Special Economic Zones in Poland

February 5, 2013 in Basic Information, General, Investments, Markets, Polish Business, Politics

Special Economic Zones in Poland 300x199 Special Economic Zones in Poland

Picture © nito – Fotolia.com

Poland is a fairly decent place in investing nowadays. With an overall GDP increase and the national economy moving up (although decelerating at present) we may be one of the few places left in Europe worth investment money. As, on the other hand, Poland is quite underdeveloped in many regions, there are 14 Special Economic Zones which aim at rewarding investors with certain public assistance for their investments. It’s certainly something worth checking out.

 

The overall idea for the Special Economic Zones in Poland is to attract investors to certain regions, which may be attractive overall, but at the same time lack workplaces and development money. So the straight deal is – investors create their companies and create workplaces, and the government assists financially. And how does this work exactly?

The public help is in the form of income tax reductions for the company to an amount no greater than 30 – 50% of the qualifying investment amount. The percantage depends on the size of the company – small and medium sized companies get a better deal. Having said that, one has to keep in mind that the overall goverment financing for a company in the EU cannot exceed 70% of the qualifying costs. So if your company is applying, at the same time, for any other form of government financing do remember that those add up and cannot exceed that magical 70% mark.

So what are the qualifying costs for the Special Economic Zones? Two things really: costs of new investments (buildings, factories, machines, etc. provided they are bought new or built from scratch) and costs associated with the creation of new work places (in fact, this means that the overall salary cost will be subsidized for a two year period). Doesn’t sound all that bad, does it?

So what’s the catch? There actually isn’t really one, provided you do your job right. Once a company recieves permission to operate in one of the Special Economic Zones, it has to exist and operate there for the next 5 years (3 years for small and medium companies). And that’s more or less it. Of course, like with any public help, the comapny will undergo more audits from the financing institution, tax people and whoever else. But it still may be worth the hassle.

The Special Economic Zones were supposed to exist only ’till 2014, but a new bill passed about a year ago (if I remember correctly) prolonged this period up until 2020, so there’s still some time left. There are 14 of them and each one is managed by a different company. To get permission to operate in one of the Special Economic Zones, a company needs to apply to those companies. The application as such goes to the Polish Ministry of Economy, but those companies are responsible for managing the applications and the entries.

Apart from offering the obvious tax benfits, Special Economic Zones (or rather the companies that run them) are prepared and ready to help with various other aspects. They house technology incubators, many other companies which may be associated with your business and able to help perhaps through a joint venture and full technical support. If, on the other hand, you plan a big investment, the terrains meant to be industrialized are well connected to the road system and fully equipped with all neccessary media and building approvals.

Below is the list of the Special Economic Zones in Poland – check them out:

For the geographical location of each of those Special Economic Zones you can visit their respective websites (all but one are available in English and German) or check the Invest in Poland website for a map. Of course, the SEZ alone will not make your business prosper, but it can be a nice addition to the overall benefits of investing in Poland (don’t worry, I’ll be talking about the drawbacks as well, it’s not all sweet and shiny).