The complex economic and socio-political processes that Ukraine is experiencing have certainly had a negative impact on the state of Ukrainian business. In the conditions of quarantine and deepening crisis phenomena in the economy, a significant part of Ukrainian enterprises (mostly small and medium-sized businesses) are forced to reconsider their further strategy of their activities or to stop such activities altogether. Therefore, some companies embark on the path of maximum optimization of costs, reducing the volume of their activities, while others are looking for new sales markets and more stable conditions for entrepreneurship.
In this context, a promising direction for further development for Ukrainian companies is the establishment and conduct of business in the European Union.
Among the EU countries, the most optimal for creating a business by Ukrainian companies, today, is the Republic of Poland.
Poland’s advantages in this context are due to many factors, of which, in our opinion, ten key ones should be highlighted:
1. Dynamics of economic development.
The Polish economy is the most stable compared to other EU countries. Poland holds leading positions in Central and Eastern Europe in terms of bilateral trade, GDP growth, and a stable economy.
Thus, according to the international Doing Business 2020 ranking, Poland ranks 40th in terms of ease of doing business, Ukraine ranks 64th, Slovakia ranks 29th, the Czech Republic ranks 41st, and Hungary ranks 52nd.
2.The advantages of Poland’s geographical location should be considered in two aspects.
On the one hand, Poland has an ideal transit and logistics location. It is a kind of “connecting link” between the countries of Western and Eastern Europe. Therefore, a significant amount of cargo flows pass through the territory of Poland, which in turn opens up a wide range of directions for doing business.
On the other hand, Poland also has a favorable geographical location in relation to our country, which allows Ukrainians to successfully combine entrepreneurial activity in both Ukraine and Poland.
3. Simplified procedure for starting a business.
In order to simplify the process of creating a business as much as possible, Polish legislation provides opportunities for creating companies not only in a short time, but also without the obligatory presence of the founders in Poland.
It is significant that, for example, the minimum amount of the authorized capital of the most popular organizational and legal form of business – a limited liability company – is only 5,000 zł. In turn, the legislation does not establish the obligation to deposit these funds into the company’s account.
In addition, there are no other additional conditions for registering a business, such as: purchasing real estate, renting an office, mandatory attraction of employees with Polish citizenship, etc.
At the same time, according to Polish legislation, an enterprise founded and managed by foreign citizens has absolutely the same rights as other business entities in Poland.
4. Tax system.
The Republic of Poland is characterized by one of the most optimal levels of taxation among other European Union countries. For example, the income tax in Poland is 19%. At the same time, in Germany it is 30%, in Estonia it is 21%, in Hungary it is 20.6%.
At the same time, the legislation provides ample opportunities for attributing certain expenses incurred to the company’s expenses. Particular attention should also be paid to VAT, which is 23% and is returned to the payer’s account “in cash” within the period specified by law.
5. The cost of maintaining a company.
Entering foreign markets at the initial stages is usually associated with the need to invest funds in business development. Under such conditions, an important task is to optimize expenses as much as possible, in particular the part that goes to maintaining the company.
In this context, Poland also has significant advantages. At the initial stages, monthly costs for maintaining a company can be from 600 zł., which includes the cost of renting an address for registering the company, a basic package of services of an accountant and lawyer, etc.
6. Loyal state policy on business control.
Thanks to the state policy of debureaucratization of the licensing system, licensed activities in Poland are currently reduced to a minimum, and the requirements for each of them are quite simple and unambiguous.
The probability of fiscal authorities conducting inspections of newly established companies during the first three years of operation is minimal. An exception may be the case when a newly established company initiates the return of significant amounts of VAT.
7. Loans, banking system, EU subsidies.
One of the key advantages of doing business in the EU is undoubtedly the possibility of access to inexpensive European loans. Poland in this context is no exception.
By registering a company and having a certain turnover reflected in its accounting, you will be able to obtain a loan for your business on terms that are qualitatively different from those offered by domestic banks.
In addition, your money will be stored in reliable banks. Bank deposits of individuals and legal entities in Poland are guaranteed by a specially created fund, up to 40,000.00 euros.
It should be noted that in some cases, Polish companies have the opportunity to take advantage of special EU business grant programs. These programs, as a rule, consist in financing projects implemented by an entrepreneur.
8. Real estate cost.
Despite the dynamics of its development, Poland still remains one of the most inexpensive EU countries. In turn, according to experts, real estate in Poland remains undervalued today and will continue to trend towards gradual price increases. Under such conditions, investments in Polish real estate are quite profitable in the medium and long term.
9. Linguistic and mental similarity of Ukrainians and Poles.
Historically, there have been close cultural and linguistic ties between Ukraine and Poland. Therefore, even without speaking Polish, in a fairly short time in a Polish-speaking environment, you will be able to communicate normally with your Polish employees and contractors. What cannot be guaranteed when doing business in other European countries.
10. Poland is part of the single European Union.
Since Poland is a member of the EU, companies registered on its territory have every opportunity to freely trade goods, works or services not only within the Polish market (which is about 38 million consumers), but also within the EU market as a whole (the volume of which is about 550 million consumers).
The above list of advantages is not exhaustive. Without a doubt, the entry of any business into a new market is necessarily associated with certain risks. However, conducting business activities within the framework of the Polish legal system makes it possible to take such risks into account and minimize them as much as possible.
