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A potential headquarter of ENEMO

Report by ISFED Written by Mariam Chubabria

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Contents Comparing office location in Tbilisi and Warsaw ........................................................................ 3

Office in Tbilisi....................................................................................................................... 5

Tbilisi - a Brief Summary ........................................................................................... 5

History and importance .................................................................................................. 5

Geography and Climate ................................................................................................. 6

Government and Political stability .................................................................................. 6

Economy and Currency .................................................................................................. 7

Population and Language .............................................................................................. 8

Coming to and from the city ........................................................................................... 8

Living in Tbilisi ............................................................................................................... 9

Visa Issues and work permit .......................................................................................... 9

Establishing an organization ....................................................................................... 3

Documents needed for registration ................................................................................ 3

Bank account ................................................................................................................. 4

Taxation ......................................................................................................................... 4

Office rental costs and staff salaries ............................................................................... 5

Labor Code .................................................................................................................... 5

Office in Warsaw .................................................................................................................... 8

Warsaw – General overview ........................................................................................... 8

History and importance .................................................................................................. 8

Geography and Climate ................................................................................................. 9

Population and Language .............................................................................................. 9

Government and Political stability ................................................................................ 10

Economy and Currency ................................................................................................ 11

Coming to and from the city ......................................................................................... 12

Living in Warsaw .......................................................................................................... 12

Visa Issues and work permit ........................................................................................ 14

Establishing an organization ..................................................................................... 15

Documents needed for registration: ............................................................................. 15

Bank account ............................................................................................................... 16

Taxation ....................................................................................................................... 17

Office rental costs and staff salaries ............................................................................. 18

Labor Code .................................................................................................................. 19

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Comparing office location in Tbilisi and Warsaw

In order to define which city would be more suitable for establishing ENEMO headquarter,

several criteria has been chosen for comparing the two cities- Tbilisi and Warsaw. The

criteria are as following: political and economic situation, office costs, registration

procedures, banking, taxation, flight connection, work permit, location of donors.

By evaluating country’s economic and political profile, it is clear that Poland ranks higher

than Georgia- a state not yet a member of the EU or NATO. Poland is a stable democracy

with growing economy. It is part of the European Union since 2004 and NATO since 1999.

According to the Freedom House Index it is Consolidated Democracy, which possesses the

attributes of stability and continuity in governance that characterize a mature democracy. On

the other hand, Georgia is not yet a member of the Euro-Atlantic Unions (the EU and NATO)

and it still suffers from unresolved territorial dispute with Abkhazia and South Ossetia.

Furthermore, according to Freedom House, Georgia is classifies as Partly Free, where most of

the issues are politicized by rivalry political parties. In addition, for past several month due

to economic decline in the neighboring countries, Georgian Lari has suffered a significant

devaluation and it dropped its value against US dollar.

Both capitals have impressive number of representations of international organizations and

country. However, important to note, that Warsaw is located close to Brussels where are

located the EU institutions, headquarters of many international organizations and

representations of initiated organizations. Furthermore, Warsaw is hosting the office of

OSCE/ODHIR, a valuable partner of ENEMO in the sphere of elections. On one hand, it

would be useful to see ENEMO’s active collaboration with ODHIR, but on the other hand,

establishing an organization in the region where there is no similar organization operating is

useful for spreading the principle of fair elections East from the central Europe.

Warsaw is better connected by air transportation to the rest of the work compared to Tbilisi.

According to tripadvisor.com every week there are at least 357 domestic flights and 2,254

international flights depart from Frederic Chopin Airport. Furthermore, there are nonstop

flights to 98 cities from Frederic Chopin Airport, among those are even the cities over

Atlantic. Moreover, Warsaw is better connected with other European capitals via land

transportation network. On the other hand, Tbilisi represents a geographical center of the

ENEMO member states and flight connections can be available to the Central Asian

countries.

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Big advantage of establishing an office in Tbilisi is its cost efficiency, as the prices are almost

twice cheap compared to the prices in Warsaw. The cost of rent in Central Business District

in Tbilisi is €13-17, while in Warsaw it is € 26-27. While comparing utility costs in these two

capitals, the cost per square meter in Tbilisi is €1.7, while €2.19 in Warsaw. However, the

number of A+ building is relatively few in Tbilisi, which narrows the choice of consumer.

Moreover, the salaries for the local staff in Georgia are considerably smaller than in Poland.

Based on various sources, overall salaries in Tbilisi and Warsaw can be seen as following:

Position Tbilisi* Warsaw

Executive director € 1,669 € 3140

IT Administrator € 779 € 2,178

Financial Manager € 1,113 € 4,115

Project Manager € 628 € 3,605

Accountant € 300 € 1,090

PR manager € 1,113 € 3,140

Junior Lawyer (Law firm) € 440 € 1,331

* Average gross salary in Euro per month.

Requirements for the registering an organization and opening a bank account are nearly

similar in both countries. However, the costs of the services are relatively high in Poland.

The cost of registering an office in Georgia is €40, while in Poland €120.

In general, VAT ration is lower in Georgia. In Poland VAT is 23%, while in Georgia-18%.

On the other hand, Georgian workers do pay higher income tax then in Poland (20% in

Georgia, 18% in Poland). In Georgia, if an organization presents a document that it receives

the grant from the foreign funds, it is exempt from VAT.

Moreover, there are similar regulations for obtaining short term visa and residence permit.

Due to recent amendments to the Law of Legal Status of Foreigners and Stateless Persons,

the visa related procedures became approximated with the EU regulations. However,

compared to the EU member states, the costs for the same service is relatively cheaper in

Georgia. Obtaining a residence permit in Georgia costs €83, while in Poland- €166.

Moreover, it is easier to obtain short term visa in Georgia as it can be done through online

application.

