Warsaw, 24^th April 2019

The Union of Entrepreneurs and Employers presents a substantive education system reform proposal to the Social Dialogue Council

In the face of recent discussions and negotiations centred around the teachers’ strike, conducted among others amongst social partners whose representatives sit on the Social Dialogue Council, the Union of Entrepreneurs and Employers reminds the public opinion of its publication under the title “School for life. Who will pay for our pensions?”. Since the Union perceives the education system as one of the key elements of the future of the state and the economy, we prepared a comprehensive program of reforms aimed at bringing pupils and parents back to their central role in the system.

“Sole discussions about pay issues themselves, or even more so about the formula of debeta about education, seem to be completely unproductive” emphasises Cezary Kaźmierczak, the Union’s President. “That is why we came up with the proposal that our document be the starting point for the debate between the authorities in power and their social partners.”

The education system reform program as proposed by the Union of Entrepreneurs and Employers assumes a thorough reform of the financing model and of the functioning of schools. The document stresses that the “money follows the pupil” principle is not being implemented at the moment, which significantly hinders the introduction of competition mechanisms between schools. The system of awarding educational subsidies is complicated and does not reward the best institutions, and the freedom of financial management of schools is significantly limited by rigid remuneration of teachers set out in the Teachers’ Charter. The Union postulates the liquidation of this harmful law and removing the cap on teachers’ salaries, so that the best can earn much more than they do at the moment. Schools, according to the Union, should be managed by special not-for-profit companies with their own budgets and supervisory boards, which should include representatives of parents, teachers, the local community as well as local entrepreneurs. This way, schools will be able to compete for pupils with each other. According to the Union, it is the lack of competition that led to such a pathological situation in the Polish education system.

“We believe that teachers rightly claim that they earn too little, but their postulates themselves are not right” says Cezary Kaźmierczak. “The point is not to put a different amount of money in the Teachers’ Charter. Even if we do that, the problem will come back to us anew in a few years. The idea is to liquidate the Charter and thoroughly reform the system, so that all teachers can negotiate their terms of employment independently.”

Therefore, in line with the project of the Union of Entrepreneurs and Employers, real supervision over education is transferred to local communities and parents. We believe that these groups together with pupils should be at the centre of the system – not government officials. Only when institutions compete with each other for pupils, the best teachers will be rewarded too.

The report “School for life. Who will pay for our pensions?” was presented to the partners sitting in the Social Dialogue Council as a starting point for further debate on the education system in Poland. The Union of Entrepreneurs and Employers expects a substantive debate regarding the postulates presented in this document, and not subsequent tests of strength taking place at the expense of Polish pupils.

 

Agenda Poland: School for life. Who will pay for our pensions?  

 

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4^th April 2019

High non-wage labour costs, high taxes, and excessive bureaucratic obligations – according to entrepreneurs these are the biggest barriers to running business in Poland

High non-wage labour costs, high taxes, and excessive bureaucratic obligations – these are the obstacles considered most harmful for running a company in Poland. These are the conclusions from a survey conducted by Maison & Partners on behalf of the Union of Entrepreneurs and Employers.

It ought to be emphasised that the survey beginning with this edition is carried out on a different business base (previously the database of the Union of Entrepreneurs and Employers, presently of the Ariadna National Research Panel). The sample structure in terms of the size of the companies surveyed in this measurement and the previous ones does not differ, but the demographic structure of respondents has changed considerably. This change may be to a large extent the effect of methodological modification and not of actual differences in the perception of barriers in recent years by Polish entrepreneurs.

The Union of Entrepreneurs and Employers once again asked entrepreneurs from the SME sector about the biggest obstacles for business activity in Poland. In the catalogue of the largest barriers, one can find the following:

Maison & Partners for the Union of Entrepreneurs and Employers, January 2019, N: 733, survey conducted among a group of the SME sector companies representative in terms of workforce size (up to 250 employees).

The most commonplace barriers are a much bigger problem for microenterprises than companies with a larger workforce, as well as for enterprises from the services sector than those from trade and production.

Entrepreneurs arranged the above barriers, pointing out those they considered most challenging in terms of running a business. On the TOP2 barriers list, there are high taxes (57%) and labour costs (52%).

According to the presented data, 88% of respondents consider unclear legal provisions as a definitely essential barrier to the development of enterprises in Poland. Subsequently, administrative requirements (87% of respondents) and lack of financial resources (86% of respondents) are considered equally harmful in this respect.

“It is indeed worrying that the catalogue of barriers to conducting business, which entrepreneurs consider the most challenging, is basically not changing,” claims Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers. “From the very beginning, the most annoying factors in view of entrepreneurs are the tax system, labour costs, bureaucracy and a complicated, unstable regulatory environment. And we must remember that micro-entrepreneurs experience these problems much more intensively than larger entities. We have published countless reports and positions on each of these topics and we see some changes going in the right direction, but it is still too little and too slow.”

64% of people asked about the most important reasons for not employing more people in small- and medium-sized enterprises pointed to the lack of financial resources, for example, too high employment costs.

Too low profits caused by the lack of financial resources are also a major obstacle for small- and medium-sized enterprises to invest their capital. As many as 48% of respondents say so.

Lack of financial resources is also perceived as the biggest obstacle at the start – almost half of Polish entrepreneurs (47%) believe that the lack of money is the main barrier to starting their own business.

Due to the fact that the above-mentioned lack of financial resources is considered by entrepreneurs to be the greatest obstacle to starting their own business, it is the state’s financial aid according to entrepreneurs (53%) that could encourage them to establishment their own businesses. Another important incentive would be an extended payment period of the preferential social security premium according to 43% of respondents.

“I would recommend the government to have a good look at this study instead of inventing ‘entrepreneur’s tests’ and limiting the possibility of making use of the flat tax rate when self-employed. Improving the business environment will serve everyone and I can guarantee that the state budget would quickly feel the results thereof,” concludes Cezary Kaźmierczak.

 

04.04.2019 Survey by the Union of Entrepreneurs and Employers: Barriers to running business activity in Poland

 

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Warsaw, 2^nd April 2019

Most opponents of the trade ban… in small towns and among people who work… in trade

The Maison&Partners research house carried out yet another wave of the survey commissioned by the Union of Entrepreneurs and Employers concerning the attitudes of the Polish people towards the Sunday trade ban. The general conclusions from this wave’s results remain the same as those based on previous editions of the study. Restrictions have the highest number of opponents among residents of small towns, as well as among people working presently or in the past in the trade sector.

In the latest wave of the survey, one can observe a certain increase in the percentage of respondents positively assessing the solutions from 2018, that is two trade Sundays a month. People declaring that they are assessing these regulations rather or definitely positively constitute 45% of respondents. In November 2018, there were 43% of them which means an increase of two percentage points.

“We can clearly see that people, recognising how burdensome the regulations already in force are and how annoying the total trade ban might be beginning in 2020, more favourably evaluate what was last year and that’s two trade Sundays a month,” claims Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “This is not at all surprising. In view of the most restrictive regulations that are to come into force next year, those softer restrictions look much more rational.”

The percentage of people who in any way support the solutions in force in 2019 amounts to 37% and is four percentage points lower than in the first wave of the survey, which was carried out in November 2018. The same is true of the percentage of supporters of next year’s regulations: the ban on trade on all Sundays. It comes to 32% of respondents, while in November 2018 that was 35% of respondents.

The less critical evaluation of the 2018 solutions is reflected in the number of opponents of any restrictions on trade, which has decreased somewhat. At the same time, the percentage of opponents of regulations in force in 2019 and planned for 2020 remains the same: roughly half of Poles are against these solutions. The number of supporters of the Sunday trade ban also dropped – from 31% in November 2018, to 26% in the current edition.

“As for the structure of the group of opponents of the Sunday trade ban, the trends remain unchanged,” emphasizes prof. Dominika Maison. “We still see that the percentage of people critical of the enforced regulations is higher among residents of small towns and among people working in commerce. We have noticed this since the first wave of the survey and nothing has changed in this respect in the latest edition.”

