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The Warsaw Voice » Other » March 12, 2008
GERMANY IN POLAND
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Smoothing the Bumps
March 12, 2008   
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Lars Bosse, general manager of the Polish-German Chamber of Industry and Commerce, talks to Ewa Hancock.

Is the Polish market still attractive to German investors?
Poland continues to enjoy quite a good standing in many league tables in terms of competitiveness and attractiveness for investment. This is despite certain staff shortages, rising salaries and the still considerable amount of red tape. Of course, one shouldn't expect that German companies will be coming here in droves because the biggest ones-such as Metro, Volkswagen, RWE, Siemens, Deutsche Bank, Commerzbank, Pfleiderer, and Allianz-are already here. Foreign direct investment statistics kept by the Polish Information and Foreign Investment Agency (PAIiIZ) and the National Bank of Poland (NBP) do not take into account small and medium-sized companies that invest smaller amounts of money in Poland. The NBP's official statistics for 2006 include no more than 2,700 or so big German companies. To that you should add numerous investment projects by German SMEs that are interested in the Polish market-if not the entire market then regional or cross-border markets. After the admission of new member states to the European Union, the biggest investors such as Daimler have been increasingly facing the dilemma of whether they should drop an anchor in Poland or perhaps in Romania, which is cheaper. But that is a different scale of decision making, typical for multinational corporations.

What are the main complaints of German companies operating in Poland?
That depends on what the company does. In general, German investors complain about barriers to doing business in Poland in general, such as inflexible labor regulations, no value-added tax (VAT) refunds in certain types of business dealings and insufficient information on EU funds available to companies active in Poland. We find out about these problems as we carry out our lobbying activities. Our aim is to be the voice of both German and Polish businesspeople in contacts with politicians, and to provide a platform for such contacts, for example, by organizing regular meetings with politicians. Recent examples have included a meeting with Deputy Prime Minister and Economy Minister Waldemar Pawlak. Companies' suggestions for politicians are bringing about concrete results. For example, we have collected proposals from member companies related to barriers to business posed by labor law. These proposals will be sent to the Labor Ministry, and perhaps there will also be a meeting with ministry officials. We have organized a meeting for companies interested in talking shop with officials from the Ministry of Infrastructure, and we are preparing for a meeting with Ministry of Regional Development officials to talk about European Union funding. The list goes on and on.

What kind of legal and tax assistance do German investors need in Poland?
This is shown by the queries submitted to the chamber by member companies. For a few years, we have seen the development of a service based on the recovery of VAT paid in Poland by German companies operating here. Every year we assist some 160 foreign businesses, mainly German companies, but a dozen or so applications are submitted by businesses from other EU countries. To an extent, the service has grown owing to the Polish administration, which has been processing the applications faster and more efficiently for the past 18 months or so. We also hope that we will manage to attract Polish companies interested in recovering VAT paid in Germany and other EU member states. Polish entrepreneurs may find it useful to know that the chamber offers this service as part of an international network of bilateral German chambers of commerce called DEinternational, so we can help any Polish company interested in VAT recovery in any EU country. In the case of the German market, we provide the service on our own, while in other EU countries we use the assistance of bilateral German chambers of commerce in individual EU states.

In legal matters we sometimes help companies-not only German, but also Polish businesses with links to German capital-settle business disputes at commercial courts of arbitration. There are still few such cases, but entrepreneurs increasingly come to the conclusion that such procedures offer substantial savings of both time and money.

What kind of market advisory services do German entrepreneurs seek most often?
Most of the services provided by the chamber in this area involve searching for business partners and advice related to launching operations in Poland. That means, for example, choosing the right form of operations adapted to the client's needs-such as a representative office, a subsidiary, and so on-and the possibility of arranging for the client the procedures related to founding a business. This includes obtaining the NIP tax identification number and the REGON statistical number. Also, personnel recruitment for German companies in Poland is quite a popular service. We have been providing this service for some seven to eight years and it makes up around 20 percent of all our orders for market advisory services. Our clients include many medium-sized German technology companies, for example companies selling machines and equipment and those interested in launching operations in, say, Silesia, Mazovia or Wielkopolska.

Occasionally, we also provide market research for big investors considering greenfield investment in Poland. However, such companies usually use the services of consulting firms and agencies like the Polish Information and Foreign Investment Agency.
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