Poland is another Silicon Valley!

Remote work provides much wider opportunities for business development, also abroad. An interesting option to enter a foreign market may be finding co-workers first, not necessarily immediately starting a formal business. Is Poland worth considering when choosing a destination for your business?

Interest in investing in Poland, despite the specific circumstances resulting from both the COVID pandemic and the war in Ukraine, is still very high. This is confirmed by the fDi Markets ranking of foreign direct investment, in which Poland took the 8th position in the world and 4th in the region of European emerging economies [1]. According to this data, Poland is also the world’s third preferred location for foreign investors [2].

IT services market

The Polish labour market is also particularly attractive for companies seeking IT specialists. Poland has been on the global IT map for at least 10 years. Many companies, when planning their Central European expansion, choose our country, emphasizing the availability of highly qualified staff, the approach to work, business conditions, market opportunities and costs of doing business. It is worth noting that in Poland, although IT specialists earn an average of nearly PLN 19,000 per month gross (approx. USD 50,000 / EUR 48,000 per year) and are - apart from the management staff - the best paid employees, their salary is still almost three times lower than in the USA! [3]  It should, therefore, not be surprising that Polish IT professionals receive more and more offers of remote work from non-Polish businesses, often from the USA. Different time zones might seem to be a challenge but not necessarily - deliverables usually do not need to be provided on a real time basis. Remote working in many areas has now become a standard. Employers are also satisfied with the efficiency of employees in the remote system.

Market potential in business services

Another promising investment area worth noting is the broadly defined business services industry (BSS). The modern business services sector in Poland has been developing dynamically since the mid-1990s, experiencing rapid growth in the first and second decades of the 21st century. Average annual headcount growth was between 15 and 20 percent in recent years. The sector includes in-house shared service centers, business processing centers serving mainly external customers, IT centers and research and development centers (including software development centers / digital hubs). It is noteworthy that the BSS industry in Poland is developing towards taking on more and more complex business processes.

Poland is a regional leader - both in terms of the total number of centers and total employment in the industry. There are more than 1,300 centers across the country (accounting for about 70 percent of all BSS centers in Central and Eastern Europe), and total employment has exceeded 300,000 people (giving almost 50 percent of the total number of industry employees in this part of Europe)[4].

According to market forecasts, the number of employees in the sector in Poland will grow linearly. The

development of the industry is possible thanks to, on the one hand, better availability of experienced employees than in other countries - business leaders, employees who know many foreign languages -, and, on the other hand, the continuous inflow of university graduates into the labour market. Foreigners, who are often employed in BPO, SSC, CBC, IT and R&D centers, also have a significant impact on the development of the BSS industry. The strengths of the Polish labour market are also the still low wage costs compared to countries in the region, as well as high work culture focused on efficiency. Also key in locating shared service centers in our country is Poland's strategic location in Europe, favourable investment climate, economic stability, attractive time zone and cultural proximity, development of modern business-related infrastructure, steadily improving quality of life in Polish cities, and an investor-friendly business support ecosystem.

The best time to invest in Poland

During the 2023 World Economic Forum Annual Meeting in Davos, it was emphasized that international business is now moving away from globalization and turning to regionalization [5]. Foreign investors increasingly localize their business in Poland and/or increasingly seek collaborators on our market. The factors that encourage starting a business in Poland include: 

• the market of competent employees, including those coming from other countries (Ukraine, Belarus, Spain, India, Uzbekistan, Turkey) – according to the data of the Ministry of Family and Social Policy, more than 2.3 million different types of work permits have been issued to foreign nationals in 2022;
  
• tax preferences, including for IT industry (employment contract with 50% tax-deductible costs, B+R relief, B2B cooperation, relief for innovative employees);
• transformation of the labour market, particularly in terms of making models more flexible to B2B contracts;
• the prevalence of remote work and its popularity in Poland (in January 2023, remote work was regulated in the Labour Code);
• competitive remuneration systems compared to Western European countries or the USA;
• a rich range of incentives for investors (e.g. Special Economic Zones).