In conditions of the free market

Since the early 1990s Poland's economy is developing in conditions of a free market, based on the freedom of economic activity of any entity, guaranteed by the Constitution of the Republic of Poland of April 2, 1997 and other legislative acts. As a member of the European Union, Poland implements principles based on the four pillars of the European market - the freedom of movement of goods, services, capital and people between EU member states.

Poland takes the 24th place in the Doing Business 2017 World Bank ranking, which is one position higher than in 2016.

In the past 25 years, Poland has become a country attractive to foreign investors. During this period, foreign direct investment in the Polish economy amounted to more than 713 billion Polish zlotys. Investors are not afraid to invest in Poland, which is an economically and politically stable country.

Forms of doing business in Poland are close to those adopted in other European countries.

The most common ones are:

1.    individual entrepreneurial activity of an individual;
2.    trading companies, among which stand out:

•    companies (full company, partnership, limited partnership, limited joint-stock company);
•    joint-stock company (limited liability company and joint-stock company);

1.    department of a foreign entrepreneur;
2.    Representation of a foreign entrepreneur.

In Poland, the binding principle of freedom of economic activity applies. This means that everyone has an equal right to conduct economic activity of their choice. However, this principle is not absolute, since the following restrictions are of primary importance:

•    subjective (relating to who can conduct economic activity);
•    objective (relating to the conditions that must be met to conduct this activity).

Recent amendments to the legislation governing the employment of foreigners in the Republic of Poland are aimed at opening up a labor market for foreigners. This is primarily the expansion of the circle of people who can work without permission, as well as the simplification of the procedure for obtaining work permits for citizens of countries that are not members of the EU.

The main regulatory act governing the work of foreigners in the territory of the Republic of Poland is the Law of December 12, 2013 “On Foreigners”. In accordance with it, the so-called unified procedure for obtaining a temporary residence permit for work in Poland is carried out. This means that foreigners within the same procedure have the opportunity to obtain a single permit for both stay and work.

A work permit is issued for a specific time, but not more than three years, and can be extended.

The purchase by a foreigner of a right of ownership or the right of perpetual use of real estate, as well as the purchase by a foreigner of shares or stocks in trading companies on the territory of Poland or the acquisition of ownership by them, require the permission of the Minister of Internal Affairs.

This principle does not apply to citizens and entrepreneurs who are located or have an office in the European Economic Area.

The main normative legal act regulating the mutual rights and obligations of the parties to labor relations is the Labor Code of June 26, 1974. In addition, the rights and obligations of the employer and employee are governed by the existing provisions of other laws, orders, and (within certain enterprises) resolutions of collective agreements and labor regulations, as well as wage regulations.

The main form of employment of employees is an employment contract. There are three types of employment contracts: for a trial period, for an indefinite time and for a specific time. A subtype of an employment contract for a specific time is a replacement contract concluded for the period of absence of a full-time employee.

The minimum wage in Poland in 2017 is 2,000 zlotys (about 470 euros) gross (i.e., before the payment of assessed contributions and tax). Social insurance contributions are paid by the employee and employer in installments. If the employee has a minimum wage, then after paying contributions and tax he will actually receive about 1,460 zlotys. Contributions that additionally burden the employer are 412.2 zlotys (about 100 euros).

According to the report of Paying Taxes 2017, Poland ranks 47th in the world in terms of the complexity of the tax system. Compared to 2016, Poland rose by 11 positions. In the same rating, Belarus ranks 99th.

Taxes in Poland are divided into direct and indirect. The most important direct taxes include:

•    personal income tax (PIT);
•    corporate income tax (CIT);
•    civil action tax (PCC).

Indirect taxes include:

•    tax on goods and services (VAT);
•    excise tax.

Poland and Belarus signed the Double Taxation Avoidance Treaty of November 18, 1992. This document regulates those situations that could lead to double taxation of income tax in both countries.

The judicial power in Poland is exercised by: the Supreme Court, the courts of general jurisdiction, administrative courts and military courts.

The general judicial system is three-stage and consists of regional, district courts and appeal courts. Judicial proceedings are at least two-instance, that is, decisions made by a court of first instance can be appealed to a higher court (for example, decisions of a regional court can be appealed to a district court, or a district court to an appeal court). Courts of general jurisdiction issue decisions in criminal and civil cases, in cases in the field of labor, economic and family law. The Supreme Court is a court that conducts supervisory review of decisions that have entered into legal force in particularly complex cases with a high cost of the subject of the dispute.

The initiation of a civil case is related to the payment of a fee, usually due to the value of the subject of the dispute and amounting to 5% of this value (not more than 100,000 zlotys). In some cases, including registry, the fee is fixed (for example, the state fee for registration of a company is 500 zlotys).

Read the full version of the article in the magazine Market conditions. Published issues of the journal can be purchased in the editorial office.