of the investment (investment capital expenditures or two-year labor costs of the new employees); state aid intensity in a selected region, and size of the enterprise. The right to use the exemption is granted for 10, 12, or 15 years, depending on the investment’s location.
10. EU funding:
As a member of the EU, partner Polish companies can access a range of EU funding opportunities, including grants, loans and other forms of financial support.
Today, the economical map of Europe is being rewritten, and a “new European order” is being established. A pending resolution of the war in Ukraine, despite of its outcome, will guarantee without any doubts, an increased role of Poland in the region, as a rising economical, military and political power.
However, as with any market, foreign companies should conduct thorough market research and due diligence before making an investment.
Diginet offers help to US companies interested in exploring new opportunities for their products and service on Polish market. Please feel free to contact us to discuss how we can help you.