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POLISH INFORMATION AND FOREIGN INVESTMENT AGENCY Investment incentives in Poland Sławomir Majman President of the Board August 2009 Poland - Key Facts Area: 312 700 sq km – 6th in European Union Population: 38,12 million – Currency: Polish Zloty (1 EUR ~ 4.7 PLN) GDP total: USD 567.4 billion (2008) 6th in European Union GDP per capita: 17,560 USD (PPP, 2008) GDP growth: 6.7% (2007), 4.8% (2008), 2.0% (2009, EC forecast) Membership: EU, NATO, OECD, WTO, Schengen Zone Competitive Advantages Location & economic fundamentals strategic location in continental Europe part of trans-european transportation corridor GDP growth twice the EU average 38 million of consumers 9.9% growth of retail market in 2008 1000 km radius 250 mn people Labor force young, well-educated work force ca 1.9 million of university students 455 universities & high education schools Investment incentives 14 Special Economic Zones over EUR 67 bn from EU 2000 km radius 550 mn people Planed modernisation of roads and railroads network Highways Speedways Existing Under construction 2007 – 2013 2014 – 2020 Concessions or PPP 2007 – 2013 extra projects Source: GDDKiA, MI Railroads Till 2006 2007-2013 2014 – 2020 New constructions After 2020 Air Transport 25 Passengers served by Polish airports (in millions) 19,1 20 22,3 15,4 15 10 20,3 11,5 7,07 7,55 5 0 2003 2004 2005 2006 2007 2008F 2009F • Regional airports on constant rise • Three new international airports may be created within a short proximity to the capital city of Warsaw Source: Civil Aviation Office 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 Maximum state aid intensity Maximum state aid level is calculated as a product of the eligible expenditures (whichever is higher): 40% 50% 40% 50% 40% till 2010 30% as of 2011 50% investment costs or 2 years wage costs 50% 40% Warsaw City 30 % 50% 40% and state aid intensity 50% 50% 50% 40% 50% 50% 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 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 Incentives in manufacturing sector Under what conditions? (at least) What can you get? Investment volume Job creation Investment grant PLN 160 m 50 new jobs Job creation grant PLN 40 m 250 new jobs EU funds PLN 160 m 200 new jobs Corporate Income Tax Exemption EUR 100 000 Real Estate Tax Exemption depends on the commune Incentives in services sector Under what conditions? (at least) What can you get? Investment volume Job creation Job creation grant PLN 40 m 250 new jobs EU funds -- 100 new jobs Corporate Income Tax Exemption EUR 100 000 Incentives in R&D Under what conditions? (at least) What can you get? Investment volume Job creation Job creation grant PLN 3 m 35 new jobs EU funds PLN 2 m 10 new jobs Corporate Income Tax Exemption EUR 100 000 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. Financial allocation of EU funds to new mebers states in years 2007-13 Source: PAIiIZ & European Commission European Funds in Poland in 2007- 2013 13% 1% 11% 3% 43% 28% 1% ROP OP Development of Eastern Poland OP Human Capital European Territorial Cooperation OP Innovative Economy OP Infrastructure & Environment TA Investment types Innovative investments OP IE Trainings OP HC Research & Development OP IE Environment protection OP I&E Investments of an innovative nature aimed at establishing an enterprise, its development, production diversification, or implementation of a fundamental change in the overall production process together with the use of innovative technological solutions. Employees trainings, including e-learning and postgraduate studies (also MBA), and related advisory, internship and traineeship. Research & development investments consisting in research and implementation of the research results, as well as investments in the development of B+R activity of the enterprise (e.g. establishing Research & Development Centres). Investments related to environmental protection aimed to help the enterprise meet the environmental protection standards and investments consisting in creating energy from renewable sources and biofuel production. Investment attractiveness of cities and regions Best cities in terms of value for money 2007 2006 Warszawa 1 1 Prague 8 4 Paris 16 17 Madrid 10 12 London 18 Lisbon Top 10 Most Cost Effective 1 Warszawa 2 Kraków 28 3 Wrocław 3 2 4 South of Poland Budapest 5 6 5 Prague Bucarest 2 2 6 Budapest Berlin 4 8 7 Sofia 12 19 8 Bratyslava 9 Amsterdam Source: Cushman & Wakefield, European Cities Monitor 2007 10 Top 10 Best Economic Potential 1 Luxemburg 2 Tallin 3 Paris 4 London 5 Region Pardubice Tallin 6 Kraków Bucarest 7 South of Poland 8 Villnius 9 Riga 10 Gorna Oryahovitsa Source: Financial Times, European Cities & Regions of the Future 2008/09 Investment attractiveness - 2008 Production sector Modern services sector Żródło: IBNGR, 2008 "The choice of Poland was decided above all, due to its excellent location and the close proximity of the central and eastern European markets. What was extremely important for us, was the availability of young, highly qualified people and our earlier positive experiences of Poles working for us in Dublin and Limerick". Sean Corkery, Vice President of Dell for European, Near Eastern and African Production "We want to engage in development of Polish economy and employ Polish talents. Microsoft plans long-term investments in this region." William H. Gates, President of Microsoft Corporation "Poland was chosen as a location for the new plant after evaluation of many factors, not only the ones depending on costs. Poland stole the show because of wide road infrastructure." Judith Pickering, Director of Investment Programme at Cadbury Schweppes Poland: a place to be • Poland is 13th - most popular tourist destination in the world from Germany 29,22 from EU 15 countries Foreigners’ visitis in Poland 2007 Main tourist destinations: from EU 12 countries 2,15 10,23 8,32 1,03 from Russia, Belarus, Ukraine from other countries Source: Institute of Tourism May 29, 2007 Foreign visits in Poland (2007): 50,93 mln • • • • Kraków Wieliczka Salt Mine Zakopane Warsaw Why Poland? Summary Strategic location Cost effectiveness Great number of high potential human resources EU-Funds (110 bn USD for the period of 2007 - 2013) 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 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]