In Poland
Structure of strategic directions for 2007-2013
PURCHASE OF REAL ESTATE BY FOREIGNERS
How to do business in Poland / UNIDO
Law
THE INVESTMENT CLIMATE IN POLAND
As a member of the EU, NATO and OECD, Poland is a trustworthy and reliable partner for international business. A high inflow of foreign direct capital is a direct evidence of a country’s attractiveness to foreign investors. Seventeen years after the successful introduction of economic reforms, Poland is the leader in Central Europe in terms of foreign direct investment. According to the National Bank of Poland (NBP), the inflow of foreign direct investments in 2006 amounted to 13.9 billion $.
In last years the Polish economy was developing with the fastest pace since 1997. Good economic situation had direct influence on record-breaking revenues and financial results of the enterprises.
Poland is considered to have the strongest economy of all eastern European nations, with an annual economic growth ratelol of over 6.0%.
http://www.forbes.com/markets/2007/09/24/poland-electrabel-vattenfall-
markets-equity-cx_vr_0924markets10.htm
Freedom Rank 26 (70.8%) in US Heritage Foundation „Index of Economic Freedom” 2008:
Poland has steadfastly pursued a policy of economic liberalization throughout the 1990s with mixed results. The privatization of small and medium state-owned companies and a liberal law on establishing new firms has encouraged the development of the private business sector, which has been the main drive for Poland’s economic growth. The agricultural sector remains handicapped by structural problems, surplus labor, inefficient small farms, and a lack of investment. Restructuring and privatization of “sensitive sectors” (e.g., coal), has also been slow, but recent foreign investments in energy and steel have begun to turn the tide. Recent reforms in health care, education, the pension system, and state administration have resulted in larger than expected fiscal pressures. Improving this account deficit and tightening monetary policy, with focus on inflation, are priorities for the Polish government. Further progress in public finance depends mainly on privatization of Poland’s remaining state sectors, the reduction of state employment, and an overhaul of the tax code to incorporate farmers, who currently pay significantly lower taxes than other people with similar income levels.
In second half of the 1990.s a very fast, over growth of 20% in gross fixed capital formation was slowed down as a consequence of the Russian crisis and in the period of economic slowdown in 2001-2002 spending was significantly lowered. First signs of economic recovery could be observed starting from the second half of 2003 however actual investment activity was further revived in the following years, yet a little bit slower than expected. In 2006 gross fixed capital formation went up by 16.5% against 5% decline on average annually in 2001-2003 and growth at the stable level of 6.5% in 2004 2005. The beginning of 2006 was not as optimistic as the end of the previous year, yet on quarterly basis an upward trend could be observed. The result achieved in the fourth quarter (19.3% growth) was impressive, the more so because the fourth quarter of the previous year also brought significant growth in investment (10.1%). The biggest growth in the gross fixed capital formation was noted in the transport sector . by nearly 50% (in the enterprises employing more than 9 people). Yet the biggest share still constitutes capital formation for equipment and machinery and the growth in this sector amounted to 20%. Slight .delay of investments in the cycle. is a phenomenon typical for all market economies. It is so because, among others, at the beginning of every up cycle companies have spare production capacity allowing increasing production when demand is reviving, with no immediate need to invest. In the similar manner they cannot immediately stop or start investing when there is a negative or positive unanticipated external shock and thus their reaction to shocks is usually slightly late. Investment progress was possible thanks to fast development of all branches of the economy.
Foreign direct investments in Poland had also an important role in privatization processes taking place in Polish companies. The hampered inflow of investments in 2000-2003 was connected with privatisation slow down. The situation reversed in 2004. The factor that encouraged foreign investors to locate the capital in our country was the integration with the European Union.
Entrepreneurship in Poland 2007
Ministry of Economy, Analyses and Forecasting Department
Polish law is rather favorable to foreign entrepreneurs. The government offers investors various forms of state aid, such as: CIT tax at the level of 19% and investment incentives in 14 Special Economic Zones (among others: income tax exemption, real estate tax exemption, competitive land prices), several industrial and technology parks, the possibility to benefit from the EU structural funds, brownfield and greenfield localizations. According to the National Bank of Poland (NBP) the level of FDI inflow into Poland in 2006 amounted to 13,9 billion Euro.
One of the main reasons why investors tend to choose Poland is its location at the very heart of continental Europe, part of the trans European road network and easy access to 250 million consumers within a radius of 1000 kilometers. Poland is a significant market of 38 million consumers driving 10% annual retail market growth. In the first quarter of 2007 Polish economy recorded the GDP growth at 7%, which makes it twice that of the EU average.
According to the Ernst & Young report, Poland ranks 7th in the world in terms of investment attractiveness. According to the OECD (www.oecd.org) report, in 2004 Poles were one of the hardest working nations in Europe. In the first half of 2007 the indicator of detected economic crimes was 95,3%. It is estimated that the selection of Poland as the co-organizer of the European Football Championships in 2012 will speed up a lot of investments carried out in Poland in the coming years. It will mainly be the investment in sectors such as road, railway and air infrastructure, as well as in the hotel, tourism, gastronomy and recreation industry.
Polish government has a specialized body that deals with foreign investors. Polish Information and Foreign Investment Agency offers support for foreign investors - assists and helps investors in all the necessary legal and administrative procedures.
BusinessmanTime.com / Marcis Skadmanis
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