Based on the overviews of the capitals of Georgia and Poland, it can be concluded that both

cities have features for which they can be evaluated positively or negatively for hosting

headquarter of ENEMO and it is up to ENEMO board to decide which city they would prefer.

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Office in Tbilisi

GEORGIA

Population 4.59m (2010)

Territory 69,700 square kilometers

Neighbor states Azerbaijan, Russia, Turkey, Armenia

Capital Tbilisi (pop. 1,500 000)

Currency Georgian Lari (GEL)

Language Georgian

Major religion Orthodox Christianity

GNI

Political system Parliamentary Republic

President- Giorgi Margvelashvili

Prime Minister- Irakli Garibashvili

Chairmen of Parliament- David Usupashvili

Tbilisi - a Brief Summary

History and importance

Founded in the 5th century, Tbilisi, located in Eastern part of Georgia, serves as a capital of

Georgia for many centuries. Due to its old history and geographic location, Tbilisi has

become an important political, business, and cultural center of the region. The government of

the state, the Presidential Residence, and part of the parliamentary work is conducted in

Tbilisi. Moreover, most of the businesses are managed from Tbilisi and represent 70% of

share in Georgia’s economy.

Furthermore, many international organizations, companies and embassies/consulates have

their representations in Tbilisi. To mention few, following organizations have offices in

Tbilisi:

USAID - United States Agency for International Development, EU special

representative in South Caucasus, European Bank for Reconstruction and

Development, World Bank, United Nations Representative in Georgia and its

respective agencies: UNDP, UNICEF and UN Women, The WHO Country

Office, Open Society - Georgia Foundation, International Organization for

Migration: Mission to Georgia, Swiss Agency for Development and

Cooperation's Humanitarian Aid Office, Care International in the Caucasus,

Heinrich Boell Foundation’s Regional Bureau in South Caucasus, Friedrich

Ebert Stiftung representative office in Georgia, Friedrich Naumann

foundation for liberty - representative in Georgia, Georgian Red Cross

Society, Konrad Adenauer Fund and others.

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Geography and Climate

Tbilisi is lying on both banks of Mtkvari River and is surrounded by mountains from three

sides. Allocated 380–770 meters above sea level, Tbilisi has a humid subtropical climate with

warm to hot summers and relatively cold winters. An average daily high temperature during

summer is above 27°C and during winter- below 10°C.

Government and Political stability

After collapse of the Soviet Union,

Georgia restored its independent in 1991

and went through transition period

towards establishing democratic

governance. Since the Constitutional

change in 2012, Georgia is a

parliamentary republic, where the head

of the state is President and the head of

the government is Prime Minister and

where the legislative power is in hands

of Parliament comprising of 150

members, elected in a mixed electoral system (77 members are elected based on party lists

and the remaining 73 single-mandate majoritarian).

Since the parliamentary elections in 2012 and presidential elections in 2013 “Georgian

Dream” coalition led by Georgia’s richest man, Bidzina Ivanishvili, swept power from United

National Movement (party ruling for nine years since Rose Revolution in 2003). Currently,

the members of the “Georgian Dream” are holding the majority of seats in parliament and in

the ministerial cabinet; moreover, the president was nominated by the same party as well.

Despite the fact that in 2012 “Georgian Dream” managed to gain massive public support, it

was not able to meet the expectations of local population. According to the latest NDI public

opinion survey approximately half of the population thinks that the problem of

unemployment and poverty has worsened since 2012. On the other hand, the government was

successful in reforming the health care system and in ensuring freedom of speech and

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improving the minority issues. Moreover, in 2014 Georgian government signed the

Association Agreement with the European Union and continues to pursue reforms for

establishing visa liberalization and Deep and Comprehensive Free Trade with the European

Union.

For many years, Georgia is doing relatively well in terms of fighting corruption. Georgia is

ranked 50th among 175 countries with the score of 52 (out of the maximum 100) in the

Corruption Perceptions Index (CPI) by Transparency International. Georgia ranks

highest among the 19 countries of Eastern Europe and Central Asia and it also scores higher

than a number of EU member states: the Czech Republic, Slovakia, Croatia, Bulgaria,

Greece, Italy and Romania. However, Georgia still is nominated as partly free democracy

according to the Freedom House Indexation.

Economy and Currency

GDP 2014 $16.5 bln.

GDP real growth rate 2014 +4.7%.

GDP per capita $3, 681

FDI inflows 2014 $ 1, 272, 5 mln.

Unemployment rate 14.6 %

Georgia boasts years of high economic growth, liberal tax and labor legislation, business

friendly practices, low corruption, high security and openness to foreign investment. The

World Bank rated Georgia as the 15th easiest place in the world (among 189 countries) to do

business in 2015. Heritage Foundation ranked Georgia 22nd (among 179 countries) for its

economic freedom in 2013.

Georgia has its own currency- Georgian Lari (GEL) and it is the only permitted instrument

for settlements within the territory of Georgia. According to the Decree of the President of

Georgia No. 363, dated September 16, 1995, “all legal and physical entities are obliged to

estimate all prices for products and services, prepare declarations and calculations within the

territory of Georgia only in national currency, which is Lari”.

Due to economic crisis in the region, Georgian Lari drastically depreciated against the US

dollar; however, it is important to note, that Lari has been relatively stable to euro.

2.34 Gel per 1 USD (20 May 2015)

2.61 Gel per 1 EUR (20 May 2015)

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Population and Language

Roughly 1.5 million inhabitants live in Tbilisi. Most of them are Eastern Orthodox Christians

ethnic Georgians. However, at various times, Tbilisi has been home to people of diverse

cultural, ethnic, and religious backgrounds (Armenians, Jews, Russians, Germans and others).

Official language in Georgia is Georgian language. In addition, most of Georgians either

communicate in Russian or in English. It is common for people over forty to be fluent in

Russian and younger generation - in English. Furthermore, significant number communicates

in German, in French and in Turkish.

Coming to and from the city

Tbilisi is located in the geographical center of ENEMO and it is connected to the main

capitals via direct or indirect flights. Traveling from airport to the city center is an

inexpensive trip. Tbilisi Airport is located 17 kilometers (11 miles) southeast of the city and it

takes approximately 30 minutes to get there from the city center. Passengers can use either

taxi or a public transport- bus or train, to travel to and from the city.

The price of taxi ride is $3-5, depending on where you go.

The Airport railway station is located 70 meters from the airport building and travels

to the Tbilisi Central Railway Station in 20 minutes. The trains leave the airport

station at 8:45 AM and at 6:05 PM and leave from Central Railway Station at 7:55

AM and at 5:20 PM. A price of a ride is 0.50 GEL.

The bus number 37 stops in front of the Arrival hall and serves the passengers from 7

AM till 11 PM. Cost of the ride is 0.50 GEL.

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There are regular flights from Tbilisi to Istanbul, Kiev, Baku, Minsk, Warsaw, Donets,

Almaty, Athens. The prices of average cheapest flights from closer capitals are as following:

Istanbul to Tbilisi - £59

Moscow to Tbilisi -£135

Kiev to Tbilisi - £83

Dubai to Tbilisi - £126

Tel Aviv to Tbilisi - £138

Baku to Tbilisi - £127

Munich to Tbilisi - £185

Ashgabat to Tbilisi - £383

Baghdad to Tbilisi - £271

Warsaw to Tbilisi - £81

Paris to Tbilisi - £178

Minsk to Tbilisi - £108

Furthermore, Tbilisi is connected to Yerevan and Baku by railway.

Living in Tbilisi

Compared to the cost of living in any EU-28, Tbilisi is relatively cheap city. According to the

ranking by fDi intelligence, presented in “European Cities and Regions of the Future

2014/2015”, Tbilisi is Europe’s second major city in terms of Cost Effectiveness. For

example, prices for a meal in inexpensive restaurant costs 10 GEL ($5) and three-course meal

in mid-range restaurant 40 GEL ($20). Intercity transportation by taxi is 5-10 GEL ($2.5-5).

Renting a one bedroom apartment in the city center costs 700 GEL ($310), outside of center-

440 GEL ($190); while 3 bedroom apartment in the city center costs-1,700 GEL ($750) and

outside of the center- 1000 GEL ($440).

Parking in Tbilisi is managed by City Park. The company has defined parking sports all over

the city and it charges drivers 50 GEL ($22) for a year, 25 GEL ($11) for 6 month, 4 GEL

($1.8) for per week. This service allows drivers to park at parking places 24 hours all over the

city!

Visa Issues and work permit

The foreign citizens traveling to Georgia may need either a short-term or a long-term visa.

Those who want to visit Georgia for the touristic purposes or for business trip (for up to 90

days in any 180 day period) should apply for short-term visa, while those who need to obtain

a residence permit need a long-term visa.

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Government of Georgia has issued a permit for some country citizens to obtain visa-free

entry to Georgia for 90 days in any 180 day period. Citizens of the ENEMO member states,

except for Macedonia, can benefit from this condition.

Those foreign citizens who need to apply for short term visa can easily do it through

applying online. With this innovative tool, there is no more need of visiting the Georgian

Embassy for obtaining a short term visa. foreign citizen can obtain a E-Visa by filling the

online application form and paying with credit/debit card. After receiving a visa through

email, bring the printed version along when you travel to Georgia. The process of obtaining

short-term visa takes 10 calendar days. For more information about E-visa please check this

webpage.

Those foreign citizens who are visiting Georgia to conduct labor activities; representatives,

consultants of companies or firms visiting Georgia to perform work duties; foreign nationals

who visit Georgia on the basis of labor contracts shall obtain a long-term, immigration, or

D category visa. This type of visa is issued with the right of multiple entry and exit, and is a

precondition for issuing a residence permit and for diplomatic accreditation. Residence

permit is issued to a foreign citizen, wishing to say in Georgia for more than 90 days and up

to 6 years. To apply for long term visa a foreign citizen can apply to diplomatic missions and

consular offices of Georgia abroad. In case there is no diplomatic mission or consular

office of Georgia in their country of citizenship aliens can apply for a Georgian visa to the

diplomatic mission or consular office of Georgia in neighbouring countries.

In order to apply for a residence permit an enquiry shall be done while being in Georgia.

Applications are made at the LEPL Public Service Development Agency within the Ministry

for Justice of Georgia and at branches of the LEPL Public Service Hall. The process of

obtaining residence permit takes approximately 30 days. Once a Residence Permit has been

issued, the process to obtain an Residence ID Card takes a further additional 10 days.

Terms State Duty

On 30th day 210 GEL

On 20th day 330 GEL

On 10th day 410 GEL

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Establishing an organization

Documents needed for registration

The House of Justice of Georgia requires following documents from registering an

organization:

1. Duly certified Charter of the member organization.

2. In case the legal entity is not registered in Georgia, the founding document, such as

charter and proof of registration with certified translation should be provided.

3. ENEMO’s members should present minutes of the meeting, showing their consent to

establish the headquarter of ENEMO and to appoint a representative in Georgia as a

signatory.

4. If entrepreneurial or non-entrepreneurial (non-commercial) legal entity is registering on

the address different from the one indicated in the ID card of partner / founder, manager/

representative and which is not the property of above-mentioned people, additionally the

owner's consent is requires or a duly drawn up and approved contract to use this property

(lease, rent, lending agreement, etc.).

5. Receipt of the registration fee payment- 100 GEL ($43 ) (on the same day 200 GEL

($86)) (payment may be done on spot);

6. A copy of ID card of a signatory.

On case by case basis, additional documentation or information may be requested to make a

decision on given case.

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Bank account

Banking system remains to be sound and stable part of Georgian financial system. In 2013

twenty-one banks are registered in Georgia. Among those, according to the KPMG and IMF

reports, four are named as the largest commercial banks in Georgia: Bank of Georgia, TBC

Bank, ProCredit Bank and Liberty Bank.

Opening a new bank account is relatively easy. Just few documents are required for opening

an account of Non-entrepreneurial (non-commercial) legal entities in Georgian banks. Bellow

is enlisted the requirements from TBC bank, which is relatively same for other organizations

as well:

1. Extract from the Register of Entrepreneurs or Non-Entrepreneurial (Non-commercial)

Legal Entities;

2. Notarially certified registration application/ or charter (agreement of founders and

members) of non-entrepreneurial (non-commercial) legal entity;

3. Authorized representative’s application (Annex 2-187, 2-187-1) on founder holding

25% or more shares in the Company, together with the copies of their personal

identification documents (ID cards or passports);

4. Signature sample of the manger of non-entrepreneurial (non-commercial) legal entity

and signature samples of all proxies authorized to manage an account (certified

notarially or by an authorized employee of the bank);

5. Originals of personal identification documents (ID cards or passports) of the manger

of non-entrepreneurial (non-commercial) legal entity and of all the persons authorized

to manage an account, which shall be certified by employee of the bank.

Taxation

The residents or non-residents of Georgia who receive wages or other forms of compensation

from Georgian source are due to pay taxes. Personal income tax in Georgia is 20%.

International organization may obtain a VAT exemption right from the Georgian tax

authorities as long as it presents the VAT exemption certificate from its donor organization.

VAT in Georgia is 18%.

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For more information on taxation in Georgia please check the “Guide to taxation and

investment in Georgia 2015” by Deloitte or “Pocket Text Book” by Minister of Finance of

Georgia.

Office rental costs and staff salaries

Estimated costs per month

USD

Transferred

amount

Tax 20%

Net

Office rest 1875/ €1668 375 1500

Utility 400/ €356 0 400

Communication 150/ €134 0 150

Executive director 1875/ €1669 375 1500

Financial manager 1250/ €1113 250 1000

PR manager 1250/ €1113 250 1000

Project coordinator 875/ €779 175 700

IT Administrator 875/ €779 175 700

Labor Code

The relationship between employer and employee in Georgia is regulated by the Labor Code

of Georgia, unless they are otherwise governed by other special law or international

agreements of Georgia.

The form of a labor agreement shall be oral or written, fixed-term or open-ended;

However, according to the recent change in the Labor Code the employer is allowed to

conclude a labor contract only in limited cases, when it is related to: fulfilling a concrete job;

seasonal work; temporary increase in the amount of work; replacing an employee during

his/her temporary absence;other objective circumstances. A written labour agreement shall be

concluded in a language understandable to the parties and it can be concluded in several

languages.

In case the employer invites employee for a trail period their relationship should be

determined by written agreement. The trial period should not exceed six month. In case the

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employeer terminates a trial period, the labor of employee shall be compensated in proportion

to their time worked.

The Law allows change of terms and conditions of labor agreement; however essential

conditions of a labour agreement may only be changed by agreement of the parties.

The signing parties can determine internal labour regulations, as long as it does not

contradict an individual labour agreement or a collective agreement or this Law.

The duration of working time should not exceed 40 hours a week; and the duration of

working time in enterprises with specific operating conditions requiring more than eight

hours of uninterrupted production/work process must not exceed 48 hours a week. Working

time shall not include breaks and rest time. The duration of rest between working days (or

shifts) must be at least 12 hours.

The terms for overtime work shall be defined by an agreement; however the period of

overtime should not exceed 40 hours a week for adults and an agreement should define the

type of compensated whether it will be through increasing the amount of hourly pay rate or

by granting additional time off to an employee in return for overtime compensation.

The terms for the paid and unpaid leave defines that an employee shall have the right to

enjoy a paid leave of absence of at least 24 working days annually and an unpaid leave of

absence of at least 15 calendar days annually; However the employer is allowed to introduce

different conditions as long as they do not worsen conditions of an employee. According to

the law,

An employee shall have the right to request a leave of absence after having worked for 11

months; however, an agreement between the parties may define even shorter period. An

employee’s leave pay shall be determined by the average pay for the previous three months.

Georgian Labor Code defines the terms of maternity and child care leaves. According to

the Law an employee shall be granted maternity and child care leaves of absence of 730

calendar days; Maternity and child care leaves shall be paid for the period of 183 calendar

days and in case pregnancy complication – 200 calendar days. The Government of Georgia is

responsible for covering the amount of maternity or child care leaves of absence, as well as

for newborn adoption leaves of absence of up to GEL 1000. Employers and employees may

agree on extra pays.

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Remuneration shall be paid out once a month. An employer shall be obliged to pay an

employee 0.07 per cent of the delayed sum for each day of any delayed compensation or

payment. Unless otherwise defined by a labour agreement, an employee shall be fully

remunerated for the downtime due to the fault of an employer. Downtime due to the fault of

an employee shall not be remunerated.

When terminating a labour agreement on any of the grounds under Article 37(1)(a, f, i, n)

of this Law, employers shall be obliged to notify employees about it in writing at least 30

calendar days in advance. Besides, employees shall be granted a severance pay of at least one

month salary within 30 calendar days. If the employer terminates a labour agreement at least

three calendar days in advance, employees shall be granted a severance pay of at least two

months’ salary within 30 calendar days. In case employee is terminating the contract

employees shall be obliged to notify employers about it in writing at least 30 calendar days in

advance.

For more information please find Labor Code of Georgia in English.

