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POLISH INFORMATION AND FOREIGN INVESTMENT AGENCY Investment climate in Poland Poland - Key Facts Area: 312 700 sq km – 6th in European Union Population: 38,12 million – Currency: Polish Zloty (1 USD ~ 3.1 PLN) GDP: USD 690.1 billion (PPP, 2009) GDP per capita: USD 17,900 (PPP, 2009) GDP growth: 6.7% (2007), 5% (2008), 1.8% (2009) Membership: EU, NATO, OECD, WTO, Schengen Zone 6th in European Union Competitive Advantages Location & economic fundamentals strategic location in continental Europe part of trans-European transportation corridor the only country of the EU with positive GDP growth in 2009 38 million consumers 1000 km radius 250 mn people Labor force young, well-educated work force ca 11% of university students in the EU 455 universities & high education schools language proficiency increasing labour productivity Investment incentives tax exemptions in 14 Special Economic Zones grants co financed from the EU (USD 110 bn) 2000 km radius 550 mn people Poland a gateway to United Europe Since 1st of May 2004 Poland is a member of the EU. Main advantages: - access to the single market of almost 500 M potential consumers, - free movement of goods, - the Polish law harmonized with the EU regulations. Distribution of the EU Funds (in EUR 100 mn) In years 2007-2013 Poland will be the largest beneficiary of European Funds available among others to any company incorporated in Poland. Schengen Zone On 21 December 2007 Poland joined the Schengen zone: a territory with no checks at internal borders formed in the 24 member States. GDP growth in 2009 FIN -7.8% - 6.5% NO SE -1.5% -5.2% EU27: - 4.2% USA: EE -14.1% - 7.8% LV -18.0% - 5.1% - 14.1% DK UK -4.9% -4.9% -4.9% NL -4.0% DE BE -3.0% - 4.9% -4% -3% FR --2.6% 4.9% PL - 18% +1.8% - 14.8% -5.0% - 7.1% Japan: - 5.2% LT -14.8% - 1.5% IR -7.1% - 2.4% CZ -4.2% SK -4.7% PL + 1.7% AT -3.6% HU -6.3% RO -7.1% - 4.2% - 4.7% IT - 3.6% PT - 2.6% ES -2.7% -3.6% - 1.5% - 7.8% - 5.0% -5.0% - 6.3% BG -5.0% - 7.1% - 5.8% - 5.0% - 3.6% - 2.7% - 2.0% Source: Eurostat TR GR -2.0% -4.7% Stable economic situation • GDP growth in 2009 : 1.7% in Poland vs -4.2% in EU (forecast) • Current GDP growth in Poland: Q1 2009 – 0.8% Q2 2009 – 1.1% Q3 2009 – 1.7% Q4 2009 – 3% Q1 2010 – 3.1% Q2 2010 – 3.5% % • Inflation annual (2009): 4.0% vs. 1.0% in EU 2.2% in May 2010 (y-o-y) GDP growth Zone Euro Poland 5 3 1 -1 -3 • Main drivers of economic growth: strong contribution of net exports households spending: 2.3% construction sector: 4.1% EU27 7 -5 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 GDP growth forecasts for Poland and CEE 15 10 5 0 -5 2005 2006 2007 2008* 2009* 2010* Poland 3,6 6,2 6,7 5 2 2,4 Czech Republic 6,3 6,8 6 4,2 1,7 2,3 Hungary 4 4,1 1,1 0,9 -1,6 1 Slovakia 6,5 8,5 10,4 7,1 2,7 3,1 2 3,1 2,9 1 -1,8 0,5 EU * forecast Source: European Commission, Interim Forecast, January 2009 GDP growth forecasts by OECD 12 11.1 9.7 10 8 6 4.6 4.4 3.9 4 3.2 3.2 3.1 3 2.5 2 2 0 1.8 1.3 -0.9 World 8.7 -2.4 China 2010 Source: OECD, 2010 US 2011 1.8 Poland -5.2 -4.9 Japan Great Britain GDP change in 2009 1.2 -4.1 Euro zone Unemployment rate over 20% 05/2010 11.9% 20 10 Source: Central Statistical Office 2009 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 20 02 0 Hourly labour costs in 2008 (in EUR)* Bulgaria 2,42 Romania 4,07 Latvia 5,71 Lithuania 5,86 Slovakia 7,17 Hungary 7,61 Estonia 7,61 Poland 7,89 Malta 8,89 Czech Rep. 9,04 * Industry, construction & services 13,98 Slovenia Spain 18,10 23,84 UK Germany 28,20 32,45 Belgium Denmark 34,82 35,42 Switzerland 0 5 10 15 20 25 30 35 40 Source: Eurostat, September 2010 Unemployment and average gross wages 1Q 2010 (in PLN) 3500 - 4000 (PLN) Pomorskie province • unemployment rate: 9.2% • average wage: 3409 PLN Kujawsko-Pomorskie • unemployment rate: 11.6% • average wage: 2894 PLN Poland • unemployment rate: 11.9%* • 1 907 thous. unemployed • average wage: 3371 PLN 3000 – 3499 (PLN) Gdańs k 2500 – 2999 (PLN) Szczecin Zachodniopomorskie • unemployment rate: 14.1% • average wage: 3065 PLN Wielkopolskie province • unemployment rate: 9.8% • average wage: 3144 PLN Lubuskie province • unemployment rate: 12.9% • average wage: 2845 PLN Source: Rzeczpospolita daily, 2010 Mazowieckie province • unemployment rate: 8.2% • average wage: 3922 PLN Warszawa Zielona Góra Opolskie province • unemployment rate: 12.3% • average wage: 3155 PLN *End of May, 2010 Białystok Poznań Dolnośląskie province •unemployment rate: 12.1% • average wage: 3542 PLN Podlaskie province • unemployment rate: 11.5% • average wage: 2906 PLN Olsztyn Bydgoszcz Toruń Warmińsko-Mazurskie • unemployment rate: 11.3% • average wage: 2685 PLN Łódź Wrocław Lublin Opole Katowice Lubelskie province • unemployment rate: 11.2% • average wage: 2921 PLN Świętokrzyskie province • unemployment rate: 13.2% • average wage: 2975 PLN Kielce Rzeszów Kraków Śląskie province • unemployment rate: 9.6% • average wage: 3997 PLN Łódzkie province • unemployment rate: 9.6% • average wage: 2950 PLN Podkarpackie province • unemployment rate: 13.1% • average wage: 2792 PLN Małopolskie province • unemployment rate: 9.5% • average wage: 3222 PLN Students and graduates 40000 20 mn young people Number of 1st year students by group of fields 35000 30000 almost 2 mn students 25000 more than 400 thous. graduates every year 20000 more than 90% of students know foreign 15000 10000 languages 5000 0 Construction Econom ics Law Pedagogy Managem ent Main academic centers TRI-CITY OLSZTYN SZCZECIN 455 higher education institutions BIALYSTOK BYDGOSZCZ/TORUN • 18 universities WARSZAWA POZNAN ZIELONA GORA • 22 technical universities 360> LODZ LUBLIN WROCLAW OPOLE No. of students (thousands) 201 > KIELCE 151 – 200 KRAKOW KATOWICE RZESZOW 101 – 150 51 – 100 50 < Source: Central Statistical Office • 95 academies of economics growing number of science students Engineer’s degree students No. of Universities No. of students No. of engineers Małopolskie 32 205 475 38 311 Mazowieckie 103 360 936 35 690 Regions Śląskie 44 187 192 32 939 Dolnośląskie 36 168 004 30 123 Wielkopolskie 38 180 487 19 621 Zachodniopomorskie 22 79 657 15 255 Pomorskie 28 99 443 14 386 Łódzkie 29 140 780 11 051 Lubelskie 19 102 520 10 577 Main academic centers TRI-CITY OLSZTYN SZCZECIN BIALYSTOK BYDGOSZCZ/TORUN WARSZAWA POZNAN ZIELONA GORA 360> LODZ LUBLIN WROCLAW OPOLE Świętokrzyskie 15 56 644 7 999 Podkarpackie 17 69 372 7 541 KRAKOW KATOWICE Kujawsko-Pomorskie 20 83 046 6 629 Warmińsko-Mazurskie 9 55 334 6 250 Podlaskie 19 52 843 6 199 Opolskie 6 37 580 4 708 151 – 200 Lubuskie 8 29 719 3 403 101 – 150 445 1 909 032 250 682 51 – 100 No. of students (thousands) SUM 201 > 50 < Source: Central Statistical Office KIELCE RZESZOW Higher education trends • Tuition at public schools is free of charge • Public schools provide best quality of education • The most popular are studies in economics and management • Increasing interest in technical studies 40000 35000 30000 25000 20000 15000 10000 5000 • 2,8% secondary school graduates applied for technical studies in 2009 (2,0% in 2008) • Secondary