What is the current economic situation in Poland?
Last year foreign investors agreed financing for 373 new investments in Poland, together worth $21.8 billion. This made Poland the third largest destination for investment coming into Europe.*
The number of such projects in Europe fell by 6% last year, while their value dropped by 11% to a total of $214 billion. But within Poland the number of investments increased by 14% and their total value by 43%. Of course challenges lie ahead amid COVID-19 pandemic, with projected numbers dropping 15% in January and February of this year.**
Within in the CEE, Poland is the largest and has the strongest economy, while constantly growing its GDP since 1991. The Polish GDP increased by 4% compared to 2018, according to preliminary figures, with the main driver in its economic growth being domestic demand.
Despite Poland not being a member of the ‘Eurozone’, it still professionally supports enterprises. In 2019, the incentive in the form of tax exemptions for new investment projects brought about a significant growth of capital expenditures on tangible assets. This shows the economy in Poland still has strong potential to expand, given the warning signs of impending slowdown due to the COVID-19 pandemic. The forecasts are still optimistic, though. Just like the financial crash in 2008, Poland’s GDP should remain higher than that of other European Member States.
A study in 2019 by the Polish Investment and Trade Agency has shown that around 94% of foreign investors would invest again in Poland. It has shown that the central reasons are (i) the size of the investment marketplace, (ii) the strength of the economic and (iii) access to qualified personnel and the high quality of purchased investment land. Which makes Poland one of the most attractive countries for new investment in the CEE region.
* according to fDi Intelligence
** according to inwestycje.pl
hat makes Poland so attractive? The investment attractiveness of Poland is a combination of economic and social factors, as well as the well-tailored offer of investment incentives and public assistance. Surveys made among foreign investors who do business in Poland, including the PAlilZ report on investment climate in Poland, show that what attracts them is Poland’s central location in Europe, intergration and good communication with both the European Union and Eastern Europe markets, competitive prices of freight and materials, as well as a large internal market. Poland also has much to offer in terms of investment incentives.
t state level Poland provides a comparatively attractive system by offering varied incentives, but at the same time, the local governments are becoming more and more keenly involved. This determination to attract foreign investment to Poland is on the rise, which is reflected in the reduction of administrative obstacles, the increased flexibility and a willingness to co-operate. As in previous years the ‘Special Economic Zones’ (SEZs) are very smart locations to invest due to the huge number of tax reliefs accessible to enterprises functioning in those SEZs. But currently, these will only exist until the end of 2026.
To ensure that Poland remains an attractive investment location, a new support instrument was announced in June 2018 called the ‘New Investment Support Act’. This allows enterprises to benefit from income tax exemption throughout Poland. Is it projected that the number of activities in the Polish Investment Zone may grow in 2020 by as much as 10% compared to 2019.
The domestic market has now been established and the steady increase in the Gross Domestic Product, along with consumption, has made Poland an attractive target not only for exporters, but also for investments focused on at domestic sales. The number of German companies investing in Poland confirms the favourable investment climate that exists. The important relationship between Germany and Poland continues as they continue to be the most active investor in the SMEs sector. With other key foreign partners being South Korea, Japan and the United States.
In May of this year, Microsoft announced a $1 billion digital investment in Poland. This is Poland’s largest ever IT investment project and will feature Microsoft’s first data centre in the region, providing cloud services to business and government. While in 2019, Google also announced plans to open a cloud hub in Poland which will serve the CEE region. Both projects will be run in partnership with the Polish Development Fund (PFR) and PKO BP, Poland’s largest bank.
Poland attracts foreign investors due to, amongst others, a high level of innovation, very good qualified workforce, one of the market leaders in provided services, along with the economic effectiveness. In recent years Poland has seen the many companies established in research, laboratories, packaging manufacturers, along with chemical and biotechnology companies. This has even led to the ever growing cosmetics sector, to be able to handle their entire manufacturing process in Poland.
A recent report prepared by the Polish Investment and Trade Agency for would-be investors called “Poland Land of Opportunities” shows investment projects are in the pipeline for automotive and electro mobility, IT and transport industries.
getsix® with our vast experience regarding German entrepreneurs in Poland would highlight they continue to advise a rather inefficient judicial system, along with a complicated and often changing tax system.
