Doing business in Poland

Poland is proving increasingly attractive to foreign investors due to its size, stable economic environment and vast untapped potential.

However, there are complexities to consider and companies keen on expanding into Poland should ensure they build a thorough understanding of its economic environment.

Poland, officially known as the Republic of Poland, is a country in Central Europe that extends from the Baltic Sea in the north to the Sudetes and Carpathian Mountains in the south. It is the sixth largest economy in the European Union (EU) and now the fifth most populous member state. The country is comprised of 16 provinces, known as voivodeships.

Poland is a member of the EU, the European Economic Area (EEA), the World Trade Organisation (WTO), the North Atlantic Treaty Organisation (NATO), and the Organisation for Economic Co-operation and Development (OECD).

Fast Facts: Poland

In 2023, Poland had a GDP of US$811.23 billion [World Bank]
Currency – Polish złoty (Sign: zł; Code: PLN)
Language – Polish
GNI per capita – US$19,730 in 2023 [World Bank]
Population – 38.3 million [Worldometer, January 2025]
Capital – Warsaw
Key sectors: manufacturing, telecommunications, transport, construction, industrial food processing, financial services, logistics, tourism, utilities, IT
Key cities: Warsaw, Kraków, Łódź, Wrocław, Poznań, Gdańsk, Szczecin, Bydgoszcz

TMF Group’s Global Business Complexity Index (GBCI) shows Poland is among the top 20 most complex jurisdictions in which to do business, so it is crucial that companies extending their operations into the Polish market first research the rules and regulations impacting its economic landscape.

Advantages of doing business in Poland

There are numerous advantages associated with doing business in Poland. The country has a stable economic environment and an educated workforce rich in economists, engineers, IT specialists and scientists.

Companies can tap into a consumer base that exceeds 38 million people, while the country’s strategic central location in Europe also facilitates the export of goods across the continent, reaching a market of more than 500 million consumers.

Poland has benefitted from shifting global trade patterns. It has positioned itself as a link between Europe and the rest of the world, getting investment from Mainland China, South Korea and US chipmakers, among others. This led Bloomberg to identify Poland as one of the world’s “connector” economies.

The country is seeing increasing inflows of foreign direct investment (FDI), driven by new investment projects in the automotive, electronics and chemical sectors. There are 14 Special Economic Zones (SEZs), which offer tax exemptions, employment incentives and well-prepared investment lots.

Despite the advantages on offer, there are a number of challenges associated with doing business in Poland. Legal documents and contracts often need to be written in Polish, there are occasional concerns about political influences, and companies operating in Poland must comply with both Polish and EU laws.

Companies looking to enter the Polish market should read our article outlining the main challenges to doing business in the country.

Compliance and the regulatory environment in Poland

Companies operating in Poland must comply with a raft of regulations, encompassing tax laws such as VAT registration, consumer protection laws and strict Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. It is worth noting that e-invoicing will become obligatory for enterprises whose annual revenue exceeds PLN200 million from 1 February 2026.

There are also data protection rules to adhere to, as laid out by the General Data Protection Regulation (GDPR), which is the EU law that regulates how personal data is collected and processed across the region.

In Poland, the “Freedom of Business” principle ensures that individuals have the right to pursue any business or economic activity that they choose, unless it is explicitly prohibited by law.

The rationale is to ensure that anyone starting a business in Poland can do so on an equal footing, subject to specific conditions and restrictions, which are dependent on the chosen economic activity. This principle is integrated within the Polish Freedom of Economic Activity Act.

Hiring and employment in Poland

Employment law in Poland is enshrined in the Polish Labour Code, which requires employment contracts to be prepared in writing, specifying the type of contract, start and end dates, terms of employment and remuneration, type of work, place of work and working hours. Employers may also negotiate collective bargaining agreements.

Sweeping changes to Poland’s labour laws in recent years have increased the complexity of doing business in the country. The Polish government has introduced several pieces of payroll-related legislation, including the “Polish Deal”, which overhauled the taxation system for corporations, entrepreneurs, and employees, as well as the way in which salaries are calculated.

When it comes to hiring talent in Poland, the law on the Promotion of Employment and Labour Market Institutions states that an employer may employ a foreign employee, from an EU or non-EU country, after receiving a permit from the voivode (local governor) for employment.

The exact regulation depends on which category a foreign employee fits into. Citizens of countries within the European Economic Area (EEA) are entitled to work in Poland without a work permit. Citizens of Armenia, Belarus, Georgia, Moldova, the Russian Federation or Ukraine may be employed via declaration of entrusting work to a foreigner. Non-EEA citizens will require a work permit, as well as an appropriate visa or residence card, to work in Poland.

The six types of work permits that can be issued to non-EEA citizens

Type A: issued to employees who perform work in Poland based on an employment contract.
Type B: issued to foreigners to work as a member of an entity’s management board for a period of more than six months within the next 12 months. The requirement to obtain a Type B permit includes a company’s non-EEA national corporate proxy or general partner.
Type C: issued to employees who work for a branch office or plant of a foreign company in Poland for more than 30 days.
Type D: for employees sent to Poland for temporary or ad hoc work for a foreign company that does not have a branch office, plant, or business activities in Poland.
Type E: issued to foreign employees sent to Poland to work for a foreign employer for a period of more than 30 days within the next six months.
Type S: a seasonal permit issued for non-EEA nationals working in agriculture, forestry, hunting, fishing, hospitality, and food service for a single period of up to nine months in a calendar year.

Companies expanding into the Polish market will find our article on payroll compliance in Poland a useful read.

The financial and tax environment in Poland

The basic rate of corporate income tax in Poland is 19%, but there is a lower rate of 9% applicable in some circumstances. This includes entities whose sales revenues for the given year were no more than the equivalent of €2 million, and taxpayers who are in their first tax year of business activity. In January 2024, new minimum corporate income tax legislation came into force. This is an obligation that is applicable to taxpayers declaring tax losses or negligible income. The rate of this new tax is 10% of the taxable base.

There are four VAT rates for goods and services in Poland.

The basic rate of 23% is applied to most types of goods and services, except for those that are covered by special VAT provisions that provide other rates or treatments.

A lower rate of 8% is levied on certain goods and services, such as pharmaceutical products, and a rate of 5% is levied on items such as books and magazines. The 0% rate applies to exports and the supply of goods to taxpayers based in other EU countries (upon fulfilling statutory conditions).

Poland has adopted International Financial Reporting Standards (IFRS) accounting practices. The Polish Accounting Act specifies which entities are mandated to use IFRS in financial reporting, and which ones may use IFRS if they wish to do so.

Starting a business in Poland

When it comes to setting up a business in Poland, you will need to register your company with the Polish National Court Register (KRS), which can now be done electronically.

The process involves choosing a business structure, gathering the required documents, and then formally incorporating your new company. Depending on your business type, you may also need to register for VAT and obtain any necessary industry permits or licences.

There are a number of business structures that foreign companies can choose for their operations in Poland. The most common type of company for both domestic and foreign businesses is a limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o. or LLC). An LLC must be registered with the register of entrepreneurs held by the district courts, and must have at least 5,000zł of capital.

It is important to choose the right structure for your specific circumstances when setting up your venture in Poland, so you should first review the available options in order to make an informed choice.

Find out more about doing business in Poland by requesting our in-depth guide.

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