What you need to know about placing contractors in Poland
Michelle Reilly, managing director at CXC Global EMEA
Poland is home to a particularly strong economy that’s grown in recent years to the stage where it’s now a highly attractive location for contractors to operate. In fact, the nation’s financial base grew at its fastest rate for four years in 2015, nearly twice as fast as the average in The European Union. But what’s driving this growth and what do agencies placing contractors here need to keep in mind?
The Polish economy is now worth approximately $425 billion and is officially classified as ‘high-income’ by the World Bank. But if this wasn’t enough, the finance ministry predicts a 3.8% growth rate in 2016 which they later expect to climb to between 5% and 5.5%. While some commentators disagree with the perhaps overly optimistic findings, there seems to be no doubt that Poland is a country on the up.
One factor behind this is the nature of the domestic economy. Poland has a highly diversified market largely made up of high-performing SMEs, rather than larger multi-national corporations. The services sector is the main driver, but a number of others including agriculture, mining, industrial and pharmaceuticals all heavily contribute and regularly seek the services of overseas specialists.
The IT sector has also grown a huge amount in recent years as more Western economies have pushed their services centres here to take advantage of cheaper business rates. In Krakow alone there are 102 major global firms including the likes of Google, Samsung and IBM and in January 2016 the IT and business process outsourcing sectors in the city took on an incredible 7,000 new employees combined. In fact, the state of play is so optimistic in Krakow that the ASPIRE Headcount revealed that firms in these areas take on 21 new employees every single day.
In terms of taxation and employment legislation, Poland offers an attractive package for contractors. There’s a relatively low flat rate of tax at 19% and social security payments are effectively capped at 33%. This may seem quite high but keep in mind that this is against a ceiling of around £19,000 so the country is actually a potentially lucrative place to work. Indeed, this works out to paying the equivalent of around €200 in social security per month, which is relatively cheap when compared to other popular European contracting hotspots. In addition, EU nationals obviously won’t require a visa, although it is advisable to encourage them to register as self-employed, as there’s a requirement that a contractor has a permanent address in the location they’re conducting business, which can’t be a hotel.
All in all, Poland’s expanding and diversified economy means the country is becoming an increasingly popular location for specialist contractors looking to work overseas and the agencies that place them. However, it’s still easy to fall into traps when registering talent to work on foreign shores and it’s therefore worthwhile partnering with a specialist that knows international employment markets inside out.