What is interesting is that the March measurement shows once again a decline in the percentage of people who consider the Sunday trade ban as one of the two best decisions of the current government. This regulation is increasingly perceived as negative in the light of other actions undertaken by the Law and Justice government.

 

02.04.2019 Survey by the Union of Entrepreneurs and Employers: Attitudes and opinions regarding the restrictions on Sunday trade – wave 4

 

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Warsaw, 19^th March 2019

 

Almost 60% of entrepreneurs against the Sunday trade ban – the most opponents among micro-enterprises

Maison & Partners carried out a survey among companies of the SME sector commissioned by the Union of Entrepreneurs and Employers analysing the impact of the Sunday trade ban on the economy.

Entrepreneurs from the SME sector are strongly divided concerning possible solutions regarding Sunday trade. Every fifth respondent supports the introduction of a total ban, equally many consider the most appropriate solution the introduction of two free Sundays a month for every employee, while almost 40% are in favour of no restrictions at all. Microbusinesses are the strongest supporters of lack of restrictions – this option was chosen by 43% of respondents from this group.

It is symptomatic that micro-enterprises are also the group that assesses the effects of the regulations introduced to limit trade on Sundays worst. Only 38% of them believe that the trade sector has not suffered from the restrictions, and exactly 40% say that the regulations have not achieved any positive effect, that is, they hit the industry hard and the employees have not been benefitted from them.

“We can clearly see here a correlation that could have been easily predicted. While larger companies somehow deal with the ban and therefore mildly evaluate its results, micro-enterprises more radically point out the negative effects of this law,” claims Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers. “We can also see that the effects of restrictions are very much criticised by representatives of the service industry, of which 66% believe that the trade sector suffered as a result of the entry into force of these regulations.”

The results of the assessment of the impact of restrictions on the situation of small stores are interesting. According to over 60% of respondents, the restrictions negatively impact the smallest entities. Interestingly, the highest percentage of respondents indicating that the situation of small stores has deteriorated is among entrepreneurs from the commercial sector (64% against 61% of respondents from the services sector and 56% from the production sector).

“We see that the highest percentage strongly agreeing with the claim that trade restrictions have a negative impact on the situation of small stores can be noticed among medium-sized and large entrepreneurs as well as micro-entrepreneurs: 35% and 34% of them, respectively,” comments prof. Dominika Maison. “At the same time, the percentage of entrepreneurs definitely disagreeing with this statement is similar everywhere and amounts to 13%-14%.”

The study shows that the SME sector generally does not support the proposals to tighten trade restrictions through, among others, a proposal to clarify the concept of a post office. As many as 55% of respondents are against this idea. The highest percentage of respondents who are against tightening the law is among micro-entrepreneurs, of which as many as 61% do not support it, 36% of whom do not support it very firmly.

“This research is another one of our publications on the impact of these harmful regulations on the economy and the situation of small businesses. We have already proven that the society does not accept increasingly restrictive regulations. In our reports, we presented statistics showing the negative effects of the trade ban. Now, the time has come for the views of entrepreneurs from the SME sector on this issue. Also in their opinion, the trade sector has suffered from the new laws. We hope that this is a sufficient signal to the government, which will persuade the cabinet to repeal this law,” sums up Cezary Kaźmierczak.

 

19.03.2019 Survey by the Union of Entrepreneurs and Employers: Entrepreneurs against Sunday trade ban

 

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Warsaw, 18^th March 2019

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE PROJECT DATED 5^th MARCH 2019 OF A ONE-OFF MONETARY BENEFIT FOR RETIREES AND PENSIONERS IN 2019

During the convention that took place at the end of February, the ruling party presented several new programme postulates, which then started to be collectively called “Kaczyński’s five”. These proposals boil down to transfers addressed to precisely selected social groups, of a social nature attractive from the point of view of the upcoming elections. These groups are: families with children, young people, people living outside larger urban centres, the elderly. We view the package of proposals presented during that convention as definitely negative. In our opinion, it does not contain any postulates constituting a stimulus for development. We see it rather as an attempt at a simple political bribery, undertaken in the tumultuous period before two election campaigns: to the European Parliament and the Polish parliament.

