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Steuerberaterin (Polen)
Partnerin
Phone: +48 22 696 28 00
E-Mail
Steuerberater (Polen), Rechtsanwalt (Polen)
Partner
Phone: +48 22 244 00 20
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Wirtschaftsprüferin (Polen)
Partnerin
Phone: +48 (71) 60 60 000
Fax: +48 (71) 60 60 131
E-Mail
Doing business in Poland
For years, Poland has been perceived as a country of remarkable investment potential, of particular interest to both private and corporate foreign investors. Seen as being synonymous with dynamic development, "green island" in times of crisis, a convenient central location in Europe, flexibility of the market players, a large domestic market with a high share of domestic demand, cheap manpower and qualified management staff – Poland ranks as one of the most attractive investment locations for a reason. But that's not all. Poland goes on to offer a variety of additional benefits in the form of preferential tax rates and reliefs for enterprises. Poland's membership in the European Union not only encourages intra-Community investment by removing barriers and harmonising the law and reporting systems, but also creates an investment boom fuelled by grants earmarked for business development in Poland. Warsaw, Cracow, Poznan and Wroclaw are the key locations on the worldwide outsourcing map. New foreign investments in Poland prove that doing business in our country simply pays off!
Investing in Poland
Poland is widely seen as one of the most attractive investment locations not only in Europe, but globally. It offers both political and economic stability coupled with the dynamically expanding large domestic market. With the population of over 38 million the country is the 6th economy in the European Union. In addition, it is placed by the United Nations Conference on Trade and Development World Investment Report 2011 among the top locations to attract foreign direct investments (FDI) and ranked the 6th most attractive investment location in the world. In the same report Poland was called “the global top improver in the past year”. In order to enhance the ease of doing business Poland has introduced four significant reforms making it easier to register property, pay taxes, enforce contracts, and resolve insolvency.
Investment Incentives in Poland
Poland is truly open for international business and the government is putting much effort to maintain the country’s reputation for stability and economic responsibility in order to continue to attract investors. Fourteen special economic zones (SEZs) in Poland functioning till 2026 in combination with many industrial and technology parks wait with open arms for investors willing to benefit from tax exemptions and attractive locations they offer.
Foreign enterprises considering Poland as their target destination may benefit among others from the following investment incentives:
- structural funds and national programmes offering in Poland non-repayable grants for: research and development (R&D), implementation of innovative investments, digitalisation of business entities, environmental protection, logistics and renewable energy sources,
- technology parks with infrastructure for R&D companies,
- income tax exemptions for business activity in SEZs,
- preferential tax allowances for R&D centres,
- preferential tax allowances to purchase new technologies.
A. Special Economic Zones (SEZs) in Poland
There are fourteen special economic zones (SEZs) in convenient locations throughout Poland. These are separate and uninhabited areas where business activity may be conducted under preferential conditions defined in the Act on Special Economic Zones of 20 December 1994. All Poland’s existing SEZs were established in the 1990s in order to:
- attract foreign investors to Poland,
- create new jobs, in particular in the regions with a high unemployment risk,
- develop and implement new technologies,
- improve the competitiveness of products and services,
- speed up the economic development of regions,
- manage the property and infrastructure of liquidated companies.
B. Non-Repayable Investment Grants in Poland (Poland 2014-2020)
Belonging to the top target countries in the EU Poland has been granted a record sum of more than EUR 82.5 billion for the years 2014–2020, which is currently the highest allocation in the history of the EU! All the money is made available for investors in form of national programmes and structural funds.
The EU aid in Poland is extremely attractive because:
- it is non-repayable,
- it gives an opportunity to partly finance up to 70% of eligible costs,
- it may total up to EUR 10 million,
- it is available for numerous areas: from research and development to direct investments and IT.
C. Highly-qualified labor force and competitive employment costs in Poland
Poland has one of the best educated societies in Europe .The young generation is well educated, ambitious, multilingual and highly motivated. The Polish economists, engineers, IT specialists and scientists are appreciated by employers who employ them in IT companies, R&D centres and scientific institutes. In addition, the wages in Poland are up to four times lower than those in Western Europe. These are the factors why Poland is seen as an attractive location for business process outsourcing investments and chosen as destination place by international corporations for their shared services centres. Easily available highly-qualified workers make many investors perceive Poland as the best quality location for their manufacturing projects.
Taxation in Poland
The main tax burdens for the business entities in Poland are: corporate income tax (CIT), value added tax (VAT), withholding tax (WHT) and civil law transaction tax (CLTT).
Companies with their registered office or management board in Poland are obliged to pay CIT on all their income. Companies without their registered office or management board in Poland are obliged to pay CIT on income they earn in Poland. The flat CIT rate is 19 per cent.
B. Withholding Tax (WHT) in Poland
The WHT rate is usually 20 per cent. Dividends disbursed from Poland are subject to 19 per cent WHT. Poland has double taxation treaties with over 80 states. Reduced rates of WHT or tax exemptions may be claimed under those treaties.
The basic VAT rate applicable to most goods and services is 23 per cent. The rate of 8 per cent applies to pharmaceuticals and medical products, most foodstuffs, restaurants and hotel services, magazines and newspapers as well as transportation services and residential housing. There’s also a reduced rate of 5 per cent applicable to unprocessed food and books.
D. Civil Law Transaction Tax in Poland
Taxable and subject to the civil law transaction tax are transactions where ownership of things and property rights are transferred. These include: sale and loan agreements, exchange contracts, mortgages, partnership agreements and articles of association. Any changes to the above listed agreements causing the same effect as taxable transactions are also subject to the civil law transaction tax.
Accounting and Financial Reporting in Poland
Business entities registered or operating in Poland are obliged to keep accounting records in the Polish language and in the Polish currency. This also applies to financial statements. The Polish Accounting Act has been amended a number of times in order to be harmonised with the IFRS (International Financial Reporting Standards). However, differences are still observed. It is allowed and in certain cases required to use the IFRS as the reporting framework.
Business Entities in Poland
The most common form of conducting business activity for both foreign and domestic investors remains a limited liability company (LLC). The minimum share capital required to establish a LLC is PLN 5,000 (EUR 1,200). Company formation and registration procedure take usually no longer than one month. In addition, available and ever more popular are shelf companies (LLCs). They can be ready for trading even within a few days.
Capital Markets in Poland
The official capital market in Poland is the Warsaw Stock Exchange (WSE) established in 1991. Throughout the whole period of its operations WSE has become one of the most dynamic IPO markