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POLISH INFORMATION AND FOREIGN INVESTMENT AGENCY Doing Business in Poland Mr Paweł Stelmaszczyk Vice-President of the Polish Information and Foreign Investment Agency Tokyo, September 2008 Presentation plan I. Poland’s economic performance II. Investment climate III. Foreign Direct Investment IV. Major Japanese Investors in Poland V. Polish Information and Foreign Investment Agency Poland- Economic facts Area: 312 000 sq km – 6th in European Union Population: 38,12 million – Currency: Polish Zloty (EUR 1 ~ PLN 3.4) GDP total: USD 440 billion Membership: Zone EU, NATO, OECD, WTO, Schengen GDP growth: 6,6% (2007) 6th in European Union Strategic location between West and East 1000 km radius 250 mn people 2000 km radius 550 mn people • located in the heart of continental Europe • the part of the single market of 500 million • the springboard to the East • population of 250 million within a 1000 km radius • competitive cost base offers significant location benefits Stable and fast economic growth (GDP in bn USD) Schengen Poland joins the EU 500 Entry into the NATO 400 OECD WTO 300 200 Beginning of transformation 100 Source: International Monetary Found, World Economic Outlook Database, Oct 2007 20 04 20 05 20 06 20 07 * 20 08 * 20 01 20 02 20 03 19 97 19 98 19 99 20 00 19 94 19 95 19 96 19 91 19 92 19 93 19 89 19 90 0 Poland 6.0% Euroarea EU27 • GDP growth in 2007 – 6.6%, over 20062007 – 6% (2nd best in OECD countries) • Domestic demand - the main factor behind the growth • Average unemployment rate declined in 2007 to 13.8% and in Q2 of 2008 went down to 9.5% 4.0% 2.0% 0.0% 2007F Low inflation and low interest rates • Contained inflationary pressure • Direct inflation targeting since 1999; since 2004 permanent inflation target 2.5% +/-1% Source: Ministry of Finance, NBP CPI NBP reference rate 8.0% 6.0% 4.0% 2.0% 0.0% 20 02 • after acceleration of inflation in 2007 due to high domestic demand and pressure on wages in 2008 at 4% 10.0% 20 07 2006 20 06 2005 20 05 2004 20 04 2003 20 03 2002 Poland will receive 67,5 bn EUR from the EU budget (2007-2013) Presentation plan I. Poland’s economic performance II. Investment climate III. Foreign Direct Investment IV. Major Japanese Investors in Poland V. Polish Information and Foreign Investment Agency Most attractive locations for future investments Poland Germany Russia France Romania Hungary UK Spain Bulgaria Italy Czech Republic 18% 16% 12% 11% 10% 9% 9% 8% 8% 7% 7% Source: Ernst&Young, 2008 Poland offers 20 mn entrepreneurial and multilingual young people • 87% of students can communicate in a foreign language • 50% of the population is less than 35 years old, 35% under 25 • a nationwide network of 448 universities and polytechnics Percentage of population in higher education in the 20-29 age group 29 26,7 Number of students in selected countries in 2006/2007 (in thou.) Poland 24,9 22,3 22,2 2118 Spain 19,3 16,6 13,2 1804 Romania 738 Hungary 436 Sl ov ak ia lic Re pu b Cz ec h Ire la nd US A ng ar y Hu s er la nd Ne th an y er m G Po la nd Czech Republic Lithuania 195 Ireland 186 Slovakia 181 Latvia Estonia Source: EIU, Eurostat 336 130 68 It is easy to start a business in Poland 140 120 Short time needed to start a business 115 98 100 88 80 65 53 60 31 45 40 20 0 Poland Germany France Hungary Czech Republic Slovakia Spain Low number of procedures Nature of Procedure (2004) Notarize company agreement Deposit capital in the bank Apply for REGON number Register for tax number Register for VAT Register at Register of Entrepreneurs File amended application for "REGON" number Register for National Work Inspection Register for national sanitary inspection Register for social security Total: * T his proc e dure runs s imulta ne ous ly with pre v ious proc e dure s . Source: World Bank, Doing Business 2006 Duration in days 1 1 1 24 0* 25* 1 1 1 1 31 Possible forms of business Companies: Limited Liability Company Joint-stock Company Partnerships: Registered partnership* Professional partnership* Limited partnership Limited joint-stock partnership* Civil partnership* Entry in the Business Activity Register (Private enterprise)* Branch Offices* Representative Offices * by reciprocity European Union – Corporate Income Tax EU COUNTRIES CIT FRANCE 33.43% SPAIN 30% THE UK 28% GREECE 25% CZECH REPUBLIC 21% SLOVAKIA 19% POLAND 19% GERMANY 15,825% Vs. ASIAN COUNTRIES CIT JAPAN 30% INDIA 30% MALAYSIA 28% CHINA 25% REPUBLIC OF KOREA 25% Source: KPMG Investment incentives available to investors in Poland CIT Exemption • • • • • • • • • • A special economic zone (SEZ) is a designated area in which manufacturing or distribution activities can be conducted on preferential terms (total of 20 000 hectares) The purpose of SEZs is to support regional development SEZ operate until 2020 Permits to conduct activities in SEZ are issued by the authorities of each SEZ Benefits from obtaining a permit to conduct activities in SEZs eligibility for income tax exemption – a form of regional aid plot of land prepared for an investment project, available at a competitive price free assistance in dealing with formalities relating to investment project exemption from real estate tax grants for employee training programmes grants for the creation of new jobs Regional Aid Map in Poland 2007 - 2013 40% 50% 40% 50% 40% till 2010 30% as of 2011 50% 50% 40% Warszawa City 30 % 50% 40% 50% 50% 50% 40% 50% 50% Due to relatively lower GDP level in Poland the levels of admissible state aid are higher than in most other EU countries Polish students confirm the quality of education system ACM is the oldest, largest, and most prestigious programming contest in the world In 2007 the Warsaw University team has taken the 1st place among 1582 universities from 71 countries. 2007 Microsoft Imagine Cup Polish programmers have taken three 1st places out of nine categories. Distinction for application with the biggest business potential. 2007 Europe Merrill Lynch Investment Challenge A four-person group from Warsaw School of Economics (SGH) won the prestigious Europe Merrill Lynch Investment Challenge 2007 final, beating 200 teams from whole Europe. 2007 Society of Automotive Engineers In 2007 SAE contest (Fort Worth – Texas) the Warsaw University of Technology team has taken the 2nd place international and 1st place in Europe Source: ACM 2007www.microsoft.com 2007, PAP – Polish Press Agency 2007, SAE, Gazeta Wyborcza 2007 Presentation plan I. Poland’s economic performance II. Investment climate III. Foreign Direct Investment IV. Major Japanese Investors in Poland V. Polish Information and Foreign Investment Agency Foreign Direct Investment inflow in 2000-2007 25,0 23,3 USD bn 19,8 20,0 15,0 10,0 13,1 10,4 9,3 5,7 5,0 4,1 4,6 2002 2003 0,0 2000 2001 2004 2005 2006 2007 * *estimated value of FDI based on the 11 months of 2007 and the assuming capital in transit at the 2006 level (USD 4,3 bn) Source: National Bank of Poland In 2007, the annual inflow of FDI was EUR 12.8 billion 15198 12834 10334 10453 * Initial data 8317 6372 4371 2000 2001 2002 14.7% Other countries 85.3% EU Source: NBP 4067 2003 2004 2005 2006 2007 Majority of FDI in Poland is coming from EU countries. The Netherlands is the largest foreign investor in Poland. On the next places are: Germany, France, Luxembourg and USA. Manufacturing is the most popular sector among all foreign companies operating in Poland but services – especially those based on knowledge - are growing very fast. Income of companies generated by FDI in Poland (in bn USD) 12,0 10,0 8,0 6,0 4,0 2,0 0,0 -2,0 2002 2003 Dividend Reinvested profits Investment income (interest) Direct investment income Source: National Bank of Poland 2004 2005 2006 I-IX 2007 Manufacturing still dominates in FDI flow to Poland Sectoral inflow of FDI to Poland (in EUR mn) at the end of 2007 3028,8 Others 2566,8 Manufacturing Real estate& business activities 2541,1 Financial intermediation Trade and repairs Transportation & communication Source: NBP 1963,6 1527,2 1206,3 Automotive industry is the leading branch of Polish industry in terms of foreign investors’ interest FDI inflow to manufacturing sector (in EUR mln) at the end of 2006 5250,5 production of vehicles production of food, beverages and tobbaco's products 4828,6 production of m etals and m etal products 3417,3 production of w ood, cellulose and paper 3363,5 production of chem icals 3203,5 production of rubber and plastic products production of radio, TV