In the first of a new series to help the Scottish business community Gareth Magee gives an insight into how to do business in Poland.
Key facts
Population: 38.5 million
Currency: Zloty
Capital City: Warsaw
GDP: €354m
Located at the heart of Europe, with historic ties to the UK, Poland is one of our leading trading partners. Recent migration means that those ties have become closer, with Poland a natural hub for Scottish businesses wishing to access Central and Eastern Europe.
EU, NATO and OECD membership make Poland a trustworthy and reliable partner. The country's growth record may have slowed down a bit, but is still above average for the EU. Crucially, Poland's EU membership creates investment opportunities for Scottish firms through access to the single market.
With a lower cost of living and labour, but without a compromise in terms of education, degree level qualifications and quality of output, Poland is the ideal gateway for Scots firms looking to spread their wings in Central Europe.
Much like Scotland, the key sectors are services (64%) and industry (24.6%), and the areas earmarked for high potential mirror some of Scotland's traditionally strong sectors, such as pharmaceuticals, electronics and outsourcing, so there are already natural synergies between the two countries.
One differentiator, but not a barrier, is business culture. While some international markets are vastly different, it has been said of Poland that the business approach is more akin to the American way of doing things - so it's not too far out of the Scottish comfort zone. Polish counterparts will tend to be more hierarchical and possibly more reserved than us Scots. In contradiction to this however, negotiation (which is a given stage in any deal), will often be brutally frank, so be prepared for this.
Setting up an operation in Poland isn't overly complicated, and a number of EU funding programmes and a wide range of incentives, tax exemptions and funding can be of benefit to Scottish businesses.
Special Economic Zones (SEZs), some of which are in the main business areas, offer overseas investors favourable tax conditions - such as exemption from Corporate Income Tax. Other benefits include fully prepared business plots within the SEZs, legal support for the procedures connected with the investment process, local real estate tax exemptions and support to set up new workplaces.
Whether setting up a company, or establishing a branch or representative office, there are, as you would expect, rules governing conduct. The process will be dictated by the type of entity, the most popular of which among foreign investors in Poland is a Limited Liability Company. Having a registered business address and a bank account in Poland is a must, and from here, registration can begin. The fact that a significant amount of business is conducted in English should help the process.
Taxation again, is broadly similar to ours, with income tax, inheritance and donation tax, agricultural taxes and taxes on vehicles and real estate. Indirect taxes again, are similar, with VAT, gambling and excise taxes applicable.
Situated as it is at the 'heart of Europe' and, with a broadly similar cultural, taxation and business landscape Poland could well be an ideal first step for companies wishing to say 'yes please' (or 'proszÄ?') to branching out East.
Gareth Magee is a partner at Scott-Moncrieff, leading accountants and business advisors, which, through its membership of the Moore Stephens network, helps Scottish businesses realise their international potential.
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