The aims of the presented project is to carry out the promise addressed to the last of the above-mentioned groups and that is the payment in 2019 of a one-off benefit for pensioners in the amount of PLN 1,100 gross. As it appears from the justification, the cost of this proposal will amount to almost PLN 11 billion. It is impossible to refer to the content of the project without evaluating the promise itself, because the basic function of the act is to simply be implemented. Thus, the Union of Entrepreneurs and Employers recognises the so-called “thirteenth retirement pension” as a harmful, expensive, and immoral attempt to persuade senior voters to support the ruling party during the election. This one-off benefit will not contribute to solving the structural problems stifling the Polish pension system at all that related to its pay-as-you-go nature and the terrible demographic situation.

Pursuant to the afore-mentioned factors, the Polish pension system is currently in the state of a real crisis, additionally deepened by imprudent political decisions. Lowering the retirement age led to the necessity to pay benefits to 300,000 new, additional retirees in 2018, which translated to a further cost of about PLN 7 billion. We must stress that this reform, significantly increasing the burden on the pension system, was carried out under the conditions of full awareness what the forecasts of the Social Insurance Fund had been. They show that even assuming a higher retirement age, in 2060, the group of people of working age would have shrunk from just over 63% to less than 54% of the population, whereas the percentage of people receiving benefits was expected to have increased from 18.5% up to over 30%. In conditions of lower retirement age, the situation is to be even worse – as little as 48.4% of the population in the working-age group is to pay contributions to a group of 35.8%. The result thereof? A deficit of the pension fund exceeding PLN 80 billion.

We see certain analogies between the proposal presented in the discussed project and the re-reduction of the retirement age. Both actions are of a populist nature and are irresponsible attempts to profit politically in the short-term from the satisfaction of the “recipient group” – be it the possibility of earlier benefits or a one-off payment in cash – regardless of both long- and short-term economic consequences. We believe that proposals such as this one-off payment of an additional benefit are almost outrageous in a situation where no concept of systemic pension reform has been announced that would address the challenges and risks that are publicly known.

The very content of the legal act sent for consultation is a source considerable astonishment. It is not a standard solution when justifying the need to introduce a given law to refer already in the first sentences to the party convention (sic!) and to the need to fulfil the promises that were made during it. The content of the following sentences rather matches pre-election media messages than argumentation to a draft normative act. A number of measures undertaken by the government were named whose aim was to improve the financial situation of the poorest care beneficiaries, citing, among others, the increase of the lowest pension or higher benefit indexation. Not a single sentence can be found in the justification containing any argument whatsoever in favour of the project being approved in the form presented. No data was provided indicating the need to pay out such a benefit. On the contrary, for the greater part of the “substantive” justification, the legislator recited government measures whose consequence were pension increases. At the end, it was concluded that the payment of a one-off benefit “will meet the expectations of the majority of pensioners”. Admittedly, it is a shockingly concise justification for the necessity of introducing a solution costing the budget as much as PLN 11 billion. In practice, therefore, the social partners have no way of addressing any argument for passing the bill, because no such argument has been made – neither in the project’s justification nor in its impact assessment.

The “thirteenth retirement pension” will not contribute to improving the financial situation of pensioners. A one-time benefit will be an attractive “gift” for voters, but in a time perspective longer than one month, it will not affect their situation in any way. The presented project, aimed solely at the fulfilment of a one-time financial pre-election promise, seems to be completely irresponsible. In connection with the above, we evaluate it negatively, once again calling for proper debate about the future of the pension system and its final shape.

 

18.03.2019 Position of the Union of Entrepreneurs and Employers on a one-off monetary benefit for retirees and pensioners in 2019

 

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Warsaw, 12^th March 2019

 

Over 500 small shops owners appeal to the Prime Minister to withdraw from Sunday trade restrictions

 

On 12^th March 2019, a petition was submitted to the Chancellery of the Prime Minister of the Republic of Poland regarding the abolition of the Act on trade restrictions on Sundays and certain holidays, and introducing changes to the Labour Code guaranteeing each employee two free Sundays a month. The petition was signed by Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers, Jerzy Romański, president of the Polish Federation of Merchants and Producers Associations, as well as over five hundred owners of small family stores.

