So why then is the business climate here still hostile to entrepreneurs?
In fact, individuals are finding it so difficult to trade in Poland that the leading employers' organization has drawn up a hit list of obstacles that form major barriers to businesses here.
The list makes for daunting, if somewhat familiar, reading. Bureaucracy and the seemingly arbitrary interpretations of the taxman are identified as the biggest foes of a successful operation, according to the Polish Confederation of Private Employers (PKPP).
The group, which represents major companies across the country, worryingly concludes that it is "not optimistic" about an immediate resolution to difficulties it highlights in its 'Black List of Barriers' survey, the second it has conducted. The PKPP report does, however, reveal that a large number of previously identified 'stonewall' rules have been removed. Yet some remain and a host of new problems have emerged, following recent legislation.
However, now is not a good time for sounding the alarm. Its expert Jeremi Mordasewicz admits: "Election year is not a good period for changes," with politicians concentrating on their election campaigns, rather than amending the law.
Different rules
And there is a lot that needs amending, apparently. While the Confederation compliments last year's introduction of a flat tax rate for companies, the complicated VAT bill has attracted its ire.
"It's not even about the rate [mostly 22 percent], it's the unclear and complicated rules of applying it in practice," says Mordasewicz. The outcome of unclear laws is that one can pay differently in different parts of the country, as every tax office is its own judge.
The problem, it seems, is not with individuals. "It's not that a particular officer acts in bad will," says Henryk Orfinger, the president of the supervisory board at cosmetic company Dr Irena Eris, "but he needs to proceed according to rules set in his office." His firm operates nationwide and receives different tax decisions originating from the same rules.
EU structural funds are also proving to be an area of concern, with many business people wary of how the authorities are allocating the funds. Poland did surprisingly well in showing how it intends to use the money from Brussels on paper, but this year will see the theory put into practice. Entrepreneurs are worried that the flow of funds could become dammed up with bureaucratic obstacles, as they were not involved in planning this part of the process.
Fear the taxman
PKPP, it seems, is not alone in its dissent. Other organizations confirm the complaints to a large extent, and add some of their own. The interpretation of the social-benefits system and VAT levels are the cause of "constant fear" for CEO of the Java Coffee company, Glen Gregory. His general advice is to: "Make it simple and smaller." He supports the idea of one flat income-tax rate and more liberal rules for "removing non-performing employees." PKPP also criticizes labor laws, claiming the new, reformed labor code failed to address the most important issues, and interferes excessively with companies' employment policies.
"Every new employee means huge additional costs," says co-owner of book distributing firm Platon, Paweł Filar. In fact, Polish labor-force costs are estimated at one-fifth of those in France, but entrepreneurs would like to see this fall. They say that these figures remain one of the country's main attractions for foreign investment.
Eris' Orfinger adds banks to the business-obstruction list. "Theoretically, a renowned company like ours should be treated as a good client," he says, detailing how bank representatives frequently come calling at Eris' door. Their enthusiasm changes, however, if one mentions loan prospects, and the shutters come down.
Understanding business
It may seem that criticism prevails perennially in Poland and, as the CEO of the British Polish Chamber of Commerce, Martin Oxley, puts it, "one of the national hobbies is to complain." But for a decade-and-a-half he managed various business projects in CEE countries and sees constant improvement.
"Things have moved at an incredible rate over the last 15 years-there were no retail parks in 1990, for instance." According to Oxley, one should remember that Poland moved from a market economy to EU membership in 15 years. Glen Gregory, who also set up businesses just after the fall of communism, sees the transformation. In the early 1990s "under the table" business was pervasive, even when applying for a telephone number. The ways of doing business experienced a 180-degree shift. Only the "awful roads" seem to withstand any efforts for improvement.
The authorities might be hard to get along with, but eventually the bureaucratic machine produces results. Paweł Filar of Platon Distribution claims his company didn't have major problems. Martin Oxley enjoyed positive relations with the Polish administration and says that understanding local customs and practices can do wonders for one's effectiveness. The bottom line is Polish authorities need investors to survive, so, says Oxley: "It is in their interest to understand the needs of business."
Business vs. people?
Some media and business circles dramatize the situation and announce Polish companies fleeing east or south in search of friendly administration and low taxes with glee. However, the phenomenon is most likely on a smaller scale than some believe it to be.
"There are talks about moving out of the country [among entrepreneurs], but it is a long way from talk to action," says Orfinger. Mordasewicz's judgment is similar. As he points out, only companies producing low-processed goods consider this option. In the case of Dr Irena Eris SA for example, only one-third of employees are involved directly in production. The remaining 200 are designers, laboratory workers and marketers that would be difficult to replace with equally qualified and experienced staff.
In the end, the crucial factor for reforms to proceed is the public saying yes to them. Laws regulating social benefits or healthcare always attract much attention and by now no group is willing or understands the necessity of resigning from hard-won privileges. Experts claim, however, that much good could be done with smaller scale reforms that don't have a major impact on society.
Błażej Karwowski
Źródło:
