Despite overall GDP growth, the investment rate in Poland remains low compared to other EU countries. This is partly due to legal instability and increasing regulatory burdens. Even with the government’s promise of an investment offensive, entrepreneurs continue to grapple with uncertainty and rapidly changing regulations that hinder long-term planning. A complicated tax system and a lack of transparent legislative consultations also pose challenges. Business representatives emphasize that simplifying and stabilizing the legal framework are key factors that could stimulate the economy and increase Poland’s attractiveness to investors.
According to the prime minister’s announcement, this will be a record year for investments in Poland, with their total value exceeding 650 billion PLN. These investments include the expansion of ports, railways, and projects in the energy sector.
“Prime Minister Tusk announced a major investment offensive – billions meant to stimulate the Polish economy. It’s good that the government recognizes the problem of insufficient investment levels and the consistent decline in investment spending in our country. There are many reasons for this, including macroeconomic factors that are independent of the Polish government, as well as the overall competitiveness of the European economy. However, in Poland successive governments have, for many years, consistently placed obstacles in the path of entrepreneurs, hindering the free development of investments. As a result, we have a record low level of investment, and the volatility of regulations and bureaucratic barriers further discourages companies from expanding their investments in our country or choosing Poland as a destination for foreign investment,” says Piotr Palutkiewicz, vice president of the Warsaw Enterprise Institute, speaking to the Newseria Biznes agency.
Statistics show that for years Poland has been struggling with a declining level of investments, with the investment-to-GDP ratio remaining among the lowest in the European Union. In 2023, this ratio was 17.7 percent, with Greece being the only EU economy where the figure was lower (15.2 percent). All other countries, including those in our region, recorded a higher investment rate – for example, Romania (27 percent), Bulgaria (18.7 percent), Slovakia (22.3 percent), Lithuania (23.7 percent), Hungary (27 percent), Germany (21.5 percent), France (23 percent), and the Czech Republic (27.3 percent).
Entrepreneurs point out that one of the reasons for this situation is the lack of legal stability and regulatory uncertainty, which—in conditions of high inflation and rising operating costs—make long-term planning difficult. This also discourages foreign investors from allocating capital in Poland, as they increasingly choose to move their capital to more stable economies, such as the Czech Republic or Romania, where the legal environment is more predictable.
“We have numerous examples from recent years: whether it’s the ‘Polish Deal’, changes to excise policy introduced this year, uncertainty regarding family foundations, or the lack of clarity about how extended producer responsibility will be implemented in our country—these issues keep recurring. On one hand, entrepreneurs are promised deregulation; on the other, a flood of new laws makes it difficult for them to run their businesses. As a result, they don’t know what to expect next week, next month, or next year,” explains Piotr Palutkiewicz.
These concerns are corroborated by the findings of the “Legal Barometer” report, developed by Grant Thornton. According to the report, between 2014 and 2023 nearly 250,000 pages of regulations were introduced, and the 20 most important laws regulating economic activity changed their wording 1,189 times, increasing their volume by 53 percent. In 2023 alone, 34,400 pages of new law were enacted in Poland (an 8 percent year-on-year increase). In the same year, 1,604 modifications to regulations governing business activities were introduced, and the vacatio legis period for tax laws lasted a record-short 31 days.
According to the WEI expert, every change in the law forces companies to adjust, generating additional costs and slowing economic activity. The persistent excess of regulations means that Polish companies allocate more and more resources to legal services and tax advisory instead of investing in development and innovation.
“When it comes to solutions that could improve the business climate in our country, the answer is very simple: there are no solutions. Entrepreneurs don’t expect the law to change – especially not the law that was already promised,” says the vice president of the Warsaw Enterprise Institute. “One example of a law that was drastically and unexpectedly changed is the excise policy in our country, which was supposed to remain clear until 2027. However, last year the government broke its previous agreements with the business community.”
In early 2022, Poland introduced the so-called excise map – an agreement on the gradual increase of excise rates on stimulants (tobacco and alcohol products), developed by the then Ministry of Finance after extensive consultations with the market. In the case of tobacco products, the plan was that excise on cigarettes, loose tobacco, and tobacco heating inserts would increase uniformly by 10 percent annually until 2027. This was intended to ensure higher revenues for the state budget, while also providing predictability for the tobacco industry, which had been struggling with the grey market—a problem that had only been curtailed after 10 years.
However, following the parliamentary elections in 2023, the new Ministry of Finance decided to cancel these arrangements. The ministry opted to introduce new excise hikes on tobacco products, with a scale that is many times larger. Experts indicate that this will very likely lead to a restructuring of planned investments and a reduction in the inflow of foreign capital. Moreover, sudden tax increases may also trigger a resurgence of the grey market, which would reduce actual budget revenues and weaken the competitiveness of legally operating market players.
“You may not like the tobacco industry or large tobacco conglomerates, but keep in mind that these are enterprises investing huge sums of money in factories and often in new products that are meant to help move away from traditional cigarettes. And now, factories have been built, technology has been developed, and suddenly the ministry changes the tax rules. This is yet another example of how not to make law,” says Piotr Palutkiewicz.
The vice president of the Warsaw Enterprise Institute also points out that another issue in regulating Polish entrepreneurship is the incomplete consultations and lack of transparency in the legislative process.
“At the beginning of the current term, politicians promised great openness and transparency in the consultation process for new regulations. Now it turns out that the government very often shuts itself off from meetings and listening to the voice of business. And even if they do listen, these opinions are often ignored,” the expert explains.
The vaping industry recently highlighted this problem, warning of the consequences of changes in excise policy—especially the uneven tax burden on different products in the tobacco market. A 75 percent increase in the excise rate on e-cigarette liquids could pose a threat to legally operating producers, most of which are small and medium-sized Polish companies, and could lead to a growth in the grey market.
“The law must be made in such a way that entrepreneurs feel secure, because they do not invest only to have the rules of the game change suddenly after six months. When investing, we expect a return, and if there is a risk of regulatory changes, that return must come much faster. That’s why the stability of the law is important, and politicians who do less actually do more for entrepreneurs,” adds Grzegorz Gaża, a member of parliament from the Law and Justice party.
The lack of a genuine dialogue with entrepreneurs results in regulations that do not take market realities into account. This hampers investment planning and reduces the competitiveness of Polish companies on the international stage.
“According to the latest data on the competitiveness of the Polish economy, our country ranks 31st out of 38 countries surveyed. We are at the very bottom of the table when it comes to the competitiveness of the tax system, and we are the 12th most complex legal system in the world. These aren’t just expert opinions or complaints from the opposition that is not in power at the moment. These are international rankings that consistently show that our country struggles with an overly complicated legal system. This, in turn, affects entrepreneurs, who are afraid to invest and make decisions worth billions of PLN, dollars, or euros in a country where they don’t know what tomorrow will bring,” emphasizes the vice president of WEI.
The current government is in the process of developing proposals for deregulating business regulations to stimulate investments and increase the competitiveness of the Polish economy. In early February, Prime Minister Donald Tusk asked Rafał Brzoski, head of InPost, to form a team to prepare proposals in this area. Last week, the first proposals were presented, including measures to reduce company inspections, facilitate the employment of foreigners, and simplify tax regulations.
“Of course, deregulation is the right trend,” says Piotr Palutkiewicz.
“In Germany, a book was developed in which an entirely new tax ordinance was proposed on just under 40 pages. Here, we have over 3,000 pages, so simply simplifying the tax ordinance is a good direction. And for me personally, as an entrepreneur, my biggest dream would be for it to be just one or two A4 pages,” adds MP Grzegorz Gaża.
