German companies are increasingly eager to invest in Poland

Central and Eastern Europe are becoming an increasingly attractive destination for German businesses, with Poland standing out as the most popular location in the region. According to a survey conducted by KPMG and the German Eastern Business Association between November 20 and December 31, 2024, 22% of German companies plan to relocate their production to this part of Europe, with as many as 51% choosing Poland as their preferred destination. What makes Poland so appealing to German companies, and what factors influence their investment decisions?

Poland as the regional investment leader

Poland, being the largest economy in Central and Eastern Europe, has long enjoyed the trust of foreign investors. The survey results confirm that more than half (51%) of German companies consider Poland their primary investment target in the region, followed by Romania (43%) and Ukraine (41%).

Poland’s advantage is driven not only by its geographical proximity and market familiarity but also by its well-established position in international supply chains. German companies with years of experience in Poland appreciate the country’s economic stability and its well-developed business infrastructure.

Key factors driving production relocation to Poland

Relocating operations to Poland is a strategic decision based on several key factors. According to the survey, the most significant aspects influencing these decisions include:

• High market demand (40%) – Poland is one of the largest consumer markets in Central and Eastern Europe, making it an attractive location for companies seeking new sales opportunities.
• Availability of skilled labor (37%) – Poland offers a broad base of specialists across various sectors, including manufacturing, IT, and business services.
• Relatively low labor costs (33%) – Although labor costs in Poland have been gradually rising, they remain competitive compared to Germany and the rest of Western Europe.

Benefits of investing in Poland

German companies view Poland as a stable and promising location for their investments. Geographical proximity and Poland’s membership in the European Union provide predictable business conditions and simplify logistics. The country’s transportation infrastructure, comprising a network of expressways, highways, and access to seaports, ensures efficient distribution of goods both locally and internationally.

Another advantage is the growing number of programs designed to support foreign investments. Companies can benefit from tax incentives, administrative assistance, and advisory services when setting up their operations.

Risks and challenges for German companies entering the Polish market

Despite the optimistic outlook, German companies recognize certain potential risks. The most frequently mentioned concerns include:

• Political risk (67%) – Concerns related to the geopolitical situation in the region, particularly in the context of the conflict in Ukraine.
• Corruption (38%) – While Poland has steadily improved its position in international transparency rankings, this issue remains a concern for investors.
• Bureaucracy (31%) – Foreign entrepreneurs, in particular, continue to encounter difficulties related to administrative procedures.

Although these risks may cause some concerns, the right support can significantly minimize the challenges of starting a business in Poland. getsix® offers one of the most comprehensive and professional company registration services available, catering to both foreign investors and Polish entrepreneurs. Our team of experts will guide you through the entire company formation process while providing full accounting, HR and payroll services, as well as legal and tax advisory. With our extensive experience and knowledge of local regulations, we help businesses grow safely and efficiently in Poland. We invite you to contact us to learn more about our services.

The future of investments in Poland

According to the survey, 42% of German companies plan to invest in Central and Eastern Europe already within the next year, while 56% intend to do so within five years. As the largest economy in the region, Poland is poised to maintain its leading position in attracting foreign capital.

The anticipated economic recovery and ongoing infrastructure development support the positive outlook. Additionally, Poland’s growing role in European supply chains and the availability of modern technological solutions make the country an attractive partner for international investors.

Conclusion

Poland remains a key destination for German companies planning to relocate production to Central and Eastern Europe. A stable economy, access to a skilled workforce, and favorable investment conditions are the primary factors attracting businesses from across the border. Despite the challenges posed by bureaucracy and political risks, German companies remain optimistic about their future in Poland. The coming years may see further growth in investment interest, strengthening Poland’s position within the European economy.

You can read the official summary of the survey results prepared by KPMG and the German Eastern Business Association here.

If you have any further questions or require additional information, please contact your business relationship person or use the enquiry form on the HLB Poland website.

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