Poland is generally politically stable. However, power struggles within the governing coalition - Conservative PiS, together with two smaller right-wing allies – Porozumienie (Accord) and United Poland (Solidarna Polska, SP) -are undermining government stability. The nationalist Law and Justice (PiS) party won another majority in parliament in the October 2019 elections and President Andrzej Duda (formally independent, but closely aligned with PiS) was re-elected in July 2020, ensuring broad political and policy continuity. The Prime Minister, Mateusz Morawiecki (PiS), formally leads the government. In practice, policymaking and government appointments are strongly influenced by PiS leader and Deputy Prime Minister Jaroslaw Kaczynski- who holds significant power over the government and policymaking, and remains the country’s de facto leader and has so far managed to hold the coalition government together. However, disagreements over his eventual successor are likely to threaten government stability over the coming years.

Attempts to curtail judicial institutions, the public media and civil society have sparked public opposition and led to tensions with the EU. Overall, social and political polarisation will continue to grow, as evidenced by Duda’s narrow victory in the presidential poll. The government continues to welcome foreign investment, but the scope for state intervention and regulatory changes with negative implications for businesses has increased. However,  PiS’s nationalist policy agenda has translated into a growing state presence and intervention in strategic sectors, increasing political threats for foreign investors. Poland has enjoyed greater macroeconomic stability than other countries in Central and Eastern Europe, and was among the few EU member states to avoid recession after 2009. However, the COVID-19 pandemic as affected the economic outlook of the country. Its GDP contracted by 3.6% in 2020, according to the IMF, signalling Poland’s first recession in nearly three decades.

Poland was among the first countries to unilaterally close its borders to curb the spread of COVID-19, without coordinating with the rest of Europe, resulting in significant operational delays. The government since March 2020 has imposed various measures aimed at preventing the spread of the virus, including business closures and restrictions on entry to the country. Businesses can expect significant operational disruptions, as well as relative uncertainty associated to the pandemic, in 2021. After experiencing another peak in the number of infection in early-March, COVID-19 projections forecast a decreasing trend from now onwards (IHME). During this year, Poland´s GDP is expected to grow by 2.7%, according to the IMF.

The government’s handling of the pandemic has sparked criticism and – given the Law and Justice (PiS) administration’s tendency to strongly cater to key voter groups – is likely to negatively impact political cohesion. Further, the crisis will significantly strain public finances.

Successive governments have been unable to enact the structural reforms needed to consolidate positive macroeconomic trends. For example, regional income inequality remains high. The PiS government has pledged to overcome the underlying macroeconomic issues through more efficient allocation of public spending and better redistribution of available public finances. It has started implementing reforms to improve the business environment and has allocated significant funds to infrastructure development, which are likely to gradually yield results. However, although the operating environment is improving, excessive bureaucracy, an inefficient legal system and underdeveloped infrastructure continue to pose operational threats to businesses Crime poses the main security threat to businesses, albeit a relatively minor one. Far-right groups have increased their activities and presence since 2016, following a broader nationalist shift in politics.

The government continues to welcome foreign investment, but the scope for state intervention and regulatory changes with negative implications for businesses has increased. Meanwhile, policies supporting domestic business and industry will remain a priority for the government, particularly amid the COVID-19 pandemic.

Poland is a parliamentary democracy. It has a bicameral parliament that comprises the 460-seat Sejm (lower house), elected by proportional representation, and the 100-seat Senat (upper house), elected in a first-past-the-post system involving regional constituencies. Each parliamentary term lasts four years. Executive power is exercised by the government, which consists of a council of ministers led by the prime minister. The president is elected by direct vote for a five-year term. The presidency is a prestigious but mostly representative role, though the president has the right to initiate and veto legislation and has a key role in appointing top posts in judicial, diplomatic and military institutions. The role of the president in foreign policy and national defence is a subject of debate, since it overlaps with responsibilities of the government.