and com m unication equipm ent Source: NBP 2673,6 836,2 FDI in Poland in 2006 Other activities 11% Manufacturing 24% Real Estate & Business Activity 38% Financial Intermediation 11% Trade and Repairs 16% Source: National Bank of Poland Poland - the largest number of jobs created by FDI in 2006 in Europe Number of projects 2006 Job creation 2006 Source: Ernst &Young European Attractiveness Survey 2007 Presentation plan I. Poland’s economic performance II. Investment climate III. Foreign Direct Investment IV. Major Japanese Investors in Poland V. Polish Information and Foreign Investment Agency Poland – destination for Japanese investments Map of Japanese Companies in Poland J-Power (windfarm) Suruga Seiki (precision parts) Bridgestone (tire) CRYSTAL PARK: Sharp (LCD module) Orion Electric (LCD TV) Sumika, Tokai Okaya, Sohbi Craft, U-Tec, Tensho Denki, Kimoto, Toppan Fuji Seal (label, package) Słupsk Gdańsk Ajinomoto (noodle) Panasonic Batteries Bridgestone (tire) Calsonic (car air conditioner) Szczecin Stargard Szczeciński BTM UFJ, ORIX Toruń SEWS (wiring harness) Funai Electric (liquid TBMECA (intake manifold) Warszawa Kutno Mszczonów Leszno Nowa Sól Nifco (plastic parts) AKS (precision bearing ball) YAGI (hub bearing) Daicel Safety Systems (airbag inflator) Bridgestone (caterpillar) Błonie Gniezno Poznań crystal television) Sanden (car air conditioner) Małkinia Górna Polkowice Ostrów Wlkp. Radom Legnica Świdnica TAKATA Petri (airbag, handle) TMMP (gasoline engine) Toyota Tsushou (aluminium molding) NSK Power Steering TMIP (diesel engine) NTK (ceramic tools) Fuji Seiko (manufacturing tools) Wrocław Kielce Jelcz Laskowice Żarów Wałbrzych Wolbrom Katowice Gliwice NGK (other non-metal goods) Kotani (fabricated metal products ) Toyo Seal Industries ISUZU Motors Kraśnik Tychy Kraków Żywiec Niepołomice SEWS (wiring harness) Nidec (power steering) (trading companies, sales agen construction companies) MOI Tech (engine belt) MCTI Warehouse management Danfoss Saginomiya (air conditioner) YKK (fastener) Toho Kogyo (bearing parts) Tsubaki Hoover (bearing) NSK ISKRA (bearing) TRI (car antivibration devices) NSK (Needle bearing) Fujitsu Kyushyu (software) Euro comfort (feather) NYK Logistics Sumitomo Corp. (trading) Trade volume between Poland and Japan export (mn USD) 200 189 180 180 171 160 140 120 100 93,5 80 70,6 59,8 58,5 60 55,3 43,1 40 38,6 35,3 20 0 1996 1998 2000 2002 2004 2006 Source: Ministry of Economy mn USD Trade volume between Poland and Japan import (mn USD) 2500 1992 2076 2000 1711 1500 1269 1000 828 735 mn USD 1040 927 988 938 500 521 0 1996 1998 Source: Ministry of Economy 2000 2002 2004 2006 Presentation plan I. Poland’s economic performance II. Investment climate III. Foreign Direct Investment IV. Major Japanese Investors in Poland V. Polish Information and Foreign Investment Agency Investment process Considering of investment Strategic corporate decision regarding new investment, destination of investment Long list of countries Analysis of macroeconomic, social and political conditions of the countries, general legal and financial analysis including investment incentives system, fact finding missions Short list Short list of countries, choice of locations, detailed legal and financial analysis, investment incentives system’s analysis, negotiations with central and local authorities, finding the potential partners Investment decision Agency’s offer • Promotion of Poland through marketing campaigns, investment seminars, work-shops, study tours • Investment marketing, company visits • Co-operation with Polish Embassies abroad • Project Managers assistance • Site visits offered to investors • Providing macroeconomic and sector data, information on financial incentives offered by central and local governments, Special Economic Zones and EU funds • Assistance in obtaining financial support from the state government • Co-operation with Special Economic Zones • Date base of suppliers and business partners • Network of Regional Investor Assistance Centers • Real estate data base • After-care services • Ombudsman for foreign investors We kindly invite you to cooperation 00-585 Warszawa, ul. Bagatela 12 tel. (+48 22) 334 98 00, fax (+48 22) 334 99 99 e-mail: [email protected]