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Poland, a European hub for Healthcare innovation

Picture - Local Insight Poland: A European Hub for Healthcare Innovation
January 2024

Poland invests a lot in healthcare innovation, presenting a wealth of opportunities for international companies seeking to expand their businesses into this dynamic market. With a growing demand for medical services, increasing expenditure, and a strong focus on innovation, Poland is about to become a major hub for the Central and Eastern European (CEE) region.

In this article, ALTIOS’ experts share how foreign companies can take advantage from the healthcare sector in Poland.

What to know about the healthcare system in Poland

Infographic Healthcare in Poland

The Polish healthcare system is rapidly evolving, marked by significant developments in both the public and private sectors. Public expenditure on healthcare innovation is expected to reach 196 billion PLN (43.5 billion euros) in 2024, representing around 6.2% of the GDP. The projection for 2027 anticipates a further increase to 7%, reflecting the government’s commitment to improving healthcare access and quality.

The private healthcare market is also experiencing notable growth; expenditure on private medical services including spending on drugs and non-drug services exceeded 70 billion PLN (15.5 billion euros) in 2022. Between 2023 and 2028, it is expected to grow at an annual rate of 7%, as more and more Polish turn to private providers for faster and more personalized care. In the third quarter of 2023, around 4.7 million Polish opted for private health insurance, marking a 15% year-on-year increase. Health packages, a popular employee benefit, are a major driver of the subscription and medical insurance market, generating substantial revenues of 6.9 billion PLN (1.5 billion euros), with expectations of 15-20% annual growth until 2026.

Poland’s commercial clinical trials market is also thriving, valued at over $1.4 billion as of 2022. This segment represents about 15% of the country’s Research and Development (R&D) spending and has captured the attention of both foreign and domestic investors. Several acquisitions have been made in recent years, indicating the strong growth potential of this market.

Emerging trends in the Polish healthcare sector include a focus on cancer therapies, particularly on fast-track treatments for cancer patients. Additionally, there is a growing awareness of well-being topics, encompassing physical and mental health, in corporate and private contexts.

Healthcare innovation in Poland: What are the advantages?

The healthcare industry is progressively embracing digital solutions to enhance the efficiency of patient appointments and treatment processes. Since 2019, the country has mandated the use of electronic medical records (EMRs) and e-referrals, solidifying the sector’s commitment to digitalization. This digital transformation, however, needs robust cybersecurity solutions tailored specifically for the healthcare sector.

In addition to this keen appetite for new technologies, there is a high demand for medical services and growing expenditure on health. The sector is experiencing progressive consolidation, with major players such as LuxMed, Medicoer, and PZU leading the way.

The Polish healthcare sector has emerged as a leader in startup financing rounds in Poland, accounting for a significant 15% share of all startup transactions between 2020 and 2021. Top medical and healthcare startups include DEBN, StethoMe, and DocPlanner.

Picture - Healthcare in Poland

What challenges to face when exploring the Polish healthcare industry?

The Polish healthcare market is dynamic and growing, but it also presents challenges for global expansion.

  • One of the significant challenges in the Polish healthcare industry is the severe shortage of professionals, including doctors, nurses, and also specialized fields such as psychiatrists, geriatricians, and pediatricians. This scarcity poses a considerable barrier to recruitment efforts. Within the next decade, the number of nurses could potentially decrease by 80,000, significantly reducing the potential of the group by ¼. Also, although the number of places in medical faculties is rising by 7% each year, the number of places in specialized medical programs is not increasing.

  • The Polish healthcare system is also complex. It bifurcates into two distinct paths: the National Health Fund (NFZ) and private medical care. Private medical care offers faster and more comprehensive care, but it is paid for by the patient. The NFZ provides access to healthcare for all, but waiting times are often extended, and the system of refunds from public sources is very complicated and unclear.

Would you like to develop your business in Poland?

If you are interested in more insights on the Polish market, read our last article IT sector in Poland 2023: what opportunities for international companies or reach out to our experts.

IT sector in Poland 2023: what opportunities for international companies?

poland it sector altios

August 2023

In 2023, the IT sector in Poland has been experiencing outstanding growth.

Also known as the “IT center of Europe”, the Polish market is home to the highest number of domestic IT companies in the continent. This can be confirmed by the enormous interest of international corporations in opening their branches and large centers of tech services in Poland.

In this article, ALTIOS’ experts share how foreign companies can seize great opportunities in the IT sector in Poland.

IT and software: the Polish market's driving force

The IT sector is responsible for generating 8-9% of the Polish GDP, while the share of software business is increasing.

The value of the market is around PLN 70-85 billion. Looking at the total revenue of companies (excluding micro entities), it can be estimated that the software and IT services sector alone accounts for approximately two-thirds of the entire market (about PLN 55 billion). This share is currently rising towards 70 %, which is typical for highly developed countries, where the demand for IT hardware is lower for the reason of high market saturation.

