Poland IT opportunitiesInternal review

Poland General Info

Sixth-largest in the EU economy.

Population 38.5 millionsGDP 2015 $491 billion Expected economy growth 3.7% in 2015Unemployment 10.6%

Taxation of Copmanies

Corporate income tax 19%Withholding tax• Dividends 19%• Interest 20%• Royalties 20%Value added tax 23% (standardRate)

Taxation of Individuals

Personal income tax - regular progressive rates(applicable e.g. to income from dependent services)

18% and 32% (for income exceeding PLN 85,528)

Dividends 19%

Interest 19%

Royalties progressive 18% and 32%

Capital gains 19%

VAT 23%

Social Insurance Contributions

Full Deloitte Taxation review

http://www2.deloitte.com/content/dam/Deloitte/pl/Documents/Reports/CE_TandI_Raport_2014.pdf

IT Market review

Following review is based on assumption that Facebook users are relevant cross-section of society and analysis of its users interests will allow us to compare Ukrainianand

Poland markets.

This data confirms Poland is on TOP of EU IT Outsourcing

Around 2 000 000 Facebook users in Poland are interested

in Programming

But Magento seems to be not so popular

Good for business, worse for hiring!

TOP IT Clusters

Although PR of TOP cities we can see 71% of Programming interests are proportionally

distributed across the country.

Krakow is an IT heart of Poland

Some conclusions• Capacity of Polish IT market is comparable to Ukraine,

in different sources we can find the market size of 150K-250K engeniers

• Annual market growth is around 15K graduates• Market seems to be very competitve, so to hire good

resources we will need to propose really good conditions

• Poor amount of ready Magento developers

https://goo.gl/ESCdUJ - if you would like to play with data presented on graphicshttp://rynekpracy.pl/raporty_1.php/wpis.42 - Polish IT market report

Costs reviewSources:

http://hrstandard.pl/wp-content/uploads/2015/03/raport_placowy2015_s.pdf - HAYS Labor Market review

http://www.paiz.gov.pl/publications/labour_market - Polish Information and Foreign Investment Agency

http://www.colliers.com/-/media/files/emea/poland/reports/2013/colliers-poland-q3-2013-office-market-en.pdf?la=en-US - Office Market

http://www.numbeo.com/ - cost of living comparison

Salaries

Type of Employee Average Gross Salary*, EUR

Project Manager 3600 Eur

PHP Developer 2150 Eur

Frontend Developer (JS) 2600 Eur

System Archytect 3800 Eur

QA Specialist 2150 EUR

* As far as I found, the main common way of employment in Poland is working contract or B2B employment, when “employee” has own established company. Need to be clarified with locals.

+25% for Warsaw region

Office rent

City Min (EUR/m2) Max (Eur/m2)

Warsaw: City Centre

17 25

Warsaw: outside Centre

12 16

Wroclaw 13 15

Krakow 11 16

+ 23% VAT and public services cost

Cost of living (important for import of developers from Ukraine)

Relocation to Poland will decrease the level of life for Ukrainian developer even if company

will compensate the taxes increase.

Wroclaw and Krakow are bit less expensive.

Cost of company setup

Establishing of a new company 1700.00 EUR10 employees assistance 1200.00 EURWork permission 300.00 EUR per person

SWOT

Strengths Weaknesses

• Healthy IT Market• Ability to find good

resources• Stable country and

economy• Less expensive comparing

to other EU countries

• Not a lot of Magento resources

• Very competitive market• Taxes are bit expensive

Opportunities Threats

• Relocation of CIS developers

• Local sales (only one official Magento partner as competitor)

• Invest to juniors

• Decrease of life level for CIS developers difficult to convince for relocation

• Difficulties to sale Magento

Review conclusion

Poland is an interesting location to setup nearshore development office. Local market to sale Magento services is less interesting today, but can have a good growth in next years.

Warsaw is the best location for doing business, there are 2.5 more developers on the market comparing to other IT cities. This location is less risky for office setup but will cost 20-30% more. Krakow and Wroclaw will be better for import of CIS developers, if it will be chosen as main strategy.

Questions?

Semor@opsway.com