Regional Nature of Market and Review of Major Regions

Opportunities for doing business in Poland are, like the population, dispersed throughout the country. Forty percent of the population resides in rural areas; urban dwellers are widely spread among a number of population centers.

Poland’s largest cities and their respective populations are: 

Source: Chief Statistical Office (GUS) Poland 

Industrial Goods Distribution 

Imports of equipment and technology have remained steady as Polish industry modernizes and restructures to compete with the West. Poles are familiar with the technical parameters of U.S. products, even prior to the actual introduction of those products in the marketplace. This reflects the fact that serious Polish importers do their homework.

With its location in the center of Europe and its membership in the EU, Poland is seen as a good location for a distribution hub in Central and Eastern Europe. Another good reason is that prices in Poland are still lower than in many other EU countries.

Many distributors of industrial equipment are specialized and have very specific technical expertise. Because of this, some are better able to represent foreign manufactures on a national level than most consumer good distributors. However, exporters should be aware that large industrial enterprises would rather have direct contact with manufacturers when purchasing heavy machinery. This is one of the reasons why the number of heavy machinery distributors is limited in Poland.

As with the consumer goods sector, importers and other companies that represent foreign companies are becoming more sophisticated and selective. The number and variety of imported goods available on the Polish market plays an important role here as well. Polish agents or distributors increasingly look to foreign partners to provide marketing and promotional support, training, and financing. Polish trade fairs, which have become more specific in scope, are a good place to look for possible distributors.

It is advisable to consider having one exclusive distributor. Potential channel partners in this sector tend to prefer exclusive arrangements because often they bear the marketing cost of new products and do not want potential competitors to reap the benefits of their promotional activities.

Using an Agent or Distributor

Polish trade partners most often serve their U.S. counterparts as distributors. They import goods, clear the shipments through customs, and then offer them on the local market. Their network of contacts in the industry is highly leveraged when offering products on the market. One of the most common tools for distributors to use is the internet, where goods are advertised and increasingly also sold through e-commerce.

Signing an agent agreement with a Polish entity allows the agent to act as a representative for the foreign company in Poland. Agents have the authority to manage the company’s activities in the country and often also to act as distributors. In most cases, product and marketing training must be provided to new distributors. There are no local laws imposing rules specifically for Polish importers. Distributor and agent agreements may take any form mutually beneficial to the parties involved.

A good starting point for finding a distributor or an agent is to review websites, such as the KOMPAS database, which contains information on many local businesses. Visiting trade fairs in Poland is a good way to identify local businesses and to meet with potential partners. Exhibitor catalogs published by trade fairs usually include brief descriptions of each participant.

The U.S. Commercial Service provides individualized market entry services, such as the International Partner Search (IPS) and our signature service, the Gold Key Service (GKS), to introduce you to and facilitate meetings with potential partners in the market. Our specialists have a broad knowledge base of the most popular market sectors and can help save U.S. businesses time and money when identifying and screening potential distributors or agents. Contact office.warsaw@trade.gov for more information.

Companies entering distribution, franchising, and agency arrangements need to ensure that the agreements are established in accordance with EU laws and Poland’s national laws. EU Council Directive 86/653/EEC establishes minimum standards of protection for self-employed commercial agents who sell or purchase goods on behalf of their principals. The Directive establishes the rights and obligations of the principal and its agents, the agent’s remuneration, and the conclusion and termination of an agency contract. It also establishes the notice to be given and indemnity or compensation to be paid to the agent. U.S. companies should be particularly aware that according to the Directive, parties may not derogate from certain requirements.  Accordingly, the inclusion of a clause specifying an alternate body of law to be applied in the event of a dispute will likely be ruled invalid by European courts.  

