Information on key security and political risks which UK businesses may face when operating in Poland.

1. General overview

Poland has become Europe’s biggest economic success story since it transformed into a market economy in the early 1990s. The EU´s 6th largest market by population, Poland has enjoyed 26 years of unbroken growth – driven by strong domestic demand, dynamic exports, improved productivity, foreign investment, a stable banking system, and a significant inflow of EU cohesion funds.

Politically stable, and member of the European Union and NATO, Poland is quickly catching up with the West. Its GDP per capita went up from 49% of the EU25 average in 2004 to 71% in 2018 and recently stands at $US15,430.

2. Political

Poland is currently ruled by the conservative Law & Justice (PiS) party who in October 2015 won the first overall government majority since the fall of communism in 1989. In the 2019 parliamentary elections, PiS once again won an outright majority in the Lower House, however, narrowly lost control of the Upper House to the opposition. PiS’ programme focuses mainly on domestic issues: increasing social transfers, lowering the retirement age, and supporting domestic industries, including the coal sector. Executive power is in the hands of Prime Minister Mateusz Morawiecki (who was appointed in December 2017). The President and Head of State (since May 2015) is Andrzej Duda – both representing PiS. The next presidential election is scheduled for spring 2020, and the next general election – for autumn 2023.

On social issues PiS is conservative, but on economic policy the party has positioned itself to the left. Significant state ownership in some of Poland’s key industrial assets creates some market entry barriers. In 2015 Poland adopted a law requiring investors to get approval from the government to buy a stake of 20% or higher in strategic industries such as power generation, chemicals and telecommunications. The Poles are unlikely to join the Eurozone soon.

Bilateral relations between Poland and the UK are strong and have evolved into a strategic partnership in recent years. The two countries enjoy a growing trading relationship, which was worth £21.8 billion in the four quarters to the end of Q2 2019, a 4.6% increase from the four quarters to the end of Q2 2018. Polish exports to the UK have more than tripled since accession to the EU to reach £13.7 billion in the four quarters to the end of Q2 2019 making the UK Poland’s 3rd largest export market after Germany and Czech Republic. UK exports of goods and services to Poland have doubled since accession to the EU and reached £8.2 billion in the four quarters to the end of Q2 2019, an 8.1% increase from the previous four quarters. Key items include motor industry products and pharmaceuticals.

3. Economics

The Polish economy grew at a faster rate of 5.1% in 2018 compared to 4.6% in 2017. The World Bank forecasts 4.0% in 2019.

Poland’s economic fundamentals remain robust for the short-term, driven by strong domestic demand, dynamic exports, foreign investment and a significant inflow of EU funds. According to PwC, the economy has the potential to grow around 3% per annum until 2030 and 2.5% per annum until 2050. Public debt is predicted to stay below the Polish constitutional ceiling of 60% and the deficit will not exceed 3% of GDP.

However, worsening demographics, with an ageing society and shrinking labour force, will create policy challenges. In the short term, there will be a need to consolidate debt and spending without stifling economic growth. Over the longer term, Poland’s economic performance could improve if the country addresses some of the remaining deficiencies in its road and rail infrastructure, business environment, rigid labour code, commercial court system, government red tape, and burdensome tax system. Poland is making progress in simplifying its tax system reducing the number of hours a company needs to meet its tax obligations from 420 hours to 260 at present.

The government aims to get Poland out of the middle-income trap and transform it into a high-tech, knowledge-based heavyweight economic player, by mobilising domestic capital and creating innovative Polish national champions in sectors such as e-mobility, shipbuilding and automotive. It proposes a more hands-on role for the state, modeled on the German approach, to wean Poland off its dependency on FDI and cheap labour. Ambitiously, GDP per capita should reach the EU average in 2030. The Polish minimum wage in 2019 is 2250 PLN gross monthly (around £476), but the ruling party announced it would increase sharply to reach PLN 4,000 by the end of 2023 (around £816).

In 2018 the Foreign Direct Investment inflow into Poland stood at US $11.47 billion as compared to US $9.17 billion in 2017 according to UNCTAD. EY ranked Poland as number two in Europe in terms of FDI related job creation with 22,000 new work places in 2016. Key foreign investors in 2018 included the Netherlands, Germany, Luxembourg and Malta. According to National Bank of Poland data, in cumulative terms at the end of 2018, the UK was 7th largest investor in Poland (EUR 9 bn) after Netherlands, Germany, Luxembourg, France, Spain and Austria.

