Poland has experienced a remarkable economic boom in recent years. FTSE Russell, which classifies markets based on global benchmarks, promoted Poland to Developed market status this September, citing “continuous improvements in Poland's capital markets infrastructure, supported by the country's steady economic progress.”
Not surprisingly, Poland is an increasingly popular target-country for multinationals looking to expand. Given Poland’s rapid ascent to the ranks of developed economies, however, many multinationals are unfamiliar with the opportunities and challenges it presents.
Kenny Morgan is ideally equipped to talk about these issues, having helped companies expand to and operate in Poland for more than two decades. He is currently Vistra’s director responsible for accounting services and internal financial reporting in the company’s Warsaw office. Vistra — which acquired Radius in May 2018 — is a global market leader in international expansion services, with operations in more than 40 jurisdictions and a global staff of over 4,000.
Prior to joining Vistra in 2008, Kenny was director in the financial services audit department at KPMG Poland, and before that he was audit manager for Ernst and Young Poland. Raised in Ireland, he is a chartered accountant and has a degree from Trinity College Dublin. He answered our questions by email.
How’s your Polish? Is it challenging to get by in Poland’s international business community if you don’t speak the language?
I can speak socially and understand it quite well. English is a given for everyone in the business community in Poland, even though nearly all senior positions in local companies are held by Polish executives. It is a benefit to have knowledge of Polish.
Poland was recently upgraded to “developed market” status by FTSE Russell, the first country to be promoted in almost a decade. What do you see as the primary reasons for the country’s dramatic economic rise?
There are a number of factors for Poland’s steady economic climb. It’s a large market of 39 million people in the center of Europe with a relatively young population and a high number of university graduates. Since joining the EU in 2004, Poland has experienced consistent economic growth, aligned with sound macroeconomic policies during this time. During the financial crisis of 2008-2009, Poland was the only country in the EU not to suffer an economic recession. Its infrastructure network has also improved in recent years.
Have you noticed a significant increase in interest from multinationals looking to expand to Poland?
The large majority of our clients at Vistra are multinationals, and there has been a steady increase in these companies coming to Poland. We’ve also seen existing foreign investors expanding their local operations in recent years.
How have perceptions of Poland as an international-expansion destination changed in recent years?
Poland continues to benefit from positive investor feedback about its talented, well-educated workforce. In addition, Poland is a large market strategically located in the center of Europe with a population whose disposable income is growing.
What are some of the benefits and challenges that come with Poland’s increased popularity as a target destination for multinationals?
The country now has a proven track record of attracting multinationals, which makes it easier for the next wave of companies to choose Poland. As for challenges, the labor market is more competitive than ever, particularly in large urban areas. It is certainly an employee’s market for people with the skillsets that international investors are seeking. To help with the sourcing of talent, Vistra recently opened an office in Lublin, a city in the southeast of the country. The Lublin location is our fifth Vistra International Expansion office in Poland, which says something about the demand for our services in the country.
What kinds of industries are typically attracted to Poland and why?
Due to its highly educated and motivated workforce, industries that struggle to find talent in other geographical areas are now choosing Poland. The technology, engineering and shared services sectors are expanding rapidly. The major export sectors include machinery, electronic equipment, vehicles, furniture and agriculture products.
If you had to give some general advice to a tech or other startup considering expanding to Poland, what would you say?
Do your homework in advance, which should include talking to companies that are already operating here. Choose your geographical location wisely, since Poland is a large country. Also, take time to choose the legal-entity type that will best suit your business model. You’ll almost certainly want to hire an expert familiar with the benefits and drawbacks of each type.
Do your clients tend to send expats or hire locals when expanding to Poland?
In recent years, the trend is to hire locals in Poland because of its skilled workforce.
What’s the most memorable thing someone has said to you about conducting business in Poland?
Our clients often tell us they wish they had expanded to Poland earlier!
In your career, have you noticed a single great truth about how to operate successfully in Poland?
To quote Dorothy in The Wizard of Oz, “Toto, I have a feeling we’re not in Kansas anymore.” Doing business in Poland will be different from doing business in your home country. Compliance activities will be different from what you are familiar with, so work with the system, not against it, and you will have a very successful business here.
The contents of this article are intended for informational purposes only. The article should not be relied on as legal or other professional advice. Neither Vistra Group Holding S.A. nor any of its group companies, subsidiaries or affiliates accept responsibility for any loss occasioned by actions taken or refrained from as a result of reading or otherwise consuming this article. For details, read our Legal and Regulatory notice at: http://www.vistra.com/notices . Copyright © 2022 by Vistra Group Holdings SA. All Rights Reserved.
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