Countries with the largest debt in Polish companies

Officially, 714 foreign companies owe Polish businessmen 26.7 million PLN. However, the data do not reflect the magnitude of the phenomenon.

The Bureau of Economic Information is listed in the National Debt Register 714 foreign companies, Which Arrears of payments to Polish businessmen in the amount of PLN 26.7 million, Results from the National Debt Register (KRD) data. Almost half of these arrears (13 million PLN) are borne by companies from Lithuania, Germany and Italy.

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As emphasized by KRD experts, The reported debt amount does not reflect the actual scale of the phenomenon, because many companies still do not know that a dishonest foreign contractor can be entered into the national debt registry.

– The National Debt Registry receives, stores and presents data mainly on Polish debtors, both companies and consumers. Few entrepreneurs know that you can also report to us about a foreign debtor. Meanwhile, this is an urgent problem, because more than 120,000 Polish companies export their goods and services. And just like in the country, they are being deceived by contractors. It is in the interest of all exporters to share knowledge about these unreliable importers. In many countries, the problem of payment bottlenecks is increasing due to the crisis caused by the pandemic, so it can be expected that some foreign companies will not pay Polish entrepreneurs – says Adam Oke, head of the national debt registry at the Office of Economic Information.

Among debtors from other countries, companies from Lithuania (5.4 million PLN), Germany (4.3 million PLN) and Italy (3.9 million PLN) have the largest amounts to be returned. In addition to sums exceeding a total of one million zlotys, Polish entrepreneurs want to get their money back from contractors from Belgium, the Netherlands, Slovakia and Great Britain. Germany represents the most numerous group of debtors. Almost every third company that has arrears with the Poles depends on Oder. In total, foreign contractors owe Polish companies 26.7 million PLN.

Companies from European countries are often entered into the KRD, but you can also find some very exotic debtors from almost every continent. Polish companies are awaiting payment of overdue obligations, for example from the Democratic Republic of the Congo, Ecuador, Kyrgyzstan, Colombia, Peru or New Zealand. Usually these are unsuccessful individual contracts, which for the Polish side resulted in a financial loss of several tens to tens of thousands of zlotys. Among these countries, the most unpleasant partner of the local company turned out to be a contractor from Ecuador, which was in arrears with more than 85,000 PLN.

In our track record, we can see that the SME sector often has trouble recovering funds, including even the smallest entities trying to do business with overseas markets. The average amount that a Polish company has to recover from a foreign debtor is 37,000 PLN. At the level of a single small organization, it’s an amount that can upset a company’s cash flow and seriously shake its business – Adam Aoki explains.

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Last year, the first epidemic debtors also appeared on the record, such as a company from China that owed a Polish company in the amount of half a million zlotys. The risk of payment bottlenecks and contractor bankruptcy also increases with the pandemic. It was also pointed out that business support programs that saved enterprises from bankruptcy are already ending in many countries.

As shown by KRD Particularly worrying signals come from Germany. In the spring of our largest trading partner, the number of bankruptcy petitions increased dramatically. According to Coface, government aid programs have helped save more than 4,000 people from that fate. German companies, which were, in many cases, just a postponement of bankruptcy. This means that a wave of German corporate bankruptcies is coming and will also affect Polish business, which is closely linked to the economy of its western neighbor.

Bankruptcies across the Oder mean that many Polish companies will not get paid for their goods and services. The economies of Poland and Germany are closely linked, which in worse times brings additional risks – says Rzetelna Firma expert Andrzej Kulik.

Now he adds, a third of entrepreneurs in Poland admit that they do not pay their contractors because they themselves are waiting for payments from clients. Thus, the problem may worsen in the near future, and it is advisable for Polish companies to warn each other and report problems with payments, either from Germany or from other countries where the pandemic is also affecting business.