grade include maths Number of 1st year students by group of fields 0 Construction Econom ics Law Pedagogy Managem ent exams Source: NBP portal, 2009 Knowledge of foreign languages According to the survey conducted by Central Statistical Office: • 41% people declare a knowledge of one foreign language • 27.5% people declare a knowledge of at least two foreign languages One foreign language At least two foreign languages General 39,17% 23,39% Higher education 35,90% 58,36% Secondary education 46,70% 25,74% Source: GUS 2009 Foreign language capabilities Foreign language capability by age groups 50% Language proficiency is one of the strongest points for Poland as a BPO center 40% 30% 20% Children learn foreign languages from the age of 10 10% 0% 18-24 25-34 English German 35-44 45-54 Russian Source: CBOS Survey 2006 Foreign language capability among students English is the most popular foreign language in Poland 100% 80% 60% Learning of foreign languages is obligatory in the Polish education system 40% 20% 0% English German Russian Source: Randstad, October 2008 French Spanish Modernisation of roads and railroads network Roads Existing highways and speedways Existing national roads Highways and speedways under construction Source: GDDKiA, MI Railroads Till 2006 2007-2013 2014 – 2020 New constructions After 2020 Air transport Passengers served by Polish airports (in millions) 25 19,1 GDAŃSK 20 10 BYDGOSZCZ 18,9 15,4 15 SZCZECIN 20,6 11,5 7,07 7,55 2003 2004 5 WARSZAWA POZNAŃ 0 ZIELONA GÓRA 2005 2006 2007 2008 2009 ŁÓDŹ WROCŁAW Direct flights to major world cities KATOWICE KRAKÓW RZESZÓW London Warsaw, Gdańsk, Wrocław, Kraków, Rzeszów, Szczecin, Bydgoszcz, Copenhagen Warsaw, Szczecin, Gdańsk, Wrocław, Poznań, Kraków Frankfurt Warsaw, Gdańsk, Poznań, Rzeszów, Katowice, Wrocław, Kraków, Paris Warsaw, Katowice, Kraków Munich Warsaw, Wrocław, Katowice, Kraków Barcelona Warsaw, Katowice, Kraków New York Warsaw, Kraków, Rzeszow Overseas flights European flights Domestic flights Airports under construction Source: The Civil Aviation Office Tax rates • Corporate Income Tax (CIT) rate 19% • Personal Income Tax (PIT) rate 18% and 32% • Value added tax (VAT) basic rate: 22% reduced rates: 7%, 3% export rate: 0% • Social Security Tax paid by employer between 17.48% and 20.41% Poland in World Investment Report 2010 & 2009 Poland as a major FDI recipient in the region: Poland attracted ca. USD 11.4 billion in 2009, the highest amount among 12 new EU states According to UNCTAD the key factors attracting FDI to Poland are: • rapidly expanding domestic market • flexible & skilled labour force • solid banking system Source: World Investment Report, UNCTAD 2008,2009, 2010 The inflow of FDI to CEE countries in 2009 (bn EUR) 10,0 10 9,5 8,4 8 6,2 6 4,8 4,4 4,6 4 3,2 2,0 2 1,0 0,9 0,8 Source: National Banks of respective countries ia ar ia ak Sl ov 2009 B 2008 ul g a R om an i ar y H un g ic ub l Re p C ze ch Po la nd 0 FDI inflow to Poland (EUR bn) and its sources Geographical sources of FDI inflow 17.2 15.7 10.3 10.2 8.3 8.3 6.4 2000 2001 EU 85.6% 6.3 4.4 4.1 2002 2003 2004 Other countries 14.4% 10.0 2005 2006 2007 2008 2009* I-VI 2010* Geographical sources of FDI inflow (in EUR bn) *estimates FDI split (in %) Netherlands Manufacturing 31.1% 22.0 Germany 18.1 France 12.5 Luxembourg Construction 2.2% 10.0 USA 7.1 Sweden Services 60.2% Other 2.9% Electricity, gas & water 3.6% 5.3 UK 4.4 Italy 4.3 Austria 4.1 Belgium 3.8 Source: National Bank of Poland 2010 Services and Manufacturing Hub in Poland (1) Automotive White