The European Commission’s Directorate General for Competition enforces legislation concerned with the effects on competition in the internal market of “vertical agreements.” U.S. small- and medium-sized companies (SMEs) are often exempt from these regulations because their agreements likely would qualify as “agreements of minor importance,” meaning they are considered incapable of impacting competition at the EU level but useful for cooperation between SMEs. Companies with fewer than 250 employees and an annual turnover of less than €50 million are considered SMEs. The EU has additionally indicated that agreements that affect less than 10% of a particular market are generally exempted (Commission Notice 2014/C 291/01).

The EU also looks to limit payment delays, through directive 2011/7/EU, which covers all commercial transactions within the EU, whether in the public or private sector, primarily dealing with the consequences of late payment. Transactions with consumers, however, do not fall within the scope of this Directive. Directive 2011/7/EU entitles a seller who does not receive payment for goods and/or services within 30 days of the payment deadline, to collect interest (at a rate of eight percent above the European Central Bank rate) as well as €40 to compensate for recovery costs. For business-to-business transactions, a 60-day period may be negotiated and are subject to conditions. The seller may also retain the title to goods until payment is completed and may claim full compensation for all recovery costs.

Companies’ agents and distributors can take advantage of the European Ombudsman when victim of inefficient management by an EU institution or body.  Complaints can be made to the European Ombudsman only by businesses and other bodies with registered offices in the EU. The Ombudsman can act upon these complaints by investigating cases in which EU institutions fail to act in accordance with the law, fail to respect the principles of good administration, or violate fundamental rights. In addition, SOLVIT, a network of national centers, offers online assistance to citizens and businesses who encounter problems with transactions within the borders of the single market.  

Establishing an Office 

Establishing an office in Europe, whether a subsidiary or a new business, requires knowledge of the relevant national legislation in the country of interest. While there are many of EU level policies in effect, many key areas such as taxation are still largely a prerogative of each member state.

The European Commission manages the Your Europe website where investors can find useful information on various topics ranging from taxation and customs to employment contracts.

The type of business entity that U.S. companies choose to establish is often determined by the scope of activities the company plans to undertake in Poland. If a U.S. company wants to sell its products and services in Poland exclusively through its own office, it usually establishes a representative office. If a U.S. company plans to invest in Poland, there are different legal forms available to carry out business activity. Investors may choose the most suitable one from the following options for their business presence in Poland: 

(1) Limited Partnership

 (2) Limited Joint-Stock Partnership

 (3) Limited Liability Companies (Sp. z o.o.)

 (4) Joint Stock Companies (S.A.)

 (5) Representative Office

 (6) Branch Office

Detailed information on forms of doing business in Poland can be found at the Polish Investment and Trade Agency webpage.

Modern office equipment like computers and office amenities are easily available and can be leased from a variety of reputable Polish and Western firms. The white-collar labor pool is abundant and English-speaking assistants with good office skills are relatively easy to find as are employees with Western management and accounting experience.  Many executive search firms operate in Poland and aid in finding appropriate staff.

The State Department’s Investment Climate Statements includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees.

Franchising

The Polish franchise market is considered mature, yet it continues to grow. Local entrepreneurs are aware of the plethora of potential choices that enable them to make discerning decisions regarding future franchise opportunities. According to the private franchising consulting company PROFIT System, in 2023 the Polish franchising sector encompassed 1,350 independent franchise networks, 87,000 franchisees operating, and approximately 100,000 contracts between franchising partners in Poland. Over half million franchisees and franchisors operate in Poland. The franchise market is dominated by Polish companies. Domestic brands represent 80% of franchises, operating 85% franchise units. Franchising is one of the fastest growing options for small, private firms.

Several franchising sectors suffered during the pandemic, including gastronomy, retail, service outlets located in shopping centers, fitness, beauty services, and many others. On the other hand, online food and groceries delivery such as GrubHub (in Poland – Pyszne.pl) and Uber Eats, and local meal kit services akin to Blue Apron have experienced unprecedented growth.

