The rules and regulations applicable to Polish citizens also apply to investors from other countries, like: There are several forms of businesses in Poland, and each type of legal entity offers various advantages for entrepreneurs. The, Real estate purchase is possible for foreigners in Poland if they have a special permit for acquiring ownership. The general domestic WHT rate for dividends is 19%. Its large and attractive internal market – with more than 16 cities with over 200,000 inhabitants from which investors can source people for their operations – has become th… Support for medium and small/ micro enterprises is increased by 10 and 20 percentage points respectively (i.e. So imagine that the bank wants to sell a corporate investment loan (70% risk-weight) of PLN100mn. needs. Poland’s climate is prone to abrupt changes both during the seasons and from year to year. Politically stable, and member of the European Union and NATO, Poland is quickly catching up with the West. However, since Poland's accession to the European Union, foreigners from the European Economic Area have not been required to obtain such a permission, except in relation to the purchase of agricultural or forest land, where a permission was required until 1 … Use of this site constitutes agreement to the record or use. It will be again supported by domestic demand, especially household consumption (59% of GDP), which remains the main growth driver. the most predictable, uniform and appropriate interpretation of the tax law. In the light of the provisions on regional state aid[3], the definition of a new investment reads as follows: If the investment is located in the Mazowieckie voivodeship, only an investment in favour of a new economic activity shall be considered a new investment[5]. The explanatory notes help to establish the best practice of applying the above-mentioned provisions, i.e. Doing business in Poland 65 V. Investing, manufacturing, providing services 83 VI. 107 and Art. Poland Property Investment For Sale "A robust economy - the only European country to weather the global financial crisis." 108 of the Treaty, the following evaluation criteria were adopted for the purposes of defining the size of enterprises: number of employees, turnover, balance sheet total, and independence. Karol Pogorzelski. The decision regarding support, issued at the entrepreneur's request, determines the period of its validity, the subject of economic activity, as well as the conditions that the entrepreneur has to meet. The exemption shall only be applicable to income generated from business activities carried out as part of an investment, covered by the decision on the support. What is more, the Ministry of Finance has published explanatory notes on the method of determining tax-exempt income achieved from economic activity, as defined in the decision on support (referred to in the Act of 10 May 2018 on support for new investments[8]), which clarified, inter alia, how to interpret situations when, because of the way in which a new and existing investment (located on the same site) are integrated, it is impossible to determine the income (revenue) exclusively from the new investment, without taking into account the integrated part of the existing investment (close links). Minimum wages in Poland were 610.79 EUR/Month in the first half of 2020. We can help foreign businessmen open any type of company in Poland. This website uses cookies. The entrepreneur implementing a new investment in a given sector shall be considered to have met the qualitative criteria once he obtains a certain number of points (depending on location - as indicated in the table below) no less than one point for each criterion: In case of any questions about the Polish Investment Zone or other investment incentives, please do not hesitate to contact our team via the contact form. in force until 2026. • In Brownfield investments, adjust your transaction approach to the envisaged acquisition structure. The decision on support is issued for the implementation of a new investment, which meets certain quantitative and qualitative criteria. As a member of the EU, it offers entrepreneurs the opportunity of an easy access to the worlds’ biggest free market area. available across the entire territory of Poland, for companies carrying On this basis, the following classes of enterprises have been established: Companies that do not qualify as micro, small or medium enterprise are classified as large companies. Unemploy­ment rate in the district/ average unemploy­ment in Poland[11], * and in 122 medium-sized cities losing socio-economic functions and in municipalities bordering these cities, SUSTAINABLE ECONOMIC DEVELOPMENT - max. The country borders Russia, Lithuania, Belarus and Ukraine in the north and 5 points, Compliance with the current national development policy, where Poland may gain a competitive advantage. Polish and European Union (EU)/European Economic Area (EEA) based investment funds are also exempted on the grounds of such provision. Therefore, if the entrepreneur simultaneously conducts activities which are not covered, the supported activities have to be organizationally separated and the level of exemption shall be determined on the basis of data (revenues and costs) of the separated activity. Other, Opening a Branch vs. a Subsidiary in Poland, Opening a Textile Manufacturing in Poland, Convert a Sole Proprietorship into an LLC in Poland, How to Start a Franchise Business in Poland, Open a Rental and Leasing Company in Poland, Set up a Business for Sale of Motor Vehicles in Poland, Legal Requirements for a Residence Permit in Poland, Legal Requirements for Obtaining a Work Permit in Poland, Obtain Information about Polish Companies, Restructuring and Insolvency Attorneys in Poland, Purchasing an Agricultural Land in Poland, Shareholders of a Limited Liability Company in Poland, Directors of a Limited Liability Company in Poland, Company Administration in Case of Insolvency. This period is the same for all companies, regardless of the type of economic activity conducted and the size of the company. Foreign Direct Investment in Poland is expected to reach 195100.00 EUR Million by the end of 2020, according to Trading Economics global macro models and analysts expectations. – Minimum holding requirement: 75 percent; – Minimum holding period: 2 years. material recycling of raw materials and modern plastics. Disputes and liability within the corporation. The EU´s 6th largest market by population, Poland has enjoyed 26 years of unbroken growth – driven by strong domestic demand, dynamic exports, improved productivity, foreign investment, a stable banking system, and a significant inflow of EU cohesion funds. Rafal Benecki. A