Nearshoring is the relocation of production or services to nearby countries (within the EU or a region) to replace distant offshore locations. At Musch Legal, we provide guidance on nearshoring to Poland, the Czech Republic, Slovakia, Romania, and Turkey. Drivers: geopolitical uncertainty, supply chain risk, CSDDD due diligence. Legal themes: establishment structure, employment law, tax optimization, IP protection, contract law. Good preparation saves months and hundreds of thousands of euros.
What is the legal issue? (Which legal themes are involved?)
Nearshoring requires decisions regarding: type of presence (own entity, JV, contract manufacturing), location per fiscal and legal profile, employment law structuring, IP protection and transfer, supply chain contracts, customs and export control, tax optimization via transit structures. For Poland and the Czech Republic: well-known routes with good infrastructure. For Romania and Bulgaria: lower costs but greater legal complexity. For Turkey: EU Customs Union but non-EU legal system.
What does the law say? (Which frameworks apply?)
Within the EU: freedom of establishment under Articles 49-55 TFEU, EU Company Law Harmonisation Directives, EU Posting of Workers Directive 96/71/EC (amended by 2018/957 since 30 July 2020) for temporary workers with host country rules. For product sales within the EU: free movement under Articles 34-36 TFEU. For data: GDPR (Regulation 2016/679). For Turkey: EU-Turkey Customs Union since 1996; NL-Turkey bilateral investment treaty 1986. For Morocco and Tunisia: EU-Mediterranean Free Trade Agreements.
For IP protection upon transfer: carefully drafted IP assignment contracts are essential.
Destination
Benefit
Point of attention
Poland
Skilled workforce, low costs, EU
Employment law for secondment
Czech Republic
Engineering, geographically close
Talent shortage
Romania
IT, low wages, EU
Political uncertainty
Turkey
Customs Union, production costs
Political risks, currency
Morocco
EU-Mediterranean FTA, costs
Cultural/language differences
Destination
Benefit
Point of attention
Poland
Skilled workforce, low costs, EU
Labor law secondment
Czech Republic
Engineering, geographically close
Talent shortage
Romania
IT, low wages, EU
Political uncertainty
Turkey
Customs Union, production costs
Political risks, currency
Morocco
EU-Mediterranean FTA, costs
Cultural/language differences
What risks do companies face? (What threatens in the absence of preparation?)
Unfamiliarity with local labor law: dismissal procedures, CLA obligations, trade union. For the posting of Dutch personnel to Poland under the Posting of Workers Directive: A1 form and host country payroll obligation for longer stays. IP transfer without due diligence: local subsidiary can assert IP claim. Tax: transfer pricing risk for intercompany deliveries. Compliance: CSDDD (Directive 2024/1760) supply chain due diligence. Brexit impact on UK-related nearshoring.
Practical example from our practice (How Musch Legal advised on Polish nearshoring)
Musch Legal advised a Dutch mid-cap company on nearshoring production from China to Poland. We coordinated: structural analysis (chose of own entity over JV), incorporation of Spolka z o.o. (Polish BV equivalent), investment incentives via the Polish Investment and Trade Agency (PAIH) with a 10-year tax exemption, employment law structuring with a Polish law firm, intercompany IP licenses, supply chain contracts, and customs procedures. Total lead time: 9 months from decision to operational production. Cost savings of 35 percent versus Chinese production within 2 years. Significant geopolitical risk reduction.
What can you do? (Which nearshoring strategy are you building?)
Conduct scenario analysis: total cost of ownership Netherlands vs. nearshore locations. Identify critical jurisdictions based on talent, costs, customs, and IP protection. Engage a local legal partner via an international network. Negotiate investment incentives (tax holidays, subsidies). Structure IP transfer carefully. Plan employment law aspects (secondment, local recruitment). For Turkey: double compliance with Dutch/EU regulations + Turkish regulations. Engage Musch Legal for nearshoring strategy.