Our tax experts have concerns that even though provisions aimed at tightening up the Polish tax law system – even though very much required – are only vague.
This is where getsix® comes in, we will help you avoid any obstacles or delays in making your business a success here in Poland. The goal of the getsix Group is to become a strong partner in supporting, advising and managing your everyday business processes for companies and entrepreneurs looking to operate in Poland. Engaging with a professional partner like getsix® now in existence 13 years, gives you immediate understanding and experience of the Polish market. getsix® prides itself on first-class client focused outsourcing services.
The lawmakers in Poland have created special types of funding for new investment projects. If you have an enterprise that functions in Poland, you can enjoy income tax exemption all over Poland, regardless of whether you are operating within the SEZs.
You have to be aware that, a minimum capital expenditure has been set for enterprises, they must declare this figure for a new investment project. There are different expenditure amounts depending on the district, which is subject to reports on the unemployment rate – the minimum capital expenditure for large enterprise, for example, is from 10 million Złoty to as much as 100 million Złoty.
As well as stating the minimum capital expenditure, enterprises who would like to enjoy income tax exemption due to operations based on the decision granting support, need to also declare to meet qualify criteria. Within the criteria they highlight viable economic and social development and include, to give an example, upholding a certain export level or alliance with trade and vocational schools. It should be said that a large number of cities have introduced real property tax exemption for new investments which, when added to the income tax exemption, becomes very favourable to investors.
The previously mentioned special support also covers innovative undertakings of enterprises. There is a 50% tax deductible relief for Research & Development for salary costs or special tax treatment of Innovation Box, shows a few preferences announced by the Polish lawmakers. Again these investment incentives clearly make Poland a very attractive business destination for foreign investors.
We would also like to point out that areas where the largest amount of aid is earmarked to support projects in line with Poland’s current development policy, e.g.
If we take a look at IMF projections Poland’s GDP growth is about to gradually slow down to touch 2.8% between 2021 to 2023. But there are other expert’s projections which are more optimistic, with Poland reaching GDP growth of 4%. When you compare Poland to the rest of the ‘Eurozone’ it is favourable, with GDP in this zone in 2020 to be 1.7%.
Foreign investors see Poland, within the EU, as an outstanding investment location due to: the quality of staff, availability of suppliers, and constantly improving infrastructure, you can understand why. If you also look at the years ahead, it is very probable that the Polish economy will be marked by stable growth and growing competitiveness in the global market.
EU funding has already added stimulus to the improvement of eastern Poland, which has become considerably more attractive to investors. Also the scheduled regulations on state aid will add to the additional boom in the east of Poland.
The Polish economy is on a roll… In addition, the location of Poland plays a large part when it comes to attracting investors from abroad. Due to this foreign investment we can observe well-designed and distinctive buildings. There really is no day that goes by without news of upcoming new projects. Last year foreign investors agreed financing for 373 new investments in Poland, together worth $21.8 billion. This made Poland the third largest destination for investment coming into Europe.*
oland is a beneficiary of considerable EU funds which have allowed it to establish a broad system of support for business. The numerous investment incentives and sources of state aid are available, also for investors operating within ‘Special Economic Zones’ (SEZs).
In 2014-2020 Poland received EUR 82.5 billion under the EU choesion policy
Those funds allow for 6 domestic and 16 regional operational programmes to be implemented. Morever, Poland will recieve funds under European Agricultural Fund for Rural Development and the European Maritime and Fusheries Fund, which will enable the country to implement programmes targeted at the agricultural sector and the fisheries sector.
The Polish Investment Zone – a new directive for business
In order to better meet business expectations, in 2018 the Polish Parliament announced the New Investment Support Act. Due to this new regulation, almost all of Poland now constitutes a single investment zone in which companies can benefit from tax advantages, in the form of Corporate Income Tax (CIT) or Personal Income Tax (PIT) exemptions for periods of 10, 12 or 15 years, after satisfying certain location-dependent conditions.