goods Electronics Services and Manufacturing Hub in Poland (2) Aviation BPO R&D Investment Climate in Poland 4,5 4,0 4,0 3,8 3,5 3,7 3,6 3,6 3,4 3,3 3,3 3,3 3,2 Rate 3,0 2,5 2,0 1,5 1,0 0,5 0,0 ze st s ate nel il ity ts it es ate nce si ze t si tab r co est sta son nen nt s cli m i ket s r l u r ke e o r t s l e a o a a p n s a m e m m dp me itic Lab est al a of r com EU ish lif ie est Pol Inv nci se a v nd a a u a Pol n n I h i Q c F cks Pur st o , s l er ia Mat • The climate was rated 3.3 out of 5 points (first improvement in 3 years) • No category rated worse than in previous survey • Biggest achievements in categories rated earlier as the weakest. Source: PAIiIZ, 2007-2009 Poland still is very attractive in the opinion of experts Country Place in EM 20 Index 2009 2008 Manufacturing Chile 1 9 Bulgaria 2 2 Malaysia 3 13 China 4 14 Poland 5 15 Services Slovakia 1 6 Chile 2 2 Poland 3 1 Bulgaria 4 5 Malaysia 5 9 Source: PricewaterhouseCoopers EM 20 Index 2008, 2009 ► Economic crisis is only an episode ► Stronger currency and rising wages in the long run imply that Poland will lose its costcompetitiveness again in the coming decade ► In the coming decade Poland can offer access to educated and skilled labour force (focus on quality of human capital) ► EU funded infrastructure investments, EU and government support for the new investments (grants for jobs creation, investment outlays in long term assets, exemption from CIT in SEZs, exemption from RET and subsidies for investment in modern services sector Poland among the 25 Most Attractive FDI Destinations According to Corporate Executives Rank (2010/2007) China (1/1) 1,93 USA (2/3) 1,67 India (3/2) 1,64 Brazil (4/6) 1,53 Germany (5/10) 1,43 Poland (6/22) 1,35 Australia (7/11) 1,33 Mexico (8/19) 1,32 Canada (9/14) 1,32 UK (10/4) 1,32 UAE (11/8) 1,29 Vietnam (12/12) 1,29 France (13/13) 1,29 Hong Kong (14/5) 1,28 Other Gulf states (15/17) 1,26 Romania (16/*) 1,26 Czech Rep. (17/25) 1,25 Russia (18/9) 1,24 Saudi Arabia (19/*) 1,23 Indonesia (20/21) 1,22 Malaysia (21/16) 1,22 Chile (22/*) 1,22 Turkey (23/20) 1,21 Singapore (24/7) Egipt (25/*) 1,19 1,19 *not among top 25 in 2007 Index Source: AT Kearney 2010 FDI Confidence Index World Investment Report 2010 Poland among 12 most attractive countries for investors Poland’s main strengths against global competitors according to UNCTAD: • Dynamic market growth of the internal • Size of the local market • Access to markets international regional • Availability of skilled work force • Presence of suppliers and partners • Competitive investment incentives system Source: UNCTAD, World Investment Report 2010 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% Small enterprises can enjoy maximum intensity limits increased by 20 percentage point, medium-sized companies by 10% Forms of state aid in Poland I. Government grants through individual negotiations individually approved and granted by the Ministry of the Economy based on the Council of Ministers’ Resolution II. CIT exemption in Special Economic Zone only available in Special Economic Zone (SEZ) III. Real estate tax exemption subject to negotiation with the local authorities only in case if the investor is the owner of the building (provided by the Commune Council) IV. Cash grants available through EU Funds subject to negotiation with different managing institutions depending on the investment project key parameters All above presented instruments can be combined together however the total amount of state aid cannot exceed the maximum aid intensity