The Central and Eastern European regions have entered a stable growth phase that offers new opportunities for international businesses – including TMF Group.
As a Global Business Services provider we see international companies increasingly looking to Central and Eastern Europe (CEE) for their next sourcing destination or to expand their core activities. In fact, in order to adequately support this growing trend of companies wanting to establish in CEE, TMF Group has recently increased its own presence there, with the acquisition of Extor and UCMS Group.
The region has seen an economic growth rate of more than 3% in the last three years, and this is expected to continue at higher than the EU-average. CEE countries also offer favourable tax rates, but compliance with local rules and regulations can stop many companies in their tracks and prevent them from reaching their full potential; this is where our more than 20 years' experience in CEE comes into play, providing essential on-ground support to businesses in nine countries.
The report Business risks and opportunities in Central and Eastern Europe commissioned by us and published by The Economist Intelligence Unit (EIU) in March last year, pointed to increased nearshoring of manufacturing and service lines in CEE, particularly in Poland. The momentum for technology start-ups in countries such as Slovakia and again, Poland, continues to rise.
We have seen the growth of shared service centres in countries including Hungary, while a number of new BPO and IT shared service centres in Bulgaria and the Czech Republic have put these nations more firmly on the smart-sourcing map.
After several difficult years (with the exception of Poland that did not suffer post the 2008 recession), the CEE region is proving to be the place to be, for international businesses. All CEE countries except Serbia are now under the EU umbrella however; they have yet to fully align their legislative and regulatory frameworks with EU standards. It therefore cannot be stressed enough how important it is to comply with ever-changing local accounting, tax, employment and other administrative regulations.
No longer an emerging market economy, CEE has entered what is perhaps a more exciting phase: its adolescence, and it is clearly making its mark as the region for smart sourcing hubs. Companies that will thrive are those that manage to establish efficient partnerships with local experts, and opt for 'leaner' operations and structures.
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