Following Clutch data, in Poland there are around 50,000 software companies. What an impressive number, considering that this economic sector is relatively new!

Different sized companies make up this market – from micro entities to branches of global corporation.

In 2022, Google has announced a huge investment coming in Warsaw. The company’s purchase of office buildings in the capital is a sign of team development, and engineering recruitment in Cracow.

Other big brands like Samsung and Intel have decided to locate their R&D centers in Poland.

Except for large players, Poland is home to many local, competitive software houses and game developers.

What’s interesting, there are two potential tech unicorns in Poland: Brainly and Booksy, which prove the entrepreneurial spirit of the country.

Investing in the IT sector in Poland: what are the advantages?

The main success factor for the industry is having highly skilled people. Poland appears at the top of all rankings that have the most talented programmers.

The COVID-19 pandemic has accelerated global digitalization process, which rebuild the plans for future – many so far traditional businesses were forced to start thinking about digital transformation or new digital channels.

In Poland, according to the 2021 DESI (Digital Economy and Society Index), Poland is still below the EU average in all categories. It is currently ranked as 24 out of 27 EU countries, while performing better in connectivity (21st position) and digital public services (22nd position).

IT sector poland altios

The low DESI ranking is due to the insufficient integration of technologies in companies. While companies understand the importance of digital transformation in their organizations, most of them do not plan to increase investments in this area, in the coming months. In the future, country market development will be driven by the digitization strategies of the public, business sectors, and the need to invest in labor-saving or productivity maximizing solutions.

What challenges when exploring the Polish IT industry?

Among the barriers to the industry’s development, following issues could be pointed:

  • rising labor costs and talent draining, still moderately advantageous structure of the economy (relatively high share of simple processes and less advanced industries);
  • low awareness of the benefits resulting from IT investments in the SME sector (what could be changed by pandemic situation);
  • companies’ capital shortages.

In 2021, the number of M&A transactions in Poland hit a record high of 329, and a big part of them was in IT/tech sector (around 30%).

In 2022, despite Ukraine War and economic situation, other acquisitions on the tech market could take place, like French group Hardis’s acquisition of Polish Cloudity. On the other hand, Polish tech companies were also active in foreign acquisitions – like Blik’s choice to acquire Viamo, or Vercom’s acquisition of American MailerLite.

There is also visible growing interest in acquisition of cybers security companies.

More opportunities

The IT sector in Poland offer countless opportunitied for international companies looking to invest or expand. In fact, Poland is the:

  • 1st country in CEE (13th globally) by smartphone penetration
  • Cheapest mobile data in CEE (USD 0.7 per 1GB)
  • 2nd fastest growing European market for Revolut
  • 90% of card payments in Poland are contactless

Our teams in Warsaw and Cracow can enlighten you further on this attractive sector, and support you through all the steps of your expansion. Book an appointment with one of our experts to discover our personalized offer.

Want to learn more?

If you’re looking for more insights on the Polish marker, read our most recent article on the subject: What to know about Poland in 2023

ALTIOS Corporate Finance supports Susty Wastes Solutions in joining forces with Polemecanic Group

Press Release – June 23th, 2023

Strengthening the position in Poland and France

  • In April 2023, the shareholders of Susty Wastes Solutions, a French company offering design and construction services for sorting lines for selective waste collection, and the shareholders of Polmecanic Group, a Polish group of companies specializing in the production, installation and service of waste recycling facilities, decided to merge their operations.
  • The newly formed SWS-PG group comprises 12 companies in France, Belgium, Germany and Poland, and a team of 300 specialists offering complete vertical integration of plant operation for selective waste collection, as well as, among others, the assembly of steel structures, modernization of industrial equipment and relocation of equipment and production lines.
  • The decision to join forces, a result of many years of successful cooperation between Susty Wastes Solutions and Polmecanic Group, will allow to fully exploit the synergies existing between the companies, and thus to further strengthen the SWS-PG group’s position in the European market.

Transaction supported by ALTIOS Corporate Finance

  • ALTIOS Poland’s Corporate Finance Department advised Susty Wastes Solutions on the transaction for the purchase of Polmecanic Group shares.
  • ALTIOS’ role was to prepare, in cooperation with the sellers’ advisors, the transaction documentation in accordance with the parties’ agreements and the requirements of Polish law.

Susty Wastes Solutions' testimonial

We are proud of this wonderful development and of the opportunities which are opening for all of us. The relationship we built several years ago between Poland and France was already strong, and now it’s even stronger!
We’re excited to be able to unite our values, share our experiences and multiply our offers to serve our present and future customers even better.
We would like to thank our bank and legal partners for their trust, and also ALTIOS for its precious assistance.