The 2022 Russian invasion of Ukraine has also influenced market stability, prices of goods, fuels, and utilities in Poland. All businesses, including those operating in the franchising sector, limited their operations due to price increase and disruption of transport and logistics. However, recent data from the Polish Franchising Organization show that franchising companies are growing slowly, but progressively, despite the challenging circumstances in Poland during past several years. Franchising is viewed as relatively stable and good business for tough times.

Gastronomy is the largest franchising sector with over 204 brands (mainly ice-cream, candy shops and cafes). Leading brands include:

• McDonald’s (over 500 restaurants, including 466 franchised at the end of 2022).
• Subway – over 220 locations.
• KFC – over 230 locations.
• Pizza Hut – over 120 locations, including 14 franchised points (as of April 1, 2023).
• Burger King – over 80 locations.

In addition, U.S. consulting/business services that are active in Poland include Signarama, Mail Boxes Etc., RE/MAX, Keller Williams, Circle K, and Orange Theory Fitness. Recently educational concepts are becoming more popular.

Strong competition and an increasing number of franchise systems have strengthened the position of potential franchisees. Successful franchisors offer franchisees programs for customer service (CRM), product training, merchandising, etc., and often contribute to recruitment campaigns and investment cost-sharing.

American franchisers should be willing to raise brand awareness by committing sufficient resources to advertising and marketing, especially for brands without global recognition. U.S. franchisers should be prepared to modify their product mix or implement other changes in their marketing policy to compete and meet the demands of Polish consumers. Franchise networks successful in the United States will not automatically succeed in Poland. However, well-known U.S. franchises operating in the United States or Europe have a strong advantage.

U.S. franchisers often have difficulty identifying local investors willing to provide sufficient capital to develop a Polish franchise. To overcome this challenge, firms often create a master franchise that can attract foreign and domestic investors. This practice is especially prevalent in the gastronomy sector. Besides multi-unit franchising, direct franchising is one of the most popular franchise models in Poland.

Operating a business in Poland requires registration. If a foreign franchisor is thinking of entering the Polish market on a permanent, on-site basis, a limited liability company (“sp zoo”) is the most common structure adopted by foreign (as well as domestic) franchisors. This corporate form requires a minimum amount of capital investment (PLN 5,000) and offers limited liability, so that only the company’s assets are liable to creditors, with a few exceptions. Moreover, a limited liability company offers more flexibility regarding internal structure and procedures. Apart from this, there are generally no additional strict regulations on starting a business in Poland. Poland has no special legal regulations for franchises, although the government raises the need to regulate this sector and the industry itself continues working on the Code of Good Practice in the franchise. Franchise agreements are regulated by the Polish Civil Code. However, a bill updating the Polish Civil Code and industrial property law was passed by the Ministry of Justice to the Prime Minister Chancellery for further analyses; however, the process is prolonging, with no deadline for passing of the regulations having been established yet.

Franchisors should take steps to protect their intellectual property in accordance with Polish and European Union regulations. As in most markets, trademark registration is limited to protecting only trademarks registered in Poland. Registration at the European Union level protects trademarks in Poland and all member states. Sub-franchising is permitted without restrictions. Poland and the United States have signed a double taxation agreement. The franchise fee is subject to a 23% value-added tax (VAT) and corporate income tax (CIT) on the difference between franchising income and tax- deductible expenses. If a foreign franchisor considers establishing more permanent operations in Poland, non-EU companies must establish a branch or subsidiary company to do business in Poland.

U.S. businesses looking to franchise within the European Union will likely find the market is generally quite robust and welcoming to franchise concepts. There are several laws that govern the operation of franchises within the EU, but such laws are broad and generally do not constrain the competitive position of U.S. businesses. The potential franchiser should review the applicable EU regulations at the web-site of the European Franchise Federation, as well as local laws in Poland governed by the Polish Franchise Organization (POF).