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Office in Warsaw Poland

Population 38 495 659 (2014)

Territory 312 679 km2

Neighbor states Belarus, Czech Republic, Germany,

Lithuania, Russia, Slovakia, Ukraine

Capital Warsaw

Currency EUR

Language Polish

Major religion Roman Catholics

GNI 878 billion PPP dollars

Political system Parliamentary Republic

Warsaw – General overview

History and importance

Warsaw is the capital of the largest country in Central and Eastern Europe-Poland. Despite

the large distraction inflicted on the city in WWII, it was possible to preserve a small part of

picturesque historic city center of Polish capital. Since 1980 it is considered as a UNESCO

World Heritage site. Since the end of the War, Warsaw has gained many new modern

buildings and numerous sky scrapers, which has transformed Warsaw into ambitions, future-

oriented European city.

With the population of 1.717 million, Warsaw represents an important cultural, economic and

political center of Poland. The major governmental institutions, numerous think tanks and

international organizations are allocated in Warsaw. These international organizations located

in the capital are:

United Nations High Commissioner for Refugees; Organization for Security and Co-

operation in Europe; Office for Democratic Institutions and Human Rights; IOM

International Organization for Migration Office in Poland; World Health Organization

Regional Office for Europe; The World Bank; International Monetary Fund;

International Finance Corporation; Regional Office for Central Europe; European Bank

for Reconstruction and Development; European Investment Bank; European Commission

Representation in Poland.

Furthermore, Frontex, the European Union agency for external border security, has its

headquartered in Warsaw.

The ministry of foreign affairs of Poland provides an extensive list of international missions

in Poland.

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Geography and Climate

Warsaw is located in the Central-East part of the country and Berlin and Baltic Sea are in

close distance from there. Built on Masovian Plain, the city is cut through by Vistula river-

the longest and largest river in Poland.

Warsaw is generally a humid city; it has a cold winter with temperature ranging from -4°C to

up to +6°C and a warm summer with weather between +9°C -22°C. In January, minimum

temperature can drop till -20° C and on the hottest day of a year the temperature may reach

+35°C.

Located in the Central Europe, Poland is one hour ahead of standard GMT. In the end of

March till the end of October, it usually changes its daylight saving time.

Population and Language

Poland is the most linguistically, ethnically, and religiously homogeneous country in

European: 98.2% of Polish citizens speak Polish language- the West Slavic branch of Slavic

languages, 96.9% are ethnically Polish, and 87.2% are Roman Catholic.

Polish people living in the big cities and those working with foreign counterparts usually

speak second language, which mainly is English. Important to note, that mostly younger

people speak English, whereas people of elderly generation speaks German in Western

Poland and elderly generation from Eastern Poland speaks Russian.

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Government and Political stability

Leaving behind its Communist rule, Poland formed the Third Republic in 1989 and engaged

into a democratic transition process. With the establishment of the Third Republic, Poland

transformed into a parliamentary republic, where the Prime Minister is the head of a

government, the President is the head of state, and the Parliament (Sejm) is a legislative body

of the country.

The successful transition to liberal market and democratic rule, allowed the country to join

the Euro-Atlantic political institutions. Poland joined the NATO in 1999; became a member

of the European Union in 2004; entered the Schengen Area in 2007. Moreover, the economic

policy of liberalization allowed Poland to reach its pre-1989 GDP level already by 1995 and

to preserve its economic stability even during economic crisis in 2008.

Poland is considered as strong Atlanticist country, which supports strong NATO presence in

Europe; condemns Russian military activities in Ukraine, and supported economic sanctions

against Russia.

After the years of the EU membership the Polish politicians have socialized with the Brussels

political elite, thereby increasing Polish influence in Brussels. Moreover, Polish membership

in the European political and economic Union has significantly increased strategic

importance and economic stability of Poland. That is why it is not surprising that 60 plus

percent of Polish population supports the EU.

Successful economic reforms conducted by the ruling party- Civic Platform (Christian

democratic, and liberal political party in Poland.) since 2007 up to now, has allowed this

economically liberal and socially centrist party to be re-elected for the second term in 2011.

Currently, the government of Poland is led by the Ewa Kopacz from the Civil Platform;

however, the recent presidential election has shown that the public support towards the Civil

Platform has decreased. Andrzej Duda, representative of Law and Justice- the second-largest

party in the Polish parliament, won the presidential election in May 2015. The loose of Civil

Platform candidate in the elections, reflects the possibility of change in power. More so as the

preliminary polls showed that the candidate of Law and Justice Party would have more

supporters than the Civil Platform.

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Economy and Currency

Poland has the largest economy in Eastern and in Central Europe and it is the sixth-largest

economy in the European Union. Since the dissolution of the Iron Curtain, Poland switched

its economy from planned economy to free market economy. The conducted reforms and

huge foreign assistance allowed Poland to double its living standards compared to the ones in

1989 and to reach 62 percent of the level of the prosperous European countries. Moreover,

Poland was the only EU state which managed to overcome the European economic crisis in

2009 and to preserve its positive economic growth. Successful monetary policy and booming

economy, has allowed Poland to preserve an effective exchange rate and to avoid inflation.

Important to note that by joining the European Union, Poland has extensively benefited from

the EU cohesion Funds, which allowed it to advance its infrastructure, agricultural sector and

to increase investment in educational funds.

Currently, Polish Złoty (PLN) is the official currency in Poland. According to the official

figures by the European Central Bank, the exchange rate in June of 2015 is 1.00 EUR to

4.1497 PLN. Best place for converting money is in kantor (exchange office), they have no

commission charges and the exchange rates are better compared to banks.

The topic of euro introduction remains controversial in Poland. Despite strong economic ties

with the European Union and the Maastricht criteria requirement, Poland is still reluctant to

join the Eurozone. Majority of Poles and politicians, whose support is needed for the

constitutional change in Sejm, are against adopting euro, which makes the process even

gloomier.