The Benefits for Investors
The new legal arrangements offer companies with the option of gaining tax exemptions for investments, although so long as they obey with suitability rules. The Polish Investment Zone (PIZ) exemption allows for CIT and PIT relief for income produced by actions covered by the granted verdict on support which are to be conducted within a specified territory.
The greatest benefit of the new aid scheme is not only the improved flexibility in the investor’s choice of location, but also the proposal of a considerably longer period of tax exemption. This particularly concerns investments located within a Special Economic Zone (SEZ) or regions with the highest (50%) aid intensity. In these locations, the exclusion period could last up to 15 years. The verdict on the support is decided via an administrative body, therefore the procedure should not take longer than 30 days from the date the application was submitted, which can be submitted throughout the whole year.
The broad catalogue of support instruments offers numerous investment incentives to entrepreneurs. Support is available, inter alia, for:
Poland has managed to develop a very attractive system of different types of incentives. There are possibilities to benefit from both tax exemptions and cash grants for new investments and job creation. These SEZs in Poland offer exemption from income tax, which is supplemented with real estate offered by local authorities. Cash grants are available from ‘Program for the support of investments of considerable importance for the Polish economy for years 2011-2020’ for investments in: automotive, aviation, biotechnology, food processing, R&D and modern services sector. A second source of cash grants are subsides co-financed with European funds for the years 2014-2020 – application rounds have started.
getsix®, as an experienced and strong business partner, offers a broad range of cross-linked economic services for the local marketplace and foreign investments in Poland. The service of our client will always remain the focal point of all the actions performed by getsix®. A permanent contact person is assigned to your business. The new line service provided by getsix® gives you, the possibility to concentrate yourself entirely on your core activities and expansion, without having to worry unduly about the day to day operations.
getsix® goal is to become a strong partner in supporting and managing everyday business processes for companies and entrepreneurs operating in Poland. getsix® offers outstanding and customer focused complementary services in many areas.
getsix® concentrates on addressing the requirements of mainly foreign capital owned companies and their owners / managing directors.
Over 130 highly qualified and experienced employees with an excellent knowledge of foreign languages: English, German and French work in conveniently located and easy to reach offices in Wrocław, Poznań, Warszawa, Szczecin and Katowice. The committed staff of getsix® are at the disposal of our clients, ready to assist or to visit our prospects in order to discuss in-depth client’s expectations. Accordingly, based on gathered information, we prepare a tailor-made and customised offer.
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of your business!
getsix Group offers one of the best and most professional ‘Company Registration’ services in Poland. We ensure that our clients are provided with every detail connected to establishing business entities based on Polish law. This comprehensive service we feel is very unique on the market, because we allow the client to choose the level of service, subject to their actual needs and budget. getsix Group pay very strict attention to every detail, at each stage of the Polish ‘Company Registration’ process.
Why not become familiar with the packages that we offer? Then it is simple for us to fulfil your requirements, quickly and professionally.
Please note: We can also arrange the ‘Company Registration’ process in a way that there will be no need for a client to come to Poland.
Polish law offers numerous legal forms of running a business. The most suitable solutions to serve as a business vehicle for investors and companies:
We can also offer and combine our ‘Secretarial & Administrative’ Services from any of our 5 offices throughout Poland.
Please make yourself familiar with our packages. If you need any further assistance, please feel free to contact us anytime. We will be more than happy to provide you with a properly and favourably registered business. getsix Group will assist you to make the process simply and stress free, while providing professional and friendly service to establish your business in Poland.
At the repeated request of our clients we offer services with regard to commerce in addition to bookkeeping and conduct of personnel matters. Read more »
We support you not only through our accounting services; we wish also to contribute to your enterprise our experience offering advisory services. Read more »
We work on the basis of regular constant monthly fees. It means that month by month you know exactly how much it costs to have the books run. Read more »
Constantly changing legal provisions and ordinances for labour law and tax law make the salary calculation often a very time-consuming. Read more »
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For a smooth flow of your business, an insightful legal consultancy stays pivotal from the onset. Read more »
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