The government has embarked on a generous social and welfare agenda and an expansive development programme. These reforms will likely remain a staple of PiS’s agenda, though the adverse economic effects of the COVID-19 pandemic will likely complicate such reforms and strain public finances. Meanwhile, PiS’s conservative agenda has sparked opposition among urban and more liberal voters, increasing political polarisation. Although broader political stability is assured, PiS may shift towards a more nationalist and statist economic policy agenda, seeking to expand the influence of domestic companies and state-owned entities in the market.

Poland’s de facto leader, Jaroslaw Kaczynski, is expected to retire within the next few years. Minister of Justice Zbigniew Ziobro – leader of junior coalition partner United Poland (Solidarna Polska, SP) – and Prime Minister Mateusz Morawiecki (PiS) are the most likely candidates to replace Kaczynski. Although Marowiecki is Kaczynski’s preferred successor, Ziobro has aggressively positioned himself for the role – leading to a power struggle that in September 2020 almost collapsed the government.

PiS efforts to consolidate executive control over judicial institutions, public media, security services and state-owned companies have raised concerns over the erosion of democratic checks and balances both domestically and in the EU. They highlight persistent politicisation of the state administration and state-owned companies in Poland. They also underpin divisions within the moderate and more hawkish factions of PiS. The EU has launched four infringement procedures against Poland since 2017 over the controversial judicial reforms pursued by the PiS government, of which two resulted in the European Court of Justice (ECJ) declaring that Poland’s reforms violated EU law. Government officials will continue to publicly challenge the EU and tensions will persist over the next two years. 

Accession to the EU in 2004 further improved external and regional relations. Poland has no territorial disputes with neighbouring states. However, occasional diplomatic tensions have characterised its relations with neighbouring Germany and Russia, which some conservative political representatives continue to regard as the country's historical enemies. Successive governments since 2004 have aligned the country’s legal and regulatory framework with EU standards and have maintained broadly market-friendly policies. With less local capital than its Western European peers, Poland is particularly dependent on foreign investment. As such, foreign investment is and will remain a priority. However, various PiS MPs have floated the prospect of reducing foreign ownership in Poland. Supporting domestic capital and businesses – particularly in strategic sectors such as energy, banking and defence – are key elements of the government’s policy agenda. Contract risks increased after the Law and Justice (PiS) party came to power in 2015. They are likely to remain elevated in the coming years – particularly in those sectors considered to be strategically important.

There have been significant improvements in countering both high-level and petty corruption in recent decades, but corruption is a persistent concern for businesses operating in Poland. Public tenders, especially at the local level, are prone to manipulation and distortion of competition, as well as direct demands for bribes. Common problems include tailoring of selection criteria for certain companies, lack of transparency in evaluation of bids, collusive bidding and conflicts of interest of officials involved in tendering processes. 

Poland is considered a Flawed Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 57 out of 167 countries scored.

The country ranks 35 at the 2020 Human Development Index developed by the United Nations Development Programme.

The operating environment is improving, but excessive bureaucracy, an inefficient legal system, and underdeveloped infrastructure pose operational risks to businesses. Poland was also among the first countries to unilaterally close its border to curb the spread of COVID-19, without coordinating with the rest of Europe and resulting in significant operational delays at border checks. In the face of the second wave of cases, similar actions are likely. The PiS government has started implementing reforms to improve the business environment and has allocated significant funds to infrastructure development, which are likely to gradually yield results. 

Underdeveloped transport infrastructure and inefficient and cumbersome administrative, legal and bureaucratic procedures are the primary drivers of operational risks. Moreover, petty and high-level corruption has gradually declined in recent years, reflecting improvements in anti-corruption enforcement. However, companies could face demands for bribes or other forms of opaque practices when dealing with public authorities or engaging in public tenders.