The petition calls attention to both the express mode of adopting the Act on Sunday trade restrictions and the lack of a reliable assessment of the effects of regulation, and the negative effects of the introduced regulations. Over the first year of the Act being in force, an many as 16 thousand small family stores were closed – stores that the new regulations were supposed to help. Moreover, the social acceptance of the introduced regulations is decreasing. Along with the gradual decrease in the number of commercial Sundays per the month, the percentage of opponents of the Sunday trading ban increases.

“Many times, after we presented hard statistical data clearly showing that the Sunday trade ban is killing small stores, we would hear “argumentation” based on anecdotal evidence,” says Cezary Kaźmierczak, president of the Union of Entrepreneurs and Employers. “People would talk about brothers-in-law, cousins or neighbours who allegedly run small shops and praise the trade ban. This was supposed to be a counterargument against the statistics that were crushing to the enforced regulations. Therefore, if widely available data are still unconvincing, we have decided to collect signatures for a petition to the Prime Minister, in which we call for this harmful act to be repealed. There are more than five hundred of them, a solid, representative group of owners of the smallest stores, not anonymous individuals. They clearly say that the ban is harmful to their businesses and they ask for it to be abolished.”

The petition also points to a solution which, in the opinion of its signatories, would be much more optimal than restrictions on Sunday trade, i.e. the introduction of a guarantee of two free Sundays each month for all employees working under a contract of employment. This way, the legislator’s original goal could be achieved without excessive interference in the market or in the functioning of entrepreneurs. The advantage of this solution is also that it would be commonplace and would cover all employees, not just those employed in a part of the commercial sector.

“We really see and experience how extremely harmful the Sunday trade ban is for owners of small Polish shops,” claims Jerzy Romański, president of the Polish Federation of Merchants and Producers Associations. “This petition is a cry of despair. The smallest entrepreneurs from the commercial sector appeal to the Prime Minister to abolish the regulations that lead to their bankruptcies. I deeply hope that they will be heard.”

 

Petycja w sprawie zniesienia Ustawy o ograniczeniu handlu w niedzielę a także wprowadzenie zmian w Kodeksie Pracy, które zagwarantują każdemu pracownikowi 2 niedziele wolne w miesiącu.

Warsaw, 15^th March 2019

 

POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS ON THE PROJECT OF THE ACT AMENDINGTHE ACT ON ROAD TRANSPORT AND THE ACT ON DRIVERS’ WORK TIME

 

A new version of the draft Act amending the Act on road transport and the Act on drivers’ work time (UD 277) has been published on the website of the Government Legislation Centre recently. As indicated by the Ministry of Infrastructure, responsible for legislative work in this respect, the main objective of the project is to regulate the activities of intermediaries when outsourcing passenger transport services. The legislator’s intention is to ensure equal conditions of competition and passenger safety for all entities operating on the market and to guarantee a set quality of services.

Compared to previous versions, the change of highest importance introduced at the last stage of legislative work is the resignation from the solution enabling the use of mobile applications as device for taxi fare calculation (cf. proposed Article 4 in the draft version of 12^th February 2019). As reasoning for the necessity to withdraw this provision, the Ministry of Infrastructure indicated the negative position of the Minister of Finance regarding the draft regulations.

We believe that the introduction of such significant changes to the project at such a late stage of the process does not serve in any way the quality of legislation in Poland and does not inspire entrepreneurs’ confidence in the state. This is inconsistent with all good practices of consultation. We regret that the second-last version of the project – a good compromise, reducing restrictions on taxis, at the same time regulating the rules of intermediaries – has been changed in this way. Preventing the use of mobile applications as a device used to charge a taxi fare means that the taximeter will remain the only acceptable device. It is an anti-development solution, contrary to the compromise spirit of the previous version of the project.