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Coming to and from the city

Being in the center of the country, Warsaw is well connected to the rest of the Polish cities

and with the world’s other capitals. Two international airports are serving the passengers

traveling to Warsaw: Frederic Chopin Airport (situated 10 km from the city centre) and

Modlin Airport (40 km from the city centre). There are nonstop flights to 98 cities from

Frederic Chopin Airport, among those are even the cities over Atlantic. According to

tripadvisor.com every week there are at least 357 domestic flights and 2,254 international

flights depart from Frederic Chopin Airport. Among those flights the most popular are flights

by Lufthansa Airlines and two cheap airline companies Wizz Air and LOT.

Furthermore, Poland has well developed railway network. One can travel from Warsaw to all

Polish provinces and numerous European capitals, including Berlin, Moscow, Vienna,

Budapest, Prague and Vilnius. Traveling by a car is an option as well. Moderns and fast

highways can bring passengers to Warsaw from all major European cities.

Living in Warsaw

With around 30 theatres and 60 cinemas, Warsaw was ranked as the 32nd most liveable city

in the world by the Economist Intelligence Unit in 2012.

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Living in Poland is relatively cheap, compared to the Northern and Western European

capitals. According to the Numbeo data, the prices for the rent in Warsaw are as following:

Apartment (1 bedroom) in City Centre 1,944.01 zł ≈468 euro

Apartment (1 bedroom) Outside of Centre 1,517.52 zł ≈366 euro

Apartment (3 bedrooms) in City Centre 3,531.58 zł ≈851 euro

Apartment (3 bedrooms) Outside of Centre 2,355.76 zł ≈ 568 euro

Regarding the accommodation in the hotel, there are more than 43 five star hotels in Poland.

The most renowned from which are: Accor, Best Western, Campanile, Hilton, Holiday Inn,

InterContinental, Marriott, Novotel, Qubus, Radisson Blu and Sheraton. In Warsaw you can

find all sorts of cuisine, from traditional Polish to Mexican and Chinese. As estimated by

Numbeo data a meal in an inexpensive restaurant costs 20.00 zł (5 euro) and meal for two

persons in mid-ranged restaurant with three-courses costs 100zł (24 euro).

Warsaw has well tailored public transportation system, where buses, trams, and two lines of

trains (West-East and South-North) run regularly. Inhabitants of Warsaw can use the public

transport even after the midnight, as the night buses run on most routes twice every hour.

Purchasing a ticket is possible from some kiosks with RUCH logo, or anywhere with a sign

reading Bilety. English speaking tourists or temporary residents can as well make a use of

ticket machines with English instructions. Additional information regarding the public

transportation can be seen on the web-page of Warsaw’s Public Transport Authority.

Important to remember, that the public and some private institutions are closed on national

holidays. These days are:

1st January – New Year’s Day

6th January – Three Kings Day (The Epiphany)

1st April 2013 – Easter Monday (date changes year to year)

1st May – International Workers’ Day

3rd May – May-3rd-Constitution Day

30th May 2013 – Corpus Christi (date changes year to year)

15th August – Assumption of Mary

1st November – All Saints Day

11th November – Polish Independence Day

25th December – Christmas (1st day)

26th December – Christmas (2nd day)

14

Visa Issues and work permit

Several bilateral or international agreements allow citizens of other countries to visit Poland

without having visa and staying there for less than 90 days. As Poland is part of the Schengen

zone it allows the EU citizens to freely travel to Poland and to work there for a defined time

period (for less than 3 month). Moreover, based on bilateral agreements, citizens of Brazil,

Israel, Japan, the USA, and others can travel to Poland without a visa and stay there for less

than 90 days. Furthermore, the citizens of European countries, not part of the EU - Albania,

Bosnia and Herzegovina, Macedonia, Montenegro, and Serbia can travel to Poland without

obtaining a visa if they hold biometric passports. Extensive list of the countries not requiring

visa to enter Poland can be seen here. On the other hand, the non-EU citizens or citizens that

are not from the above mentioned states need to apply for short-term (up to 3 months) or

long-term visas (maximum of up to 12 months).

The foreign national, visiting Poland even for short-term stay, need to register in at the

appropriate registration office (Urzad Meldunkowy) during the three days after arrival. Those

how are staying with friends need to go to the registration office with the owner or tenant of

the flat at which you are staying and those staying in hotel, hostel etc. don’t need to worry,

this procedure will be done by respective institutions.

In case a foreign national (including a citizen of the Union) stays in Poland longer than for 3

month, s/he shall obtain a temporary residence permit or extend a visa. Temporary residence

permit is granted to the citizens of the European Union member states if a person:

• “intends to perform or performs work a profession or business activity on the

territory of Poland, or

• has health insurance and sufficient resources to cover his/her expenses without

the need of social security support, or

• is a student or a trainee, or

• intends to join his/her family residing in Poland”.

On the other hand, a temporary residence permit (from 3 months up to 2 years) is

granted to non-EU citizens when a citizen:

• “intends to perform or performs work or a free profession or business activity

on the territory of Poland, or runs a business under Polish law;

runs a business under Polish law;

is a student or a trainee (in this case a residence permit up to 1 year applies),

or

15

• intends to join his/her family residing in Poland.

The cost of issuing a permit is 640zl plus 50zl for a residence card (in total €166).

The foreign company registered in Poland will have to apply for a work permit for

his Polish or foreign employee.

Establishing an organization

Documents needed for registration:

According to the definitions given in the Law on law on Public Benefit Activity and

Volunteerism, ENEMO will have a right to function in Poland as a Foundation. According to

the Law a foundation is a non-governmental entity, which is a legal entity legal entity and has

a possibility of conducting economic activity (apply for grants and funding).