detailed catalogue of exemptions is defined in the regulation on state aid granted to certain entrepreneurs for the implementation of new investments[6]. In Poland, permission for temporary residence is granted for maximum of 3 years and it can be renewed.In order to obtain a residence permit, you must submit an application to the appropriate consulate of Poland, usually found in your country of residence.In case you have already been staying in Poland, you can apply directly to the appropriate regional office of a provincial governor. At the same time, the currently binding Special Economic Zone (SEZ) permits, already granted to investors within the old SEZs shall remain in force until 2026. According to this document, the, Foreign individuals are either natural persons residing abroad, without Polish citizenship or legal persons with a registered office outside of Poland, having legal capacity. This is reflected in the cost of living, significantly lower than in the UK. Real estate investment by foreigners. in medium-sized cities losing their socio-economic functions, and in municipalities bordering these cities, in poviats or cities, with poviat status where the unemployment rate stands at least 160% of the national average unemployment rate (excluding those cities where the Voivode or the Parliament of the Voivodeship are seated), We are a member of the Polish Development Fund Group. The investment dynamics will suffer as well, but its impact on GDP will be offset by new spending pledges. The total stocks of investments in the country stood at USD 236,5 billion in 2019, an increase of 26% when compared to 2010 level. entrepreneurs can be granted tax exemption. machines), cost related to the acquisition of intangible assets (computer programs, licenses, certificates, etc. The country switches to The quantitative criteria (minimum amount of eligible costs) depends on the unemployment rate in the district (poviat) in which the investment is to be implemented (the higher the unemployment rate, the lower the required costs) and the size of the enterprise. And with the minimum eligible business investment being as little as EUR 100,000, polish residency is within reach of more South African families and entrepreneurs than the Golden Visa Programs of Spain, Malta and Portugal. Since 1989, Poland has become a central point of interest to investors, not only for Central and Eastern Europe, but also for the whole of Europe and the world. As a result, we expect CPI to reach 3.2-3.5% YoY in 2020. What is more, PAIH operates a Generator of Investment Offers, in which you can check the conditions for obtaining tax exemption for a specific piece of real estate. There is a ‘minimum income tax level’ for taxpayers holding substantial real estate, which has initial value over PLN 10 million. The decision on the support has to specify the completion date of the new investment, after which the costs of the new investment incurred by the entrepreneur cannot be considered as eligible costs, apart from the two-year labour costs, costs related to renting or leasing of land, buildings, structures and financial leasing, which may be considered as eligible even after the investment completion date. Poland currently has around 300 MW of installed capacity in solar panels. The major difference introduced is that the tax exemption is now available across the entire territory of Poland, for companies carrying out new investments, on publicly as well as privately owned land [2]. According to the new regulations, the following enterprises are eligible for public aid in the form of tax exemptions: The maximum amount of state aid in the form of CIT or PIT tax exemption is determined on the basis of the regional aid map for 2014-2020 (representing the percentage of costs eligible for regional aid): Detailed criteria which need to be met in a given location to obtain a decision on support can be found here. Nevertheless, the growth pace is likely to remain at solid levels. 5 points, Pursuing an economic activity with low negative environmental impact, Supporting the acquisition of knowledge and vocational qualifications and cooperating with vocational schools, Creating specialized jobs in order to pursue an economic activity covered by the new investment and offering secure employment, Creating well-paid jobs and offering secure employment. Poland is one of the most dynamic and fast-growing markets in Europe due to the increasing number of new investment projects. According to UNCTAD's 2020 World Investment Report, FDI inflows to Poland remain stable in 2019, reaching USD 13,2 billion, slightly up from USD 13,9 billion. out new investments, on publicly as well as privately owned land[2]. Poland occupies a pivotal geographic position in central northern Europe and is seen as a stepping stone between the east and the west which gives it many commercial strengths. The. The decision is issued on behalf of the Minister responsible for the economy (currently Minister of Economic Development), by the management of Special Economic Zones in the areas indicated in the ordinance to the Act. According to this document, the investment legislation in Poland does not discriminate against foreign investors: they are entitled to the same rights and obligations as Polish entrepreneurs, if they are EU or EEA residents. allowed support for investments in areas with undeveloped mineral minimum of PLN 5,000). ), 2-year labour costs of newly hired employees. professional electrical and electronic equipment. Capital requirements state that banks must maintain a certain minimum ratio between their capital (of different quality) and risk-weighted assets. The period for which the decision on support is issued shall depend on public aid intensity in a given area. As in the case of SEZ, investments carried out within certain sectors of economic activity shall not be covered by the support system. At the same time, the currently binding Special Economic Zone (SEZ) It is almost 20 years since the establishment of the Special Economic Zones, the Act of the 10th May 2018[1] amended the instruments of income tax exemption (CIT or PIT)in order to Minimum Wages in Poland averaged 317.77 EUR/Month from 1999 until 2020, reaching an all time high of 610.79 EUR/Month in the second quarter of 2020 and a record low of 158.94 EUR/Month in the second quarter of 1999. professional telecommunication and information services. In the long-term, the Poland Foreign Direct Investment is projected to trend around 196900.00 EUR Million in 2021 and 201500.00 EUR Million in 2022, according to our econometric models. Is one of the EU, it offers entrepreneurs the opportunity of an easy access the. 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