Undoubtedly, the possibility of using mobile applications as devices for taxi fare calculation would finally make it possible to give up the obligation to use standard taximeters. It should be pointed out here that the use of a mobile application to determine the fare allows for indication of the price to the passenger before its commencement. Getting into a taxi, the passenger, unlike when using a traditional taximeter, is therefore fully aware of the amount of the fare that will have to be paid for transportation. This knowledge is often an important criterion for a passenger when choosing both the means of transport and the provider of such a service. In our opinion, consumers should be given the opportunity to choose whether they want to set fares based on taximeters or decide to use more innovative tools, such as mobile applications.

The legislator’s admission of only taximeters in the new draft in no way fits into the target direction of development of the Polish economy, outlined among others in the Strategy for Responsible Development. Supporting innovativeness was intended to be one of the government’s priorities, while the resignation from allowing the use of mobile applications to charge a transport fare is an action going in the opposite direction. It will not be possible to provide new solutions enabling the implementation of this type of services, as it will still be mandatory to use taximeters as devices calculating the price of transport dependent on the exact distance and time travelled.

It should also be emphasised that maintaining the solutions already in force may lead to a decline in competitiveness on the passenger transport market. The obligation to use taximeters will prevent business entities from operating solely on the basis of mobile applications. The consequence of this state of affairs will certainly be the deterioration of the quality of passenger transport services by taxis, but also the increase in the prices of such services.

Pursuant the facts listed above, on behalf of entrepreneurs, we appeal for the reinstatement of provisions to the draft law that will allow the use of mobile applications as devices for calculating taxi fares.

 

15.03.2019 Position of the Union of Entrepreneurs and Employers on the Act amending the Act on road transport and the Act on drivers’ work time

 

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Warsaw, 14^th March 2019

 

Entrepreneurs continue to feel positive about the condition of the Polish economy. This is indicated by the latest forecasts of the Union of Entrepreneurs and Employers outlines in the next wave of the Busometr Index survey, whose reading amounted to 55.2 points. This is a result similar to the study from the 2^nd half of 2018.

It should be stressed that this is the second wave since the survey is carried out on a different business base (previously the ZPP (the Union’s) database, presently – the one of Ariadna National Research Panel). The sample structure in terms of the size of the surveyed companies in this measurement and the previous ones does not differ, but the demographic structure of respondents has changed considerably.

The results of the study in the “labour market (remunaerations and employment)” section are the best of the three criteria analysed. Its value for the current reading is 60.4 points. One can see here a slight decrease compared to the second half of 2018 (then the value of this component amounted to 61.9 points).

In the case of “remunerations”, the barometer amounted to 61.2 points. As many as 35% of entrepreneurs declare an increase in remuneration in the near future. In terms of “employment”, 33% of respondents plan to increase it.

The lowest concerns related to the situation on the labour market over the next 6 months are demonstrated by entrepreneurs from the commercial sector (here the indicator reached 63.7 points). Production and services sectors followed closely (60.5 and 59.3 points, respectively).

The overall value of the Busometr Index was also influenced by the “economic situation” component, which currently stands at 55.6 pts. (increase by 0.2 points in relation to the previous survey). 36% of respondents claim that in the next six months the economic situation will improve, while 24% expect it to deteriorate.

However, the mood of entrepreneurs in the area of “investment” is not optimistic – the total value of the component was 45 points (decrease by 8.7 points in relation to the previous half a year ago). Over half of the respondents, 55%, declared investment plans, 45% do not plan any activities in this area. Entrepreneurs from the small business sector show a high propensity to invest (52.3 points); there is less optimism among micro and large enterprises (respectively, 41.4 and 47.6 points).

The results of the study were summed up by the president of the Union of Entrepreneurs and Employers Cezary Kaźmierczak.

“It is clear that the moods regarding the situation on the labour market remain very good,” he said. “Companies pay more and increase employment, and it seems that this trend will continue. Entrepreneurs are expecting a continuation of the good times at the moment, which is of course great news, but we must be worried about the investment reading and a decrease by almost 9 points. It is a clear signal for the government that businesses needs a stable regulatory environment to be able to invest.”