In order to register a foundation special documentation should be submitted to the Polish

National Court Register. Due to the recent amendments to the Act on National Commercial

Register, the registration proceedings have become easier and faster. The number of required

applications and documents has decreased, respectively, decreasing the costs as well. To be

more precise, once the organization obtains a National Court Register number (KRS), it does

not have to apply separately for the tax registration number (NIP) and statistical identification

number (REGON), they will be issued automatically.

In order to register as a foundation, the founding committee must deposit following

documents:

the statute;

the address of the temporary seat;

a list with all the founders and their details;

the procedure under which the founding committee was elected.

Important to note that the statute of the organizational should contain the following

information: it’s unique name, the address and place of actions, the objectives and methods of

achievements, the conditions of approving and dismissing members, the rights and

obligations of the members, the managing bodies and modalities to appoint it members and

16

their rights and obligations, methods of achieving capital and the member’s dues, ways of

amending the statute and method of liquidation.

The registration is free of charge, while the information on obtaining the status shall be

announced in the Court and Economic Monitor, which involves an expense of 500 zloty

(€120). Furthermore, if an organization plans to engage in economic activities it shall have a

minimum deposit/capital of €265.

Bank account

According to the report by European Banking Federation, in 2011, there were 67 commercial

banks and a branch network of 574 cooperative banks in Poland. Furthermore, there are

almost 19,000 ATMs all across the country.

There are several

international banks located

in Poland, among which

you can find the most

common European banks.

While choosing between

various banks it is

important to remember that

even though most of them

have similar services the

prices for them varies.

Respectively, choice

should be made based on necessity of the organization. However, it is generally accepted that

PKO BP has the largest number of customers, mBanks is most renowned for its online

banking, and Getin Bank has the largest profit.

Opening a bank account in Poland is fast and cheap process. A Polish citizen has to provide a

passport or ID card, a postal address and sometimes additional documents; Foreign national

holding a residency permit in Polish shall present her/his passport and a residency card. For

opening an account for an organization, the ID card or passport of directors, specimen

signatures of director and copy of some official company documents should be presented.

17

The costs related to the maintenance of the account vary according to the services you want

to have; however, the basic monthly payment depending on bank would be 15 to 20 PLN (€

3.5-5) for an account.

Regular banking hours are from Mondays to Fridays from 9 AM to 4 PM, and 9 AM. to 1 PM

on Saturdays.

Taxation

In Poland the personal income taxes are classified according to the amount the person earns.

If a person earns up to 3091 PLN there are no taxes to be paid; however if his annual salary

amounts 3091-85.528 PLN ($835- 23,125) s/he contributes 18% of his or her salary to the

state budget and 32% if one earns over 85.528 PLN ($23,125). The employer is responsible

to deduct income tax and social-security contributions from an employee’s salary.1

The standard VAT rate in Poland is 23 percent.

Based on the Polish tax law, an international organization operating in Poland shall be

exempt from paying taxes, if the IO receives funding from the governments of foreign states,

international organizations or international financial institutions, from nonrefundable aid

funds, including the funds of framework programmes for research, technical development

and presentation of the European Union and NATO programmes, granted on the basis of a

unilateral declaration or agreements concluded with those states, organizations or institutions

by the Council of Ministers, the competent minister or government agencies; including also

the cases whereby those funds are distributed through an agency authorized to distribute non-

refundable aid funds to beneficiaries”.2

According to the Law, Public benefit activity, an organization can gain a status of Public

Benefit Organization (PBO), if it shows that while its activities for past two years it has

“promoted human rights and freedoms, as well as activities supporting the development of

democracy”. Respectively, statues of PBO will allow ENEMO to be exempt from paying

corporate tax on income devoted to their statutory goals (Law on Corporate Income Tax (CIT

Law) 17.1c). For more benefits for PBO please check the “The Comparative Highlights of

1 http://europa.eu/youreurope/citizens/work/taxes/income-taxes-abroad/poland/index_en.htm

2 http://eatlp.org/uploads/public/Reports%20Rotterdam/National%20Report%20Poland.pdf

18

Foundation Laws: The operating environment for foundations in Europe 2011” by European

Foundation Center.

Office rental costs and staff salaries

The rental costs in Warsaw vary according to the location of the office. According to the

CBRE Research in 2012, a space for office in Central Business District costs EUR 26-27 sq

m/month, the price in non-Central locations (usually recorded in Mokotow) - EUR 15–16.5

sq m/month.

In addition tenant is due to cover the service charges and plus 23% VAT. This charges

include water, electricity, security, heating, air-conditioning, cleaning of common areas and

all other maintenance and operational costs of the building and common areas. Typical

service charges in Warsaw amount to EUR 3-6 /sq m/month and they are generally are paid

by the landlord, usually in PLN; sometimes in EUR. Three to six months' rental deposit or a

bank guarantee for six months' rent is typical. The tenant usually arranges with and pays

telecommunications suppliers as well.

Property taxes are paid by the property owner. Landlord is as well responsible for paying for

structural repairs, repairs to common parts, building insurance, local taxes and sewerage

charges.

Costs for parking vary in Warsaw between EUR 50–200 per month. The parking space is

calculated according to the parking ration: one space per 90–100 sq m in the Central Business

District; one space per 70 sq m in the City Centre, and one space per 25–30 sq m (with one

per 50 sq m acceptable depending on local public transportation) in non-central areas.

