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Embassy of Poland Trade & Investment Promotion Section INVESTMENT CLIMATE AND BUSINESS OPPORTUNITIES IN POLAND Krzysztof Turowski, Counsellor, Head of Section Ghent, February 26, 2013 Poland - Key Facts Area: 312 700 sq km – 6th in European Union Population:38,12 million – 6th in European Union Currency: Polish Zloty (1 USD ~ 3.1 PLN, 1 EUR ~ 4.1 PLN) GDP: EUR 371,878 billion (2011) – GUS estimation EUR 280.756 billion (Q3 2012) – GUS estimation GDP per capita: EUR 16 000 (2011) GDP growth: Membership: 1.6% (2009), 3.9% (2010), 4.3% (2011), 2.0% (2012 – preliminary data) EU, NATO, OECD, WTO, Schengen Zone Competitive Advantages Location & economic fundamentals 1000 km radius 250 mn people strategic location in continental Europe part of trans-European transportation corridor third fastest growing EU country in 2010 38 million consumers 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 (EUR 90 bn) 2000 km radius 550 mn people Polish economy in figures – GDP growth in recent years * Preliminary data Polish economy in figures – inflation rate Source – Central Statististical Office EU 27 average in 2012 = 2,6%* * Provisional data - source Eurostat Polish economy in figures unemployment rate Pomorskie 12,4% 2012 13.4% Warmińsko-Mazurskie 19,5% Zachodnio-Pomorskie 16,7% Podlaskie 13,8% Małopolskie 10,6% Source: Central Statistical Office, as of September 2012 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 Podkarpackie 15,1% 0 04 Śląskie 10,4% Świętokrzyskie 14.8% 10 20 Opolskie 13,2% Lubelskie 13,0% 03 Łódzkie 13,2% 20 20 Wielkopolskie 9,1% Dolnośląskie 12,5% 15% > 11-15 10% < Mazowieckie 10.2% 02 Lubuskie 15,1% 20 Kujawsko-Pomorskie 16,7% Tax rates • Corporate Income Tax (CIT) rate 19% • Personal Income Tax (PIT) rate 18% and 32% • Value added tax (VAT) basic rate: 23% reduced rates: 8%, 5% export rate: 0% • Social Security Tax paid by employer between 19.48% and 22.14% Corporate income tax rates across Europe Bulgaria Ireland 10% 13% Latvia 15% Lithuania 15% Romania Poland 19% Hungary 19% Slovakia 19% Estonia Entrepreneurs in Poland pay one of the lowest CIT in Europe 16% 21% Czech Rep. 20% Slovenia 20% Ukraine 25% Netherlands 26% Finland 26% Sweden UK Spain 26% 28% 30% Germany 33% France 33% Belgium Source: www.wodlwide-tax.com 34% Polish economy in figures – foreign trade in EUR billion * Estimation – Ministry of Economy Polish economy in figures – trade exchange with the EU countries Export 1. Germany: 35 650,34 2. U.K: 9 552,38 3. Czech Rep: 8 910,15 4. France : 8 274,55 5. Italy: 6 901,83 6. Netherlands: 6 340,71 7. Sweden: 3 757,54 8. Slovakia: 3 637,22 9. Hungary: 3 428,84 10. Belgium: 2 927,69 Import 1. Germany: 32 057,52 2. Italy: 7 785,80 3. France: 6 010,20 4. Netherlands: 5 833,43 5. Czech Rep.: 5 542,53 6. U.K.: 3 683,28 7. Belgium: 3 381,77 8. Slovakia: 3 166,09 9. Spain: 2 962,14 10. Sweden: 2 852,17 Polish-Belgian commercial turnover: 6 309,46 (9th place) Preliminary data of the Ministry of Economy; in EUR million FDI flows worldwide & in Poland in 2011 (bn USD, UNCTAD) World Poland Source: UNCTAD, 2012. World Investment Report 2011 World’s most attractive destinations for Foreign Direct Investments Rank 2011 (2010) Source: World Investment Report, 2011 Country 1 China 2 USA 3 India 4 Brazil 5 Russia 6 (12) Poland : : 9 Germany 13 UK 14 Singapore According to UNCTAD the key factors attracting FDI to Poland are: • rapidly expanding domestic market • size of the domestic market • flexible & skilled labour force • high quality/cost ratio Growth reasons: 1. Cash reserves of MNCs 2. Restructurization / Delocation 3. Undervalued companies Investment attractiveness of Poland – strengths Source: AmCham, KPMG Investment attractiveness of Poland – weaknesses Support from government institutions 0,00 -0,20 -0,40 -0,60 -0,80 -1,00 -1,20 -1,40 Source: AmCham, KPMG Simplicity of tax system Red tape Quality of railway system Quality of road system Forms of regional aid Tax breaks CIT exemption in Special Economic Zone Real estate tax exemption Cash support Government grants through individual negotiations Cash grants available through EU Funds 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 Government grants Program of support of investments of considerable importance for Polish economy Production Modern services automotive ICT electronics SSC aviation BPO biotechnology R&D activity „big investment” in other sectors Purpose of support development of innovativeness and competitiveness of Polish economy Result of support 50 programmes of total amount 13,5 bn PLN (since 2004 r.) 33,7 thous. of new jobs Source: PAIiIZ, Ministry of Economy Students and graduates 20 m people aged 35 and less 455 higher education institutions almost 2 m students • 18 universities more than 430 thous. graduates every year • 22 technical universities more than 90% of students know foreign • 95 academies of economics growing number of science students languages Main academic centers Students in Poland TRI-CITY OLSZTYN SZCZECIN City BIALYSTOK Students Graduates BYDGOSZCZ/TORUN Warszawa 276 000 65 300 Wroclaw 146 000 30 000 Katowice 112 000 23 500 Krakow 185 000 35 500 101 – 150 Poznan 137 500 33 000 51 – 100 Tricity 95 000 20 500 Lodz 120 500 27 500 WARSZAWA POZNAN ZIELONA GORA LODZ LUBLIN WROCLAW 201 > KIELCE OPOLE KRAKOW KATOWICE No. of students (thousands) 151 – 200 RZESZOW 50 < Source: Central Statistical Office Why Poland? Summary Strategic location – gateway to EU Economic and political stability Availability of skilled human resources Innovative economy Effective incentives system including EU-Funds Thank you for your attention! Trade & Investment Promotion Section Embassy of Poland in Brussels Av. de l’Horizon 18 1150 Brussels Phone +32 2 771 67 54 Fax +32 2 771 18 39 E-mail:[email protected] www.brussels.trade.gov.pl