Register | Advertise
| Global BPO | Technology Centers | Biotech | Agriculture | Green Projects | Manufacturing | Mining |
FDI Agencies Q&A
Polish Investment, EU Support
Author: 123jump.com Staff
FDIhub.com
Last Update: Aug 24, 3:22 PM ET
FDIhub.com
Last Update: Aug 24, 3:22 PM ET
 Krystyna Olesinska |
Polish economy has expanded at a brisk pace in the last five years. Foreign investments have played a key role in expanding employment in manufacturing and business outsourcing sectors...
The Polish Information and Foreign Investment Agency (PAIiIZ) |
''Poland has human capital, which means that we are offering not only an internal market of over 38 mil. inhabitants but a young and educated population, speaking different languages and still not expensive compared with Western European countries.''
Q: How has the Polish economy expanded in the recent years?
A: The Polish economy has expanded significantly in the last five years. In 2007, the GDP expanded at 6.7%, three times more than the average growth in the European Union and in 2008 the GDP grew 4.9%. Poland is one of the two countries in the European Union to expand the economy in the first quarter of 2009 with a growth of 0.8%.
Poland has been affected by the global recession in a “velvet way” (less than other countries) because it is not debt dependent and its growth is driven mainly by internal consumption, the flow of foreign direct investment and the public expenditures. The slowdown of exports in Poland is lower than in other European countries.
The current rate of inflation in Poland is 3.4%. The prices are restrained and we do not expect very strong inflationary pressure in coming months. The main driver that can change significantly the inflation rate in Poland would be the international price of oil.
Regarding the unemployment rate, there are two factors responsible for reducing the unemployment rate in Poland since 2004. First is, the flow of foreign direct investment starting from 2004 because of our accession to the European Union, and second, the very same year labor markets of other European countries opened to Polish employees and many of them left Poland. Currently, the unemployment rate in Poland is growing and due to the global financial crisis was 11.2% in March and has declined to 10.8% in recent months.
Q: What is the growth rate of population and labor force?
A:: Poland has 38 million inhabitants where half of them are below 35 years of age. The population growth rate is 0,02 percentage point and the labor force, which represents about 17 million people, is growing at 0,2 percentage point.
Q: What is the level of foreign direct investment in Poland and what are the most attractive sectors for foreign direct investment?
A: The foreign direct investment stock represented over ˆ130 billion at the end of 2008. We have seen a fluctuation of the flow depending on the economic cycle since 2000. For example, in 2002-2003 there was a significant slowdown in the flow of foreign direct investment mainly due to the global economic weakness in 2001 that had a huge impact in our trade partners like Germany and Russia. Since then we saw a growth in foreign direct investment of ˆ16,6 billion in 2007, the record annual flow. There has been a slowdown in the flow especially in the last quarter of 2008 and the year closed with the investment of ˆ11.4 billion.
There is no privatization, as was the case in the beginning of the 90s. Nowadays, it is mainly about greenfield investment, which means companies decide to build brand new factories, bring in brand new technologies, and according to the economists this is the most valuable type of investment that comes to the hosting country.
The majority of foreign investment in Poland comes from the European Union countries and the rest from U.S. and we have a huge inflows from Asia, namely Japan, China, South Korea and India.
The most attractive sectors for investment in Poland are the, electronic, aviation or aerospace, automotive, machinery, metal processing, and chemical sector. Other sectors of investment are investment in services like banking, insurance, financial intermediation and also offshoring sector like shared service sector, call centers and R&D activities.
The majority of investment flows to manufacturing, real estate and services.
The global recession is a contributing factor to the slowdown in new investment in Poland. However, we expect a lot of global companies will decide to cut costs and offshore some type of activity to Poland as it is still considered a lower cost country.
Poland has around 450 higher educational institutions spread all over the country and huge academic centers producing every year over 400,000 graduates speaking many languages. This is a huge advantage that makes investors more and more aware of opportunities in our country.
We have many R&D centers in telecommunications sector, in pharmaceutical sector, in IT, and in software. We are attracting investors that are looking for highly qualified people with a lot of skills in many different domains. So all this makes Poland a very good prospect for foreign direct investment.
Q: What incentives are offered for greenfield projects by Poland?
A: First of all, the incentive system was adjusted to the requirements indicated by the European Union. However, Poland managed to develop a very attractive incentive system of different types of incentives available in the country, not only tax holidays that are available but also direct subsidies.
The most attractive and interesting form of incentive is direct grants. There are two sources of direct grants. The first is the Polish government’s special system supporting investment of strategic importance for Polish economy. The strategic investment must be made in one of the six sectors that are preferred by the government like automotive, aviation or aerospace, biotechnology, R&D, BPO and electronics. Two types of grants can be offered – employment grant or investment grant. But you have to meet a precise criteria to be eligible for this type of aid.