Georges CHALAIN, General Director of Susty Wastes Solutions

Polmecanic Group's testimonial

It’s very satisfying to be able to bring two dynamic groups together in this way. On the one hand, it seems to me a natural consequence of our successful cooperation. After all, we have so much in common: business approaches, values and aspirations. We also complete each other very well in terms of branch competence.
On the other hand, I believe that there are new business opportunities, new paths of development ahead of us as well as new opportunities to exchange experiences and increase knowledge.
Therefore, I am not only proud of what we have achieved so far, but also very excited thinking about future challenges.


Adam Bokwa, CEO of Polmecanic Group

ALTIOS Corporate Finance's testimonial

“It is a true pleasure to support a transaction made between people who have known each other and worked together for years; a transaction that is another step in the development of specialized entities operating in the essential and rapidly growing waste recycling market in Europe, especially since it involves companies from countries that are particularly close to me: France and Poland. ”

Zdzislaw Dominik, Vice-president of ALTIOS Polska

Participants

Buyer’s advisors:

  • Legal: Pierre-Yves MILIN (attorney, Cabinet Milin)
  • Altios Corporate Finance: Zdzislaw Roland DOMINIK (Vice-president Altios Poland) / Magdalena FRAILE (Senior Project Manager) / Anne AUDRAIN (International Account Manager) / Piotr NOWORYTA (Senior Legal Adviser)

Sellers’ advisors:

  • Legal: Katarzyna WILAMOWSKA (attorney-at-law)
    Łukasz KRAWCZYK (attorney-at-law, SKR Stelmach Krawczyk Romanow Legal Office)

ALTIOS: Since 1991, the group offers international market expansion solutions to companies operating and investing internationally. ALTIOS supports you with everything you need, from nurturing your growth strategy to your international acceleration by entering dynamic markets, to set up and operate your foreign branch with everyday compliance administration – HR, accounting, tax… – through to strategic cross-border acquisition.

www.altios.com


Contact Press : Alexandre Kaplan, M&A Director, a.kaplan@altios.com

HR regulations change in Poland

After several tax changes for 2023, Poland updates HR regulations as well.

Business trips

There will be a new per diem rate for business trips as of 1 January 2023. As a consequence, the lump sums for transport travel expenses and for overnight stays will also change.

  • a per diem for a business trip – PLN 45
  • lump sum to cover the costs of travelling by public transport – PLN 9
  • lump sum for an overnight stay – PLN 67.5
futuristic business people expo concept

Employee Capital Plans

If an employee does not wish to save in a PPK, then they must, once again, submit a written declaration resigning from the scheme to the employer. If the employee does not make such a declaration, the employer will have to start making contributions for that employee from April 1st, 2023.

Labour Law (should take effect in Q1 2023)

  • The concept of remote working – will be agreed upon between the employer and the employee and included in the remote working regulations
  • Legal grounds for employers to carry out preventive checks for the presence of alcohol or substances acting similarly to alcohol in the bodies of their employees
  • Measures enabling greater use of flexible working arrangements
  • Changes to parental leave and maternity benefits
  • New rules on paternity leave
  • New carer’s leave and leave of absence for urgent family reasons

For more content about reforms in Poland: click here

What to know about Poland in 2023

Poland is one of Europe’s most attractive locations for overseas companies to set up a business (economic stability, a well-educated and diverse workforce, favorable location at the heart of Europe)

Economic Outlook

Economic growth is expected to decelerate to 1.6% in 2023, due to:
    • High inflation – after peaking at the beginning of 2023 at almost 19%, inflation is projected to decelerate to 4.3% towards the end of 2024
    • Monetary policy tightening
    • Negative confidence effects related to the war in Ukraine
    • Slowing demand in key trading partners

Supply-side disruptions, high input costs, and uncertainty related to the war in Ukraine can affect private investments.

The National Recovery and Resilience Plan is expected to support public investment.

Higher energy and food prices can weigh on household demand and can affect heavily poorer segments, who devote 50% of their monthly spending to food and energy.

The general government deficit is expected to increase to 5.5% of GDP in 2023 (5.2% of GDP in 2024)

poland flag on a mat in the wind and blue sky

Minimum wage growth is expected to be outstripped by inflationary pressures, leading to a decline in the real minimum wage in 2022, which will be moderated by the phased adjustment of the minimum wage in 2023 up to 3 490,00PLN from January 1st and up to 3600,00PLN (probable) from July 1st, 2023.

Poland avoids recession but may see bumpy road ahead.

Taxes in Poland

Regulatory changes introduced over the past 12 months are designed to simplify and modernize the Polish tax and corporate compliance regimes.

