Poland is ranked second in Europe and tenth in the world – its worst ever result – when it comes to the complexity of doing business, according to the latest edition of a ranking that analyses rules and requirements in 77 countries around the world.
The country has risen 24 places since last year in the Global Business Complexity Index (GBCI). The report’s authors cite confusion over fast-changing legislation as a result of the coronavirus pandemic, the need for official translations, and problems with digitisation.
The GBCI, produced by TMF Group, a multinational company providing professional services to international businesses, examines 292 indicators relating to legislation, compliance, accounting, tax, human resources and payroll procedures in countries representing 71% of the world’s population and 92% of its GDP.
The index for 2021 ranks Brazil, France and Mexico as the first, second and third most complex territories in the world in which to do business. Poland’s tenth place puts it just behind Bolivia and Costa Rica and ahead of South Korea. Denmark is the least complex jurisdiction in the ranking, followed by Hong Kong and the Cayman Islands.
“Poland’s worst result in history in terms of ease of doing business results from frequent changes in the law, little transparency regarding the rules of its application and a smaller package of conveniences for foreign investors than in other countries,” said Joanna Romańczuk, TMF’s general manager for Poland and Ukraine.
“The pandemic situation also didn’t help, but we need to remember that all countries were struggling with a difficult situation in this time, and unfortunately we did not come out well in comparison,” she added, quoted by Money.pl.
“Legislation in Poland often changes quickly, leaving businesses little time to react and implement changes in accordance with new laws,” reads the report. “This has been exacerbated during the pandemic, which has brought about quick responses on the government’s part to a fast-moving situation.”
There has therefore been confusion over which laws apply, as lockdown restrictions have been introduced and removed at short notice while longer-term changes such as economic relief have remained in place, the report states.
It also notes that official documentation in Poland must be “submitted in the local language, sworn translated, or accompanied by an apostille certificate”, and that the implications of recently introduced laws such as a scheme allowing employees to invest part of their salary in shares and bonds, have been unclear for foreign companies.
Poland's Supreme Court has overturned fines issued for violating coronavirus restrictions, with human rights commissioner @Adbodnar saying they "grossly violated the law".
It is the latest in a series of court rulings challenging the legality of lockdown https://t.co/4WlYOMqKHe
— Notes from Poland 🇵🇱 (@notesfrompoland) March 18, 2021
Finally, the report cites the continuing digitisation process in Poland. Although companies are now required to submit financial statements electronically, Polish authorities do not accept many internationally accepted signature providers, which increases complexity, TMF Group warns.
A report by the United Nations Conference on Trade and Development (UNCTAD) published in June ranked Poland fifth globally in terms of the value of greenfield projects – meaning completely new foreign investments.
Last year, Poland was the third biggest destination for investment coming into Europe, with $21.8 billion, according to a report by fDi Intelligence, behind only the United Kingdom and Russia.
Main image credit: Photo by Dimitry Anikin/Unsplash
Ben Koschalka is a translator and senior editor at Notes from Poland. Originally from Britain, he has lived in Kraków since 2005.