Special Economic Zones A special economic zone (SEZ) is a designated area in which manufacturing or distribution activities can be conducted on preferential terms The purpose of SEZs is to support regional development Currently, there are 14 SEZs in Poland, each consisting of several subzones Total area of all SEZ – 20 000 hectares SEZ will operate until 2020 Permits to conduct activities in SEZ are issued by the authorities of each SEZ Minimum investment: EUR 100,000 Possibility of including the land selected by an investor into SEZ Benefits from obtaining a permit to conduct activities in SEZ : 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 the investment project Exemption from real estate tax Example: Kobierzyce, Dolnośląskie province Jobs created A form of regional state aid Available in communes which adopted resolutions concerning the possibility of exemption from real estate tax Maximum tax limits in 2010 are: 20.51 PLN/sq.m. for buildings, 0.77 PLN/sq.m. For land and 2% of construction value. In each commune tax rates are set by local authorities The exemption usually depends on the amount of new workplaces created Full exemption <5-50) 1 year <50-250) 2 years <250-500) 3 years <500-1000) 4 years 1000 and more 5 years Government support system Investment grant investment value of at least 160 m PLN and creation of at least 50 new jobs investment value of at least 1 bn PLN and creation of at lest 500 new jobs for investment not representing priority sectors Employment grant creation of at least 250 new jobs and investment value of at least 40 m PLN – in priority sectors creation of at least 500 new jobs and investment value of at least 1 bn PLN for investment from outside priority sectors creation of at least 250 new jobs in BPO sector creation of at least 35 new jobs for higher educated employees and investment value of at least 3 m PLN in R&D sector Supported sectors: automotive aviation biotechnology BPO, R & D, IT & electronics More than EUR 87 billion in 2007-2013 Operational Programmes will be financed from the EU Funds (more than EUR 67 bn) and Polish contribution (over EUR 20 bn) 24,8% 41,9% 1,0% 1,9% 3,4% 12,4% 14,5% Infrastructure and Environment Human Capital Innovative Economy Eastern Poland Development Programmes of the European Territorial Cooperation Objective 0,80% Regional Operational Programmes OP IE – Measure 4.5 – Support for investment of considerable importance to the economy 4.5.1. Support for investment in the production sector New investment of innovative nature (e.g. innovative technologies, innovative products) involving purchase or implementation of a technological solution which has been applied in the world for a period of no more than 3 years or the sale value of products or services produced on the basis of this technology in the world does not exceed 15% of world sales in the given industry and which meets all the following conditions: - eligible expenditure of no less than PLN 160 million, and - net increase in jobs of no less than 150 persons Maximum level of support up to 30% of total eligible expenditures OP Human Capital - Subsidies for HR development OP Human Capital EUR 11.5 bn (EUR 9.7 bn – EU) • • • • • Increasing employment and adaptability of enterprises and their employees, as well as upgrading the general level of education, reducing areas of social exclusion and supporting the development of administrative structures of the state. Example: Measure 8.1. Development of staff and enterprises in regions (general and specialist training