The second source of direct grants is subsidies co-financed with European funds. We have several operational programs which are dedicated to fulfill different objectives like development of the different type of infrastructure, protection of environment, human resources development, innovative economy which offer different type of subsidies for various type of projects, ex there are instruments to support brand new projects, the most innovative ones that would like to be made in Poland. This is also a very important source of cash grants.
A: The Polish economy has expanded significantly in the last five years. In 2007, the GDP expanded at 6.7%, three times more than the average growth in the European Union and in 2008 the GDP grew 4.9%. Poland is one of the two countries in the European Union to expand the economy in the first quarter of 2009 with a growth of 0.8%.
Poland has been affected by the global recession in a “velvet way” (less than other countries) because it is not debt dependent and its growth is driven mainly by internal consumption, the flow of foreign direct investment and the public expenditures. The slowdown of exports in Poland is lower than in other European countries.
The current rate of inflation in Poland is 3.4%. The prices are restrained and we do not expect very strong inflationary pressure in coming months. The main driver that can change significantly the inflation rate in Poland would be the international price of oil.
Regarding the unemployment rate, there are two factors responsible for reducing the unemployment rate in Poland since 2004. First is, the flow of foreign direct investment starting from 2004 because of our accession to the European Union, and second, the very same year labor markets of other European countries opened to Polish employees and many of them left Poland. Currently, the unemployment rate in Poland is growing and due to the global financial crisis was 11.2% in March and has declined to 10.8% in recent months.
Q: What is the growth rate of population and labor force?
A:: Poland has 38 million inhabitants where half of them are below 35 years of age. The population growth rate is 0,02 percentage point and the labor force, which represents about 17 million people, is growing at 0,2 percentage point.
Q: What is the level of foreign direct investment in Poland and what are the most attractive sectors for foreign direct investment?
A: The foreign direct investment stock represented over ˆ130 billion at the end of 2008. We have seen a fluctuation of the flow depending on the economic cycle since 2000. For example, in 2002-2003 there was a significant slowdown in the flow of foreign direct investment mainly due to the global economic weakness in 2001 that had a huge impact in our trade partners like Germany and Russia. Since then we saw a growth in foreign direct investment of ˆ16,6 billion in 2007, the record annual flow. There has been a slowdown in the flow especially in the last quarter of 2008 and the year closed with the investment of ˆ11.4 billion.
There is no privatization, as was the case in the beginning of the 90s. Nowadays, it is mainly about greenfield investment, which means companies decide to build brand new factories, bring in brand new technologies, and according to the economists this is the most valuable type of investment that comes to the hosting country.
The majority of foreign investment in Poland comes from the European Union countries and the rest from U.S. and we have a huge inflows from Asia, namely Japan, China, South Korea and India.
The most attractive sectors for investment in Poland are the, electronic, aviation or aerospace, automotive, machinery, metal processing, and chemical sector. Other sectors of investment are investment in services like banking, insurance, financial intermediation and also offshoring sector like shared service sector, call centers and R&D activities.
The majority of investment flows to manufacturing, real estate and services.
The global recession is a contributing factor to the slowdown in new investment in Poland. However, we expect a lot of global companies will decide to cut costs and offshore some type of activity to Poland as it is still considered a lower cost country.
Poland has around 450 higher educational institutions spread all over the country and huge academic centers producing every year over 400,000 graduates speaking many languages. This is a huge advantage that makes investors more and more aware of opportunities in our country.
We have many R&D centers in telecommunications sector, in pharmaceutical sector, in IT, and in software. We are attracting investors that are looking for highly qualified people with a lot of skills in many different domains. So all this makes Poland a very good prospect for foreign direct investment.
Q: What incentives are offered for greenfield projects by Poland?
A: First of all, the incentive system was adjusted to the requirements indicated by the European Union. However, Poland managed to develop a very attractive incentive system of different types of incentives available in the country, not only tax holidays that are available but also direct subsidies.
The most attractive and interesting form of incentive is direct grants. There are two sources of direct grants. The first is the Polish government’s special system supporting investment of strategic importance for Polish economy. The strategic investment must be made in one of the six sectors that are preferred by the government like automotive, aviation or aerospace, biotechnology, R&D, BPO and electronics. Two types of grants can be offered – employment grant or investment grant. But you have to meet a precise criteria to be eligible for this type of aid.
The second source of direct grants is subsidies co-financed with European funds. We have several operational programs which are dedicated to fulfill different objectives like development of the different type of infrastructure, protection of environment, human resources development, innovative economy which offer different type of subsidies for various type of projects, ex there are instruments to support brand new projects, the most innovative ones that would like to be made in Poland. This is also a very important source of cash grants.
1 2 3