Poland has implemented significant reforms in its tax system and corporate compliance regime over the last few years:

  • Mandatory disclosure rules are stricter in Poland than across the EU, and cover internal transactions over a certain value as well as those that cross-borders

  • Environmental obligations in Poland follow EU regulations but are generally stricter and require specific registration and mandatory reporting to Polish authorities

  • Most official company applications and returns can now be submitted electronically, but they must be signed using a qualified certificate that meets the EU’s Electronic Identification, Authentication, and Trust Services (eIDAS) regulations

  • In 2016 Poland introduced its Standard Audit File for Tax (SAF-T) system known as JPK. This incorporated seven regulated JPK structures, of which two, JPK_VAT and JPK_FA, were relevant for VAT. The requirement for monthly submissions of JPK_VAT, was extended to all taxpayers on 1 January 2018. JPK_VAT was combined with the VAT return during 2020 and the consolidated JPK_V7M/K is submitted per the frequency of the VAT Return (monthly or quarterly). The remaining six JPK structures are submitted upon request of the tax authority in event of an audit.

Improvement in the area of digitalization for both companies and individuals – especially– some are taking time to work through the system and have increased the complexity of doing business in Poland.

All above makes it even more important for overseas companies and seek expert guidance when incorporating or doing business in Poland.

Even though changes work through the system and things are improving on an almost daily basis, but the Polish tax and regulatory environment remains still highly complex.

Tax changes 2023 in Poland:

Corporate Income Tax:

  • Minimum income tax – came into force in 2022, but have been suspended until December 31 2023, giving taxpayers another year to prepare for their application; profitability ratio increased from 1% to 2%; the formula used to calculate the tax base has been adjusted.
  • From 1 January 2023, social contributions resulting from the employment relationship in the part financed by the contribution payer, contributions to the Solidarity Fund, the Labor Fund and the Guaranteed Employee Benefits Fund will be classified as tax costs in the month for which they are required, but only if in which they will be paid within the time limit resulting from separate regulations.
  • Changes to the method of charging debt financing costs into tax-deductible costs – exclusion relates to an amount exceeding one of the two: PLN 3 million or 30% of EBITDA, yet not the sum thereof
  • Amendments to and clarification of provisions on profit shifting (costs incurred directly or indirectly to the related entity outside of Poland) – introduction of provisions on taxable base, changes to the method of establishing preferential taxation

Value Added Tax:

  • From January 1, 2023, basic VAT rates will apply again, ranging from 8 to 23% for individual products (termination of the so-called anti-inflation shields, which will expire on December 31, 2022).
  • The VAT rates will again cover, among others: fertilizers, plant protection products and energy carriers such as natural gas, electricity and system heat.
  • The exception will be the extension of the anti-inflation shield for food, which will most likely be maintained by the government. In 2023, or at least for part of it (until mid-year), the VAT rate for food products will still be 0%.
  • From January 1, 2023, new category of VAT payers will be introduced to the VAT Act – VAT Group – it means a group of entities related financially, economically and organizationally, registered as a VAT payer.
  • Electronic invoicing, along with real-time tax submission, will become compulsory in Poland from 1 January 2024.

Transfer Pricing:

The key amendment repeals the requirement to follow the arm’s length principle and the documentation obligation for indirect “tax haven” transactions:

  • PLN 500 thousand (base threshold)
  • PLN 2.5 million (for financial transactions)

Withholding Tax:

The main purpose behind amending withholding tax (WHT) provisions is to relax the rules for tax collection – commonly referred to as the pay & refund mechanism – or make it more feasible

Other changes in tax law that are worth paying attention to:

  • Simplification of the relief for “bad debts” – no attachment for declaration submission required – change from January 1, 2023;
  • Simplification of the procedure for refunding tax on income from buildings;
  • CIT exemption of income of social enterprises;
  • Changes in SLIM VAT 3 – probably change from July 1, 2023;
  • The obligation to record turnover by car washes, including self-service ones.

ALTIOS Poland monitores tax law regulations in Poland and will inform you about the tax changes related to your specicfic business activity.

More content about Poland: click here

Altios, accompanied by Polish Investment & Trade Agency, organized a webinar on Vietnam as a destination for Polish companies.

April 2022

Click on the link below to watch the replay of this webinar: https://attendee.gotowebinar.com/recording/8899476124282310150


Vietnam has become a new attractive destination for global investors. Despite the pandemic hard hit, Vietnam finished its 2021 with a 2.58% GDP growth and around 31 B USD of Foreign Direct Investment.

What are Vietnam’s strengths? How can it attract international investors? How to work with Vietnamese partners? Which are critical points for doing business in Vietnam?

The webinar took place on March 17th, 2022 from 9:00 to 10:00 a.m.