and consultancy services related to training for managing officers and enterprises staff) Beneficiaries: Entrepreneurs, Training institutions, Labour Market institutions, NGO’s and others Source: EU Structural Funds in Poland, Ministry of Regional Development General conditions for benefiting from regional aid The application for aid has to be submitted before work on the project starts The beneficiary of aid must provide a financial contribution of at least 25% of the eligible costs The investment has to be maintained for at least 5 years from the date of its completion (3 years in case of SMEs) Each newly created job has to be maintained for a period of at least 5 years from the date of its creation (3 years in case of SMEs) It is possible to combine various forms of regional aid however the total aid amount cannot exceed the admissible level Labour market instruments – example of the horizontal aid Labour market instruments: • Reimbursement of costs of workplace equipment • Vocational training for adults • Reimbursement of the costs of social insurance contributions • Subsidized works • Apprenticeship • Reimbursement of the commuting costs • Reimbursement of accommodation costs Why Poland? Summary Strategic location – gateway to EU Economic and political stability Availability of skilled human resources Effective incentives system including EU-Funds Agency’s offer Investment process Considering of investment Long list of countries Short list Investment decision Agency’s offer • marketing campaigns, investment seminars, work-shops, study tours • co-operation with Polish Embassies abroad • PM assistance • site visits • macroeconomic and sectoral data, information on financial incentives, SEZ and EU funds • assistance in obtaining financial support from the state government • co-operation with SEZ • date base of suppliers and business partners and real estate data base • after-care services • ombudsman for foreign investors Investment projects assisted by PAIiIZ Investment projects services by the Agency that decided to locate in Poland in 2009: • Number: 36 • Investment value: EUR 887,2 M • New job places: 9 706 • Sectors: • BPO and R & D • machinery • energy • Origin of investment: • US • Germany • Sweden Source PAIiIZ, 2010 Success cases in 2009 Sector: renewable energy Investment : 40 M EUR Employment: 380 Location: Goleniów Sector: chemical Investment : 54 M EUR Employment: 60 Location: Gdańsk Sector: machinery Investment : 64 M EUR Employment: 400 Location: Stargard Szczeciński Sector: aviation Investment : 94 M EUR Employment : 400 Location : Rzeszów Sector: BPO Investment : 18 M EUR Employment: 2000 Location: Wrocław Sector: BPO Investment: 3 M EUR Employment: 300 Location : Kraków Secotr: BPO Investment : 1,15 M EUR Employment : 250 Location : Zabierzów Sector: FMCG Investment : 10 M EUR Employment : 300 Location : Tarnów Success cases in IQ 2010 Sector: Services Investment : 1,5 M EUR Employment: 60 Location: Szczecin Sector: Food Processing Investment : 37,5 M EUR Employment: 240 Location: Swarzędz Sector: BPO Investment : 3 M EUR Employment: 150 Location: Gdańsk Sector: BPO Investment : 1,5 M EUR Employment: 250 Location: Bydgoszcz Sector: BPO Investment: 1 M EUR Employment: 1 100 Location : Wrocław Sector: BPO Investment : 8,1 M EUR Employment : 620 Location : Warszawa Sector: Electronics Investment : 10 M EUR Employment : 130 Location : Bielawa Thank you for your attention 00-585 Warszawa, ul. Bagatela 12 tel. (+48 22) 334 98 00, fax (+48 22) 334 99 99 e-mail: [email protected]