Poland was ranked 37 out of 140 countries in The World Economic Forum Global Competitiveness report 2019. The report identified tax regulations and rates, restrictive labor regulations and policy instability as the most problematic factors for doing business and recognized ongoing improvements in infrastructure, education and macroeconomic environment. Poland currently holds 40th place globally in World Bank’s ease of doing business ranking compared to 33rd in 2018. The Polish government introduced a `Business Constitution’ in April 2018, a package of laws to improve the business environment, including exemptions for start-ups and micro-businesses from registration and social security contributions, In addition, from 30 June 2018, Poland granted itself the status of a Special Economic Zone with preferential tax rates for 15 years for companies depending on the size of investment and their location.

The key takeaways for companies wanting to visit the market are:

just 2 hours from UK by plane

low risk market with same EU market regulatory framework as the UK

significant opportunities for UK companies in a number of key sectors such as infrastructure, defence and security, financial services and automotive

Poland is the largest beneficiary of EU funds (over EUR 105.8 billion in 2014 to 2020)

resilient economy which has seen growth throughout the global economic crisis, with catch-up growth potential remaining

largest consumer market in newly joined EU countries, springboard for regional expansion

wealthier consumers clustered in 7 high-growth agglomerations (Warsaw, Poznan, Wroclaw, Krakow, Gdansk/Tri-City, Katowice/Upper Silesia, Lodz)

greatly improved transport infrastructure since 2010, with hundreds of kilometres of new motorways, faster inter-city trains, better logistics

politically stable, pro-business government

See Poland’s exporting guide

4. Business and human rights

Poland has ratified 91 ILO conventions including the 8 fundamental conventions. Domestic labour law is compliant with the EU regulations, including those on anti-discrimination. Poland has developed a network of labour inspectorates. Trade unions are legal, employees are allowed to strike but only under the conditions set out in relevant domestic legal act.

The Polish Information and Foreign Investment Agency (in English) covers a wide range of economic and business areas, including information on doing business in Poland, economic statistics, trends, foreign trade details, inter-EU trade and a breakdown by industry and sector.

Poland has a published government strategy to combat the problems of human trafficking and labour exploitation. Poland is one of the main source countries for revealed victims of labour exploitation in the UK. This issue is being addressed both by Poland and the UK.

Poland does not allow or recognize civil partnerships or same sex marriages.

5. Bribery and corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world. In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

In 2018 Poland was ranked 36 out of 180 countries in the Transparency International’s corruption perception index (CPI).

The country has made great strides in combating corruption in recent years through a combination of law enforcement action and political will. The Polish Anti-Corruption Bureau has been set up and reports of corruption are now far less common. Public willingness to confront the problem has also led to a reduction in opportunities for corruption. The law gives the person in receipt of a bribe immunity from prosecution if they report it to the authorities and assist in the prosecution of the bribe giver.

Visit the Business Anti-Corruption portal providing advice and guidance about corruption in Poland and some basic effective procedures you can establish to protect your company from them.

Read the information provided on our Bribery and corruption page.

6. Terrorism

There is a low threat from terrorism in Poland. Read the information provided on our terrorism threat.

7. Protective security / organised crime

Most visitors to Poland experience no difficulties. But you should be alert to the possibility of street crime and petty theft, and that foreigners may appear to be lucrative targets. Keep valuables and cash out of sight, especially in crowded areas and tourist spots where pickpockets and bag snatchers operate.

Caution should also be taken in securing premises where goods of value are stored. Businesses in Poland make extensive use of security guards, in such cases, a reputable company should be used.

Read the information provided on our safety and security page.

Levels of organized crime in Poland remain low and most businesses will be unaffected. Corruption, fraud and theft do exist, though Poland benefits from a robust Anti-Corruption Bureau and a professional and capable police force. Organised crime groups also engage in smuggling of commodities, illicit goods and people trafficking. Tobacco and alcohol are some of the most commonly smuggled goods.

Read the information provided on our organised crime page.

8. Intellectual property

Poland adheres to all EU laws regarding copyright and intellectual property and the local branches of international watchdogs monitor breaches that may occur, including downloading of illegal software which mostly concerns the music/film industry. Nevertheless ‘piracy’ of intellectual property remains an important issue the Polish government needs to deal with. Poland has not signed the Agreement on a Unified Patent Court.

Read the information provided on our Intellectual Property page.

Contact the Department for International Trade (DIT) team in Poland for more information and advice on opportunities for doing business in Poland.

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