Konsulat
Republiki Chorwacji
w Rzeczypospolitej Polskiej
Kraków
Headline NEWS

INVESTMENT INCENTIVES IN POLAND

 

1. Introduction
The Government of Poland together with state-owned and local self-government institutions have got a system of investment stimuli which in fact are means of assistance for setting up and running business activity within a specified investment project. The stimuli are intended to increase innovation and competitiveness of Polish economy as well as to raise a number of workplaces. The quantity of these stimuli depends on economy sectors, location of business in Poland (the best stimuli are in Eastern Poland), on so-called eligible costs (in Polish: koszty kwalifikowane) which includes the cost of project and of new-employed work forces. These cost categories, either one or both, mean the base for calculation of maximum amount of tax exemption

2. System of capital expenditure stimuli
These are:
- EU grants
- Government grants
- income tax exemption (CIT exemption)
- real estate tax exemption

3. Government grants

There are two kinds of Government grants in Poland – for employment and for investment (capital expenditure). Their amounts depend on investment type and may reach some tens of millions EUR. However, only those businessmen who deal in the following sectors are allowed to apply for the grant:
1. motor vehicle sector,
2. electronic and household goods,
3. aviation sector,
4. biotechnology,
5. agriculture and food industry,
6. modern services sector,
7. research and development.

Also, businessmen of other sectors who plan to start production of minimum eligible cost of PLN 750 million and 200 new workplaces or PLN 500 million and 500 workplaces (these are called significant projects, in Polish: inwestycje znaczące) may apply for support.

4. Income tax exemption
If a foreign investor wishes to open business in one of the Special Economic Zones (SSE, Specjalna Strefa Ekonomiczna) in Poland, he/she shall have the right to income tax exemption (Income tax is a tax levied on income earned from business activity). Depending on the ownership form of a business, there are taxes called CIT (legal entities) and PIT (natural persons).

In Poland, there are regions called Special Economic Zones (SSE); there, foreign and Polish investors can run business and receive so-called regional assistance – this means a tax exemption (either CIT or PIT) on income derived from activity shown on an official permit. The SSE zones are formed in order to speed-up economic development of the said regions by attracting new business, by developing exports and creation of new workplaces. At present, there are 15 such zones in Poland each of which can open sub-zones. Each smallest administration district (gmina = commune) can organize more than one SSE zones and each zone may consist of several areas.

Amount of regional assistance depends on sector of national economy, region of Poland, size of investing entity and so-called 'eligible costs' (cost of project and of new-employed work forces). Within the regional assistance, a businessman may get from 10% up to 50% reduction.

There are more incentives at SSE:
- ready-to-develop plots of land available for competitive prices,
- free-of-charge assistance in getting official decisions required to start business
- exemption from real-estate tax (if a relevant commune authorities passed such a resolution).

5. Real estate tax exemption
Tax exemption and release from some local duties are essential forms of stimuli for investors in Poland. These are decided by local authorities who are free to do it.

Real estate tax is paid for:
1. land,
2. buildings or their parts,
3. other structures or their parts used or otherwise related to business activity.

These charges in Cracow in the year 2016 are as follows:
- land: PLN 0.89 / 1 square meter,
- buildings and their parts: PLN 0.75 / 1 sq.m.,
- other structures or their parts used/related to business activity: 2%.

6. Other benefits awaiting foreign investors

6.1. Industry and Technology Parks
6.2. Research and Development Centres
6.1.1. Industry Park (in Polish: Park przemysłowy): a separated area in a city/town/commune where there are ready-to-operate objects, such as buildings, production facilities and roads. Some of them are new objects and some have been left by previous, now liquidated, owners. They are intended for investors who are interested in starting business in that city, town or commune. Mainly small and medium-size entities do use the Parks which function as local assistance and support centres for them. Thanks to the Parks, both the offers for business and for employees are greater in the region.
6.1.2. Technology Park (Park technologiczny): also a special area equipped with objects and infrastructure facilities similar to those in Industry Park but intended to serve business entities with knowledge and technology developed and owned by scientific institutions. Most often, the following are services offered to business by Technology Parks:
- consulting in the area of establishing business units and divisions,
- creating conditions and circumstances necessary to run business in the Park,
- transfer of technology
- supporting business in employing results of scientific research for innovative projects.
6.1.3. Industry and Technology Park (Park przemysłowo-technologiczny): this is an entity which realizes functions of both industry and technology parks.
6.2.1. Research and Development Centres (in Polish: Centrum Badawczo-Rozwojowe CBR): it's a type of business activity of those entities, whose main filed is a scientific and research profile. The following are necessary requirements for being awarded with the said status: net revenues from sale of goods, products and financial operations in the previous year – not less than EUR 1.2 million and at least 20% of the revenues must be derived from sale of research-development services. The CBR units are free from real estate tax and may decrease their business tax base by a sum they allocate to innovation fund. Only those entities which run innovative activities, particularly in scientific-research area, are entitled to apply for 'CBR' status.

 

Poland has one of the best business incentive system and, being one of the biggest European countries starting its economic development, is open to various ideas and activities in not quite developed areas. It is a chance for Croatian business to make use of all these possibilities right now.

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