Important Polish market attracts Swiss business

Reto Renggli is head of the Swiss Business Hub in Warsaw swissinfo.ch

Poland is the most attractive country in Europe for foreign investment, according to a survey conducted by Ernst & Young.

And a visit to the Polish capital, Warsaw, appears to back up this finding. The city centre is one giant construction site, and many well-known western firms and international hotel chains have a presence here.

Leading Swiss companies including Novartis, the Swatch Group and UBS have all established themselves in the central European country, while many small and medium-sized enterprises are looking to get a foothold in the Polish market.

But although Poland is the most important destination for Swiss foreign capital in central and eastern Europe, Switzerland is not one of the leading investors in the country.

Reto Renggli, the head of the Swiss Business Hub based at the embassy in Warsaw, is trying to encourage more firms to do business in Poland, which offers the largest market among the new European Union member states.

Investment interest

“After May 1, 2004 and Poland’s accession to the EU the interest among Swiss companies increased dramatically,” Renggli told swissinfo, adding that questions being asked related not just to investment but also to exports.

“[But] compared with other markets in central and eastern Europe I think Swiss companies are underrepresented in Poland.”

Ulrich Schwendimann of the Swiss-Polish Chamber of Commerce agrees. “Swiss business activities in Poland have developed enormously. This dynamic began to be noticeable around two to two-and-a-half years ago,

“But unfortunately, compared with other countries of a comparable size such as Austria, the Netherlands, Belgium and Denmark, Switzerland does less trade with Poland.”

The chamber has 85 members, 70 of which have Swiss capital. Twenty to 25 are manufacturing companies, including Novartis. Most of the other companies are in the service industries.

Some firms, including Kronopol (flooring) and Hiestand (baked goods), manufacture in Poland and export their products back to Switzerland and around the world. Others concentrate on servicing the Polish market.

Obstacles to business

Renggli admits that doing business in Poland can be complicated and time-consuming. “It’s definitely not easy to do business here; you have to invest time, personnel and resources and you need a mid-term strategy.

“You can’t just come to Poland and make money.”

Companies coming to Poland have to accept that there may be a lot of competition. Language and cultural differences can also be a problem, he says, although these would also arise in other markets.

A survey carried out by the chamber of commerce indicates total support among respondents for the extension of the agreement on the free movement of workers to Poland and the other nine new EU member states.

Swiss firms reported that the current situation where workers cannot easily move between Poland and Switzerland creates red tape and is time consuming.

One firm complained that it had taken one of their workers a full week to complete the necessary paperwork to allow a Swiss manager to work for the firm in Poland.

The current restrictions block the transfer of know-how, firms say, and prevent close cooperation between Swiss and Polish branches.

They also complain that it leads to Swiss firms being disadvantaged on the Polish market compared with businesses from EU countries.

swissinfo, Morven McLean in Warsaw

Key facts

Non- EU member Switzerland and Brussels signed two sets of bilateral accords in 2000 and 2004, covering 16 different areas.
Switzerland’s official unemployment rate (July 2005): 3.5%.
The EU is Switzerland’s most important trading partner.