According to “the Market Overview and Salary Guide 2013” by the Hays Poland, the

monthly salary in PLN for respective positions is as following:

Position Min (PLN) Max (PLN) Avarage/Common

Project Manager 12 000 25 000 15000/ € 3, 605

PR Assistant 4 000 8 500 5 000/ € 1, 201

Accountant 3 000 6 500 4 500/ € 1,090

Financial Manager 15 000 20 000 17 000/ € 4,115

IT Administrator 6 000 13 000 9 000/ € 2,178

Junior Lawyer (Law firm) 3 500 8 000 5 500/ € 1,331

19

PR Manager 8 000 20 000 13 000/ €315

Administrative Director 10 000 15 000 12 000/ € 290

Office Manager 5 500 10 000 7 000 / € 1,695

Office Assistant 3 000 6 000 4 500/ € 1,089

Personal Assistant/ Executive

Assistant

5 500 10 000 7 000/ € 1,695

Labor Code

Labor law is regulated by the Labor Code (LC) of 26 June 1974, as amended. The Code

defines the rights and obligations of employees and employers, and regulates the

establishment, content and termination of the employment contract, the rights and duties of

the parties to the employment contract, employment benefits, vacations and leaves, protection

of employment, employment of women and minors, and settlement of labor disputes.

Employment contract should be in a written form.

The employees of the international organization operating in Poland are subject to the Polish

Labor Code as well, Under Regulation (EC) No 593/2008 of the European Parliament and of

the Council on the law applicable to contractual obligations (Rome I), it is possible to sign an

employment contract with a Polish citizen under foreign law; however, it does not mean that

foreign law is favorable than Polish law.

There are several types of employment contracts: a trial contract, a definite term contract, a

contract for the duration of a particular task, a replacement contract, an indefinite term

contract. Important to note that a trial contract may last up to 3 months and the fixed term

contract should not exceed two years.

As in most countries of Europe, the general working hours in Poland are 40 hours per week

and the time in between the working days should not be less than 11 hours, 35 uninterrupted

rest each week. An employee may not be ordered to do more than 8 hours of overtime work

within individual weeks and 150 hours of overtime work within one calendar year.

An employee is given 20 days paid leave if he is working less than 10 years, but if he is

working longer than 10 years, s/he is given 26 days per year for the vacation. An employee

can have an uninterrupted paid holiday or divide it into parts.

Female and male employees are given parental leaves as well. The duration of the maternity

leave depends on the number of children born at one time. Mother is given 20 weeks leave

20

when one child is born and 31 weeks when twins are born. Furthermore, since 2013

employees have been entitled to additional maternity leave (up to 6 additional weeks) and to

parental leave (up to 26 weeks). However, this period is not paid. The maternity leave is

covered by Social Insurance Fund and it amounts the average monthly remuneration paid

over the last 12 calendar months before the person became unable to work.

Since 1January 2015 minimum wage are in Poland is 1750 Zlot, approximately 420 euro.

Remuneration should be paid at least once a month, generally at the same fixed day. The

Polish Labor Code defines the terms of remuneration for the overtime work as well.

According to the Law, 50% of basic remuneration is paid to the employee who does an

overtime work on business days; 100%– for overtime work at night, overtime work on

Sundays and holidays.

It is important that in case of employment contract termination, both the employee and

employer are obliged to notify the respective party of terminating the contract

An employment contract is subject to termination, if both parties state their consent and

inform another party in a reasonable notification period. The notification periods for

employers and employees are as following: two weeks in advance if the employee is hired for

less than six month; one month earlier if employee has been employed for at least six months;

and three months in advance when the employee has been employed for at least three years.

On the other hand, the contracts which are for a limited period or for a specified task

automatically respectively terminate after the expiry of that period or on the date the task is

completed.

The employer may dismiss an employee without a notification when the employee has gross

violated the job duties; employee commits a crime which makes it impossible for him or her

to continue with his or her job duties; or when employee lost a necessary

license/authorizations, etc.

Any employee working in Poland is allowed to take four days off in each calendar year for

personal reasons. These days are not included in the official schedule of leave or in any other

holiday plans previously consulted with the employer and can be used separately or at once.

Reference

A Cushman & Wakefield Research Publication (2014 ) “Office Space Across the World”

http://www.cushmanwakefield.com/~/media/global-

reports/OSATW%202014%20Publication%20updated.pdf

21

Bridgewest: European Company Formation. Register a Non Profit Organization in Poland.

http://www.bridgewest.eu/article/register-non-profit-organization-poland

CBRE Research (2012) Poland: Office destinations

http://portal.cbre.eu/portal/page/portal/RRP/ResearchReportPublicFiles/CBRE_Poland_Offic

e_Destinations_Autumn2012.pdf

Central intelligence Agency (2014) Factbook: Poland

(https://www.cia.gov/library/publications/the-world-factbook/geos/pl.html)

Council on Foundations (2014) Poland.

ttp://www.cof.org/content/poland#Summary

Department of Public Benefit of Poland

http://www.pozytek.gov.pl/Basic,definitions,concerning,the,third,sector,553.html

Government of Poland (2003) the Law on law on Public Benefit Activity and Volunteerism.

http://www.usig.org/countryinfo/laws/Poland/Poland%20PBA.pdf

Government of Poland (1984) Law on Foundations

http://www.cof.org/content/poland#Summary

Majdańska, Alicja (2011) Taxation of non-profit organizations. University of Warsaw.

http://eatlp.org/uploads/public/Reports%20Rotterdam/National%20Report%20Poland.pdf

Numbeo (2015) “Cost of Living in Warsaw, Poland”

http://www.numbeo.com/cost-of-living/city_result.jsp?country=Poland&city=Warsaw

KPMG (2013) “Invest in Poland”

https://www.kpmg.com/PL/en/IssuesAndInsights/ArticlesPublications/Documents/Reports-

Secured/Investment-in-Poland-2013-protected.pdf

European Foundation Center (2011) “The Comparative Highlights of Foundation Laws The

operating environment for foundations in Europe”

http://www.efc.be/programmes_services/resources/Documents/ComparativeHighlightsOfFou

ndationsLaws_2011.pdf

Contact information

37 Oniashvili; 0160;

Tbilisi, Georgia

Tel: +995 32 2372882

Email: info@isfed.ge

Webmail: isfed.ge