The Polish Franchise Expo is the largest franchising trade show in Central and Eastern Europe. Over 150 exhibitors and 7,000 visitors attended the show in 2021.

Direct Marketing

Direct marketing (DM) is an accepted business practice in Poland, as it is in other EU countries.  Polish consumers are accustomed to purchasing via catalog as well to shopping online. The most frequently used DM formats are email and internet marking, telemarketing, direct sales, mailing sales (products available in catalogs and internet), TV marketing, and inserts in publications with a response element. Local companies care about proper profiling, audience targeting, and know that a well-prepared email campaign will achieve a high conversion rate. Communicating with consumers through a social media (e.g., Instagram, Facebook, Twitter) is also widely used.

In general, Polish law is compatible with legal regulations applied to DM activities throughout the EU. Direct Sales are governed by the Consumer Rights Directive that entered into force since June 13, 2014. Polish protection of personal data is rigorous, although recent interpretations in court have been less strict. A good source of information is the Office of Competition and Consumer Protection (UOKIK).

The SMB Polish Marketing Association, established in 1995, and PSSB-Polish Direct Marketing Association established in 1989, are both involved in introducing regulations and principles for DM in Poland. SMB promotes development of direct marketing per existing law and professional ethics.

There is a wide range of EU legislation that impact consumers. Companies should focus on the clarity and completeness of the information they provide to consumers prior to purchase and on their approaches to collecting and using customer data. The following gives a brief overview of the most important provisions flowing from EU-wide rules on distance-selling and online commerce.

Direct Marketing over the Internet  

The e-commerce directive imposes certain specific requirements connected to the direct marketing business. Promotional offers must not mislead customers and the terms that must be met to qualify for them should be easily accessible and clear. The directive stipulates that marketing emails must be identified as such to the recipient and requires that companies targeting customers online must regularly consult national opt-out registers where they exist. When an order is placed, the service provider must acknowledge receipt quickly and by electronic means, although the directive does not attribute any legal effect to the placing of an order or its acknowledgment. This is a matter for national law. Vendors of electronically supplied services (such as software, which the EU considers a service and not a good) must also collect value added tax (see Electronic Commerce section below).

Resources - Local Associations in Poland 

• Polish Marketing Association   
• Polish Direct Marketing Association
• SELDIA – The European Direct Selling Association 
• FEDMA – Federation of European Data and Marketing

Joint Ventures/Licensing

Joint ventures are a common form of doing business in Poland. Many U.S. businesses in Poland have established joint ventures with Polish partner companies. Joint ventures are an excellent way to facilitate export sales to the Polish market.

Most joint ventures are established with the American partner contributing needed capital and technology. The Polish partner typically contributes land, distribution channels, trained workers, access to the Polish market, and introductions within the local government and business community. Having a Polish partner who is familiar with the industry and culture gives American firms a competitive edge. American firms participating in joint ventures are often asked to provide marketing, training, and promotional support for their Polish partners.

Licensing products, technology, technical data, and services has been less common in Poland, due to concerns about protecting intellectual property rights and copyrights. We suggest U.S. businesses be cautious when licensing their products in Poland.  For more information, please see the chapter on Protecting Intellectual Property.

Express Delivery

All major express delivery firms (e.g., DHL, UPS, and FedEx) provide services in Poland, both for inbound and outbound shipments. Reliable domestic express delivery firms include DPD Poland, GLS, and InPost. Be sure to check their coverage areas and declared guaranteed delivery time prior to enlisting their service.

Due Diligence

Product safety testing and certification is mandatory for the EU market. U.S. manufacturers and sellers of goods must perform due diligence in accordance with mandatory EU legislation prior to exporting their products to Europe.

The U.S. Commercial Service in Warsaw can provide U.S. companies with quick and affordable background checks on Polish business organizations through our International Company Profile Service. For more information on this service, please contact the U.S. Commercial Service in Warsaw at office.warsaw@trade.gov or call us at +48 22 625-4374.