***

Busometr ZPP – the Index of Economic Mood in SME Sector is an economic barometer illustrating the level of optimism in small and medium enterprises, and their plans for the coming six months.

Three components affect the index: (1) the economic situation, (2) labour market (remunerations and employment) and (3) investments.

A value within the range of 0-100 is assigned to each component.

The Union of Entrepreneurs and Employers along with Maison&Partners conduct the research among a representative group of small and medium enterprises (up to 250 employees). Busometr ZPP is published every six months.

Small and medium enterprises constitute in Poland 99.8% of all the companies in the country. They create three quarters of the work places and generate 67% of GDP.

 

14.03.2019 ZPP Busometr Index. Forecast for 1^st half of 2019

 

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Warsaw, 28^th February 2019

 

Polish companies should give Russia a try

 

Polish companies should test their strength in Russia – the Union of Entrepreneurs and Employers postulates in their report. The report published by the Union describes in detail the possibilities and conditions of doing business in the Russian Federation. In spite of the cold political relations, one should try to develop economic relations.

“Polish business in Russia should be an element of Polish ‘soft power’, especially in the Kaliningrad Oblast,” said the Cezary Kaźmierczak, President of the Union. “I wouldn’t recommend any Polish entrepreneur to build a factory there, but any other type of business should be fine. Building such bridgeheads is beneficial for Poland and competition there is also moderate making it relatively easy to be successful.”

Kaźmierczak also appealed to the Polish authorities to restore the local border traffic with Kaliningrad. It is both of economic significance, very important for the border regions, and politically relevant. Residents of Kaliningrad have stopped perceiving Poles as enemies – a trend that ought to be continued. “The borderless movement with Kaliningrad is one of our few soft initiatives that we have succeeded at,” he said.

In terms of legal aspects, for a foreign entity there are three basic ways of running a business in Russia: as an exporter, by opening a sales office, a representative office or a branch, or by opening or taking over a company operating in Russia. The most popular legal forms are, like in Poland: a limited liability company or a joint-stock company. According to analyses by the World Bank, the establishment of a company in Russia takes a dozen or so days on average, whereas the liquidation of an economic entity registered in Russia lasts 6-12 months.

The tax system in Russia includes the standard CIT rate in the amount of 20%. On the other hand, the VAT rate was raised on 1^st January 2019 from 18% to 20% (with the concession rate being 10%). The property tax must not exceed 2.2% of the book value of fixed assets, whereas social security contributions – 30% of the employee’s annual income (above a certain level – the premium value drops to 15.1% of income). PIT, CIT and VAT taxes are collected on a monthly basis.

As regards labour law, employment conditions are similar to the ones in Poland, as employment contracts can be concluded for a definite period (up to 5 years) or unspecified, the trial period lasts 3 months (in some cases it is possible to extend it to 6 months), but attention should be drawn to the fact that the employer has a much broader red tape requirement in Russia (in the Russian language), it is therefore advisable to use external HR services to avoid future problems.

Customs regulations were developed within the framework of the Eurasian Economic Union (EAEU comprising of Russia, Belarus, Kazakhstan, Tajikistan, Armenia and Kyrgyzstan). Since 2012, Russia also belongs to the World Trade Organization (WTO).

It is also worth paying attention to the values and trends of Russia’s foreign trade in recent years. Generally, there is a close correlation between Russia’s exports and imports. In 2008-2009: declines were observed; in the years 2011-2013: stagnation; in the years 2014-2016: further declines; whereas since 2017: there are symptoms of recovery and growth. The last trends are indirectly related to the persistence of a high level of prices of raw materials exported by Russia, mainly energy-related, which translate into a direct inflow of funds and a revival of demand for imported goods and services, both of an investment and consumption nature. It is expected that the above trend will not weaken significantly in the coming years, nor will it reverse. In 2017, imports of goods and services to Russia closed in the amount of USD 227.5 billion, and the index for the first half of 2018 shows an increase in imports by 13.4% (year-on-year), which indicates that imports in 2018 may oscillate within USD 250 billion.