The business environment benefits from a well-educated and skilled workforce, a qualified and cheap labour forcé, but – as elsewhere in the region – labour and skills shortages are a problem. Overall, shortages are likely to decrease as a result of a significant rise in unemployment owing to the COVID-19 pandemic. However, sectors that rely on migrant labour – including construction – will experience further shortages as many migrants have returned home owing to the pandemic. Successive wage hikes by the government to bridge the gap between Poland and Western Europe have driven up the labour cost, but this is likely to stagnate – at least temporarily – amid COVID-19. Another driver of rising labour costs is competition for workforce between companies, notably in construction, customer services, IT, finances and accounting, and law.  Foreign labour remains politically contentious. Labour unions have been less active in recent years, but unions can engage in periodic strikes and demonstrations, mainly in state-controlled enterprises and the public sector

Although successive governments have aligned the legislative and regulatory environment with EU standards, the implementation and enforcement of this legislation can be inconsistent. Poor administrative and institutional capabilities in the judicial and law-enforcement agencies compound these lingering problems.

Relatively poor transport infrastructure remains a challenge for businesses, despite the wide availability of EU funds and significant investments in transport infrastructure in recent years. Railway services have long suffered from low levels of investment, and regularly experience delays and disruption. Although Poland has the third-largest railway system in Europe by line length, railway density is one of the lowest in the region. The Law and Justice (PiS) government has initiated several projects to improve both rail and road infrastructure, and infrastructure investment is a key element of the government’s long-term economic development plan. Improvements of transport infrastructure, particularly in the less developed eastern parts of the country, are seen as critical to attract investment and strengthen interconnection to neighbouring countries.

The poor state of some roads, in combination with the often-risky driving habits of locals and an abundance of tractor-trailers, often leads to serious road accidents; 3026 people died from such incidents in 2016. Drivers are urged to remain vigilant; it may be preferable to travel by train in winter months due to hazardous road conditions caused by ice and snow.

Visitors are also advised to take only officially-sanctioned taxis with a company name and/or telephone number printed on the light bar. Public transportation is generally reliable and safe. Individuals must have a valid ticket before boarding a bus or a train.

Overall, Poland ranks 40 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 45 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

Companies in Poland face few serious security threats. Crime is the most pressing issue for companies, albeit a relatively minor one. However, while the number of recorded criminal offences has declined significantly in the past decade, economic crimes have increased. Acquisitive crime in 2021 could further increase as economic hardship grows following the outbreak of the COVID-19 pandemic in the first half of 2020. Economic crimes – including tax, credit and excise fraud and money laundering – tend to be perpetrated by groups with ties to politics and business. There are concerns regarding links between organised criminal groups and seemingly legitimate security providers. In fact, organised criminal groups, present in the country, take advantage of Poland’s geographic position as a transit country between east and west. While such groups generally pose a low security threat to large foreign businesses, they have increasingly engaged in more sophisticated criminal activity, such as economic crimes and illicit trade. 

The threat of terrorism is lower than in Western European countries. Poland has a lower profile as a target and does not host transnational or domestic terrorist groups capable of carrying out mass casualty attacks. Far-right extremist groups have become more active and visible in recent years and can conduct small-scale attacks. 

Public protests are normally peaceful, though the ongoing increase in political and social polarisation could increase both the frequency and intensity of protests in the coming years.

The adoption of new rules for the judiciary – alongside other perceived infringements of independent institutions – prompted regular mass anti-government protests in the capital Warsaw and other major cities in 2016-19. Anti-government protests and demonstrations against specific policy measures – particularly those seen as infringing civil rights – can attract significant participation. A court ruling in October 2020 that opened the door for an almost complete ban on abortions saw hundreds of thousands of protesters take to the streets across the country.

Overall, Poland ranks 29 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

Poland is not currently among the most cyber-attacked countries in the world.  According to the Kaspersky cyber threat map, the country ranks as the 17 most cyberattacked.

No vaccinations are required to enter the country.

Poland ranks 32 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

The warm half of the year is the most exposed season for natural hazards in Poland. Some of the greatest meteorological threats in Poland include exceptionally heavy or low precipitation, strong winds, violent maritime storms, extreme temperatures. The frequency of occurrence of torrential rainfalls has considerably increased over recent decades. Consequently, increased numbers of local urban floods have been observed.

If you plan to visit Poland, stay informed by the Poland Disaster Management .