Over the past six months, the number of millionaire debtors in Poland has surged by almost one-fifth. The National Debt Register (Krajowy Rejestr Długów, KRD) now lists 865 businesses, each with debts of at least one million zlotys. Most of these are commercial law companies, whose total outstanding liabilities to creditors and the economy amount to over 1.7 billion PLN. Sole proprietorships are also among the affected entities.
Running a Business in Poland: Challenges Beyond Setup
Starting a business in Poland is relatively straightforward. The real challenge lies in sustaining it. According to the Global Entrepreneurship Monitor report, prepared by the Polish Agency for Enterprise Development (PARP) and the University of Economics in Katowice, every second entrepreneur fears failure. The main obstacles include high labor and energy costs.
However, these are not the only factors at play. The latest data from KRD indicate that unreliable business partners who delay payments for goods or services significantly increase business risks. Some of these defaulters have accumulated enormous debts. Alarmingly, the number of millionaire debtors is rapidly growing. In just six months, their count has risen from 727 to 865, with their total obligations reaching 1.7 billion PLN.
Large Companies More Susceptible to Seven-Digit Debts
“We observe that larger companies are most likely to fall into the trap of seven-figure debts. Two-thirds of these firms operate as commercial law entities, collectively owing over 1.3 billion PLN. This is because they often engage in multimillion-dollar contracts, some of which they later fail to pay for,” explains Adam Łącki, CEO of the National Debt Register Bureau of Economic Information.
Łącki also highlights the impact on creditors: “When discussing debtors, we must not forget the victims. Many ‘millionaires’ owe money to just one creditor. There are 242 such businesses across Poland. However, others have obligations to multiple entities, including one particular ‘multi-debtor’ who has left 25 business partners unpaid.”
Millions Owed by Companies in Major Cities
From an industry perspective, the highest outstanding debts are found in the trade sector, where businesses owe creditors 403.7 million PLN. Trade also has the most millionaire debtors, totaling 225 companies. The construction sector ranks second, with outstanding liabilities of 298.5 million PLN, followed by industry (280.3 million PLN) and the transport, shipping, and logistics (TSL) sector (228.2 million PLN).
Most millionaire debtors operate in large cities with populations exceeding 300,000. A total of 330 such entrepreneurs owe a combined 714.9 million PLN. Conversely, the lowest number of millionaire debtors (26 firms) is found in towns with fewer than 5,000 residents.
The undisputed hub of millionaire debtors is, unsurprisingly, the Mazovian Voivodeship, with Warsaw as its epicenter.
“Mazovia and Warsaw serve as Poland’s business hubs, attracting the largest companies and investments. This concentration of high-value contracts increases the risk of significant debt accumulation. Currently, there are 245 millionaire debtors in the Mazovian Voivodeship, collectively owing over half a billion PLN. In Warsaw alone, 173 heavily indebted entrepreneurs have accumulated a total of 388 million PLN in liabilities,” says Łącki.
The Silesian Voivodeship ranks second in total debt (210.8 million PLN), followed by the Greater Poland Voivodeship (179.1 million PLN). Among counties, Kraków County has the highest recorded debt, with businesses owing nearly 13 million PLN, followed by Poznań County, where liabilities reach 11 million PLN.
Microenterprises Bear the Brunt
However, millionaire debts are not solely a problem for large companies in major cities. Many small businesses are also waiting for payments from these large debtors, facing immense financial strain. Many microenterprises lack sufficient reserves to survive prolonged periods without payments, especially when dealing with seven-figure amounts.
“Among the businesses harmed by these ‘millionaires,’ 13% are sole proprietorships, collectively losing nearly 100 million PLN. KRD data clearly show that running a business involves not only profits but also the risk of dealing with dishonest or insolvent clients. Small companies should take precautions, such as verifying potential business partners before entering agreements, using open factoring to encourage prompt payments, and monitoring payment deadlines. Over the past nine years, microenterprises working with us have avoided not only two billion PLN in losses but also the risk of bankruptcy,” notes Emanuel Nowak, an expert at factoring company NFG.
