Cost of doing business

The cost of doing business is, no doubt, the primary reason for why companies want to go to Poland. Let’s be more specific and look into the detailed cost comparison between the countries.

Software developers salaries

To start with, let’s use the data from PayScale to compare the median salary of a Java Developer. The data available at PayScale.com represent the salaries of currently employed programmers as self-reported. It does not, however, represent the salaries that need to be paid to new hires, which, depending on the location, can be as much as 20–30% higher than the median.

We captured the median salary of a Java Developer, except for Norway, where due to insufficient data, we used the salary of a Software Developer.

Check out also: 7 Reasons Why You Should Set Up A Subsidiary In Poland Instead Of Outsourcing

Additional employment cost

All European countries include a certain portion of Social Security Contribution that is paid by the employer on top of the employee’s gross salary. While the economist would often talk about the tax wedge, here we’ll only focus on the extra cost that an employer has to pay. All the data comes from the OECD records for 2017.

The country where this extra cost is the lowest is Denmark, while the highest is in its neighbouring Sweden. Poland ranks just 3 points above the average, adding 16.8% on top of the gross salary.

Corporate tax

The majority of the companies that decide to open a location in Poland operate in a model that doesn’t yield profit margin in Poland. The Polish entity sells its services to the parent entity and issues invoices to cover the cost of operations. For some companies, though, paying corporate tax in Poland appears to be a more attractive option. Out of the 7 countries listed, only Switzerland and Germany have a lower corporate tax than Poland. For companies from Denmark, Netherlands, Norway or Sweden, paying corporate taxes in Poland can be an interesting alternative to paying them back home.

Cost of office space

For many IT businesses, office space is the second largest recurring R&D cost after salaries.

We compared the cost of office space in the capital cities of the 7 countries and Krakow. We used data from statista.com with a commercial properties lease cost for A-class buildings.

With its plethora of new office buildings and construction of over 200 000 m2 of A-class office space in the last couple of years, Krakow offers very competitive lease prices. Putting aside locations like London and Zurich where the cost is 4–5 times higher than in Krakow, other locations (except for Copenhagen) are at least twice as expensive.