Doing Business Index Analysis: Poland vs. Ukraine

The next economy we are analyzing in terms of doing business easiness is Poland since this country has been viewed amidst the main IT outsourcing destinations of the Eastern Europe. Earlier in our Blog we also compared Poland with Ukraine in terms of their IT outsourcing sectors.

The next economy we are analyzing in terms of doing business easiness is Poland since this country has been viewed amidst the main IT outsourcing destinations of the Eastern Europe. The Ease of Doing Business Index established by the World Bank comprises of the following indicators: starting a business, dealing with construction permit, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing insolvency; however, considering IT outsourcing industry namely, many components are not taken into account, since, the given sector of global economy is the one that makes borders vanish allowing doing business online. Yet, many IT outsourcing destinations are viewed as open markets through a country’s general state of the economy, whereas only a country with a certain set of qualities may bring up a reliable industry.

Ease of Doing Business Index

According to the World Bank reports, Polish economy has risen a lot after the country joined the EU in 2004. The general Ease of Doing Business Index ranks Poland 25th in the global rating. We would like to analyze and summarize the main advantages of the country, its economic state as well as compare it with the Ukrainian.

Poland has become a perfect example of how a country may grow and develop the economy within comparatively short period of time – it took over two decades to establish a well-functioning government and system that soon allowed the country to join the EU and became an important player in the political arena of the Union.

To conduct a business the following items should be taken into account when starting a business or cooperation with foreign partners, however, which business model suits the best is up to you:

  • Starting a business in Poland is viewed as one of the easiest issues since it requires only 4 procedures amounting to up to 30 days (in Ukraine this number may reach 20-25 days, in Bulgaria – 18 days);
  • Dealing with construction permit, getting electricity supply and registering property might take up to 1 year with almost 30 different procedures;
  • Such aspects as getting credit, protecting minority investors, and resolving insolvency are most often

However, for those businesses working as IT outsourcing services vendors, such aspects as doesn’t matter, since, in such case you work with the already existing teams and buy services not open own office

Main legislative requirements

Polish legislation base is following the main EU requirements, and in terms of working schedule and rest, off-days is somehow similar to the Ukrainian:

  • Fixed-term contracts aren’t prohibited for permanent jobs
  • Fixed-term contracts don’t have any time limit; therefore it can be long lasting
  • Minimum monthly wages - $545
  • Incentives provided for employing <25 aged employees
  • Max working days a week – 5,5 days
  • 20% of an hourly pay over the salary for night shifts, 50% premium for working weekly rest day
  • Overtime work payment – 50%+ to the salary from an hourly rate
  • Poland legislation doesn’t envisage restrictions on night works as well as there are no restrictions on overtime work
  • 22 working days of the paid annual leave
  • Maximum probationary period – 3 months
  • Dismissals due to redundancy are allowed by the law

Poland vs. Ukraine: opinios

Ukraine and Poland used to be compared in terms of political and economic situation, however, starting from 2002 Poland has made significant steps towards Europe by eliminating corrupted officials and implementing laws to boost economic growth. Businesses in Poland may only face numerous procedures for registration or arrangement of the documents, whilst in Ukraine, there’s a serious threat of facing lots of red tapes and high corruption level. Many clients don’t consider Ukraine as their outsourcing destination owing to the current political situation, but the business environment is improving. As it has already been mentioned before, Ukraine’s IT sector is expanding and many global companies cooperate with local companies. Of course, the presence of the vast number of world’s largest tech giants and their offices in Poland is a huge advantage of the country and opens more opportunities for business development. Ukrainian and Polish companies also cooperate, especially within IT industry, therefore, there’s an exchange of specialists which is beneficial for vanishing cultural borders, though.

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