Poland is an important trading partner of the Russian Federation. According to data for 11 months of the previous year, we imported Russian goods and raw materials worth USD 15 billion (a 48.2% increase compared to the year before), while our exports to Russia amounted to USD 4.61 billion (increase by 5.1%). Taking into account the size of the economy, Polish trade with Russia is relatively higher than the trade turnover of other significant Russian partners, such as Germany, France or Italy. This proves that there are numerous trade ties and there’s cooperation between the two nations in spite of rather difficult political relations. The lack of a balanced trade ration with Russia (much higher value of imports to Poland than that of our exports) can be treated as an opportunity for future development, in terms of promotion of Polish products and brands on the market of our eastern partner.

Russian companies, Poland’s trading partners, have their headquarters mainly in Moscow, the Moscow region, as well as in St. Petersburg and the Kaliningrad region. Especially the last of them – connected to the active policy of the Oblast’s authorities and those of the Russian Federation as well as with regard to the opening to new perspectives of international trade – aims to attract investment (including that from Poland) and to revive cooperation, therefore it may become a promising area for increasing the activity of Polish companies.

 

28.02.2019 Report by the Union of Entrepreneurs and Employers: Business in Russia

 

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Warsaw, 27^th February 2019

 

Growing number of Poles oppose to restricting trade on Sundays

 

The number of people negatively assessing solutions limiting trade on Sunday is gradually growing, while the percentage of respondents who are full supporters of the regulations is decreasing – these are the rudimentary conclusions from the research carried out by Maison&Partners on behalf of the Union of Entrepreneurs and Employers.

Since the beginning of 2019, more restrictive trade regulations have been in force – stores can be opened on only one Sunday a month, unlike two – as it used to be back in 2018. Increasing the level of restrictions in force, in line with the results of previous studies, causes an increase in the number of people negatively assessing solutions limiting trade on Sundays.

“Presently, the regulations in force since the beginning of 2019 are negatively assessed by 51% of respondents, while in November this number amounted only 46%,” points out prof. Dominika Maison. “At the same time, 42% Poles declare that they disapprove of closing stores on Sundays, and this is 4 percentage points more than in December 2018. It is clearly visible that, in line with our predictions and the results of previous editions of the study, the regulations on reducing trade with their gradual exacerbation are becoming more and more annoying in people’s view.”

The camp of full supporters of these changes aimed at restricting trade on Sundays is shrinking. Whereas in November 2018, there were 31% of them, currently not more than 24% of Poles declare their full support for these regulations at the moment.

However, what is not changing are the profiles of supporters and opponents of limiting trade on Sunday. Traditionally, the majority of opponents of restrictions are residents of small towns inhabited by fewer than 20,000 inhabitants, as restrictions limited their opportunities of spending their free time on weekends, and major cities inhabited by over 100,000 people. At the same time, while among the supporters of restrictions, there is exactly the same percentage of people working in trade as in others sectors, in terms of opponents, the group of people currently working in trade clearly stands out in numbers.

As in previous studies, approx. 60% of respondents declare that they do their shopping on Sundays subject to a trade ban. As many as 76% from them go to small grocery stores for this purpose, and about 40% decide to shop at petrol stations.

“We have been conducting regular surveys of the attitudes of Poles towards trade restrictions on Sundays for several months and generally all indicators remain at the same level, except two: the number of opponents of enforced solutions is increasing, and the number of supporters is decreasing,” sums up Cezary Kaźmierczak, President of the Union of Entrepreneurs and Employers. “That’s exactly what we predicted. The less trade-free Sundays there are, the more Poles are concerned about the regulations. Solutions that are to come into force in 2020 are negatively assessed by 58%, while a few months ago, it was 53%. It’s probably quite a strong signal for the ruling party to change these regulations as soon as possible, as the Polish people simply do not want them.”

 

27.02.2019 Survey by the Union of Entrepreneurs and Employers: Attitudes and opinions regarding the restrictions on Sunday trade – wave 3