As a rapidly growing economy in Central and Eastern Europe, Poland offers numerous business opportunities for both local and international companies. However, like any other market, doing business in Poland comes with its own set of business risks and challenges. This article will discuss the major risks of doing business in Poland and provide practical tips to navigate them successfully.

Political and regulatory business risks in Poland

Poland’s political landscape has been relatively stable in recent years, but there is always a possibility of unexpected changes affecting businesses. Some of the potential risks include:

  • Changes in Polish government policies and regulations: Changes in government priorities or regulations can impact businesses operating in Poland. For instance, changes in taxation, labor laws, or environmental regulations could affect your company’s operations. In 2023, the Polish president is from a political party different from the leading coalition of the government.

  • EU regulations: As a member of the European Union, Poland is subject to EU laws and regulations. Companies doing business in Poland must comply with these regulations, which can sometimes be complex and costly.

  • Bureaucracy: Although the Polish government has made efforts to reduce red tape, bureaucratic procedures can still be time-consuming and complicated. Make sure to familiarize yourself with the necessary paperwork and requirements to avoid delays and additional costs.

The challenge of political risk extends to the European Commission’s oversight, which can impact regulations in significant sectors, including the Polish energy sector and the broader business environment. Another aspect is corruption perception, which, though less prevalent due to robust corruption prevention measures and stringent corruption laws, still demands attention.

investors must be also aware of the Polish National Bank regulations, which govern monetary policy and have implications on Polish capital market volatility. Additionally, understanding the tax laws in Poland and the efficacy of the tax administration is a prerequisite to ensure compliance and avoid potential legal pitfalls.

Key takeaways:

  • Be aware of the political and regulatory risks in Poland, including new Polish tax regulations and changes in labour law.

  • Stay up-to-date with changes in government policies and EU regulations.

  • Prepare for bureaucratic procedures and requirements.

Economic challenges of doing business in Poland

While Poland’s economy has been growing steadily, there are still economic risks that businesses should consider, including:

  • Currency fluctuations: Poland’s currency, the Polish Zloty (PLN), can be subject to fluctuations against major global currencies such as the Euro or US Dollar. This may impact your company’s financial performance, particularly if your business relies on imports or exports.

  • Inflation: In recent years, Poland has experienced quite high inflation rates. From 2023 the inflation rate is going down, but it’s important to consider this when doing business in Poland.

  • Access to financing: While access to financing has improved in Poland, smaller businesses may still face challenges in securing loans or attracting investors. Be prepared to explore alternative financing options if needed.

Key takeaways:

  • Be aware of the economic risks in Poland, including currency fluctuations, inflation, and access to financing.

  • Develop strategies to manage currency risks and monitor inflation.

  • Consider alternative financing options if necessary.

Polish legal system risks

Navigating the legal landscape in Poland can be challenging for businesses, especially those unfamiliar with Polish law restrictions on business. Some legal risks to consider include:

  • Contract enforcement: Enforcing contracts in Poland may be time-consuming and costly, particularly if legal disputes arise. To mitigate this risk, ensure that your contracts are well-drafted, clear, and enforceable under Polish law.

  • Intellectual property rights (IP) and protection laws: While Poland has made progress in protecting IP rights, enforcement can still be challenging. Register your trademarks, patents, and copyrights in Poland, and be prepared to take legal action to protect your IP assets if necessary.

  • Employment law: Polish employment law can be complex, and non-compliance can result in fines or legal disputes. Familiarize yourself with the local labor regulations, including minimum wage, working hours, and employee benefits. Hiring a top B2B accountant is a must.

Key takeaways:

  • Be aware of the legal risks in Poland, including contract enforcement, IP protection, and employment law.

  • Ensure that your contracts are well-drafted and enforceable under Polish law.

  • Register your IP assets in Poland and familiarize yourself with local employment regulations.

Polish market risks and barriers to running a business

Poland’s market presents unique challenges and risks for businesses, such as:

  • Competition: The Polish market can be highly competitive, with both local and international companies vying for market share. Conduct thorough market research to understand your competitors and identify potential niches where your business can excel.

  • Consumer preferences: Polish consumers may have different preferences and expectations compared to other markets. Make sure to adapt your products or services to meet the specific needs of the local market.

  • Distribution and logistics: Poland’s infrastructure has improved significantly in recent years, but there may still be challenges in terms of distribution and logistics, particularly in rural areas. Consider partnering with local distributors or logistics providers to ensure efficient delivery of your products.

Key takeaways:

  • Be aware of the market risks in Poland. Polish market barriers include a lot of competition, consumer preferences, macro and microeconomic variables and distribution challenges.

  • Conduct thorough market research to understand the local market and identify potential niches.

  • Partner with local distributors or logistics providers to ensure efficient delivery of your products.

Business culture in Poland

Doing business in a foreign country often involves navigating cultural differences that can impact your company’s success. When doing business in Poland, consider the following cultural risks:

  • Language barriers: Although English is widely spoken in Poland, particularly among younger generations, it is essential to be prepared for potential language barriers in business dealings. Consider hiring a local representative or translator to help with communication. Also, check out our piece on: why it’s important to translate software to polish.

  • Business etiquette: Polish business culture may differ from what you are accustomed to in your home country. Be aware of local customs and expectations, such as punctuality, formality, and decision-making processes.

  • Building relationships: In Poland, personal relationships are crucial for successful business dealings. Invest time in building trust and rapport with your Polish counterparts, as this can lead to smoother negotiations and long-lasting partnerships.

Key takeaways:

  • Be aware of the cultural risks in Poland, including language barriers, polish business etiquette, and the importance of personal relationships.

  • Consider hiring a local representative or translator to help with communication.

  • Invest time in building trust and rapport with your Polish counterparts.

While Poland presents a favorable economic landscape, Polish entrepreneurs’ challenges, the complexity of the Polish legal system risks, and the varied business climate call for a judicious approach to establish and grow a business venture. Consistent monitoring and adapting to Poland’s changing environmental, legal, and economic conditions could well position a business for long-term success. There are also multiple economic challenges facing Poland in the coming years, but the business is thriving, and Poland’s GDP is still on an upward trajectory. This is the perfect time to enter the Polish market.

dominikw
Business Development Manager, CEO at | Contact me | + posts

I am dedicated to facilitating your entry into the Polish market. At Architecture of Sales, my team and I are committed to enhancing your visibility and boosting sales in Poland through the following strategies:

  1. Market Validation Activities - We conduct comprehensive market research, analysis, SWOT assessments, competitor evaluations, and direct customer interviews to validate your market approach.
  2. Lead Generation - Utilizing both outbound and inbound methods, including various Sales Development Representative (SDR) prospecting techniques, we generate high-quality leads to drive your sales pipeline.
  3. Sales and Marketing Support - Acting as your local sales and marketing department, we adeptly represent your brand to customers, providing comprehensive support to strengthen your market position.
  4. Business Partner Identification - Whether identifying a local partner or developing an effective affiliate program, we assist in establishing valuable collaborations to optimize your market presence.

While our primary focus is on B2B SaaS companies, we are also open to collaborating with hardware-selling enterprises. For instance, we have successfully sold SaaS solutions, including ERP systems, to diverse sectors such as manufacturing, construction, retail, IT, HR, and EHS management.