Culture Shock

Running a translation company in Poland comes with its own unique challenges. As a long-time American expatriate living in Poland for 17 years, I hope that I will be able to provide a unique perspective on this matter. I moved to Poland in 1993 and founded Argos Translations in 1996. Since then, I have experienced many of the ups and downs of running a professional translation company in Poland. While not all of these experiences may easily transfer to other East European countries, I think there are several key themes that do apply to other countries in the region.

When someone decides to move from one country to another, people often mention culture shock and the need to adapt to the new culture. Well, I am not sure you can really prepare anybody for the red tape facing businesses in Poland. The first thing you’ll need to get used to when setting up your business here is the bureaucracy and, boy, let me tell you, it’s fierce! For Americans reading this, it’s like having to go to the DMV (Division of Motor Vehicles, for non-Americans, the definition of a nightmare when it comes to red tape and bureaucracy) and deal with lines, forms and grumpy clerks on a daily basis. Now of course bureaucracy is bad everywhere in the world. I am sure there is no country where waiting in lines and talking to clerks is a pleasant experience. The fundamental difference in Poland is that so many areas of business operations are government controlled. So, what I am saying here is that you have far more contact with the government when running a business in Poland, which means you are in contact with bureaucracy.

The Taxman cometh

Even though I am an American, I have never run a business myself in the US. So, I don’t really have any point of comparison. But, I don’t think the IRS (US tax authorities) strikes fear into the hearts and souls of entrepreneurs quite the way the Polish Urząd Skarbowy does (ooh…, even writing the name sends chills running down my spine…). Why are we so afraid of the Polish tax authorities? Sometimes I wonder myself, but I think you can truly recognize fear in the eyes of others, and, in Poland, everyone is deadly afraid of the taxman. Unfortunately, there is good reason for this. There have been some well-documented cases of the Polish tax authorities bankrupting companies and then admitting, oops, we made a mistake. One of the most famous cases was of Roman Kluska, the CEO of Optimus, a publicly traded IT company. The tax people fined his company and put him in jail because of the way he interpreted the VAT regulations (which are terribly unclear). Then, after a considerable amount of time and damage, both personal and commercial, the authorities admitted that he had been doing it correctly and they just said, sorry about that… Clerks yield huge power without consequences if they err. That is what scares us entrepreneurs and explains why we cower when we face the taxman. He can ruin our lives and we’ve seen him do it.

I am mentioning the fear of the taxman here because I think it’s a fundamental problem. The taxman is king in Poland, and whatever he says goes. When I say the taxman I am actually referring to all clerks who have the power to fine a business here, they don’t necessary have to work for the tax office.

As a result, we do everything the taxman tells us to do, even the absurd because we are constantly scared that he’ll be coming to get us next. When you combine this fear with unclear and antiquated laws, you can imagine the difficult situation business owners face. Anybody you talk to will ultimately tell you there are no shortcuts -- just obey the rules, even if they seem absurd. Ultimately it boils down to this: if you want to take advantages of the opportunities of doing business in Poland, then this is the price you have to pay and, in case you are wondering, yes, there are opportunities and benefits of setting up in Poland. I’ll get to these later.

Check, check and double-check

Back in the good ole days of communism there weren’t many free market enterprises around that needed government regulation. But since 1989 many laws and regulations have had to be put together hastily. Needless to say, not all these regulations were completely thought through. This is quite understandable because the task of moving from a communist system to a free market system can be quite daunting, as you can imagine. The result of this quick transition from one system to another is a commercial code that is full of loopholes and inconsistencies. Every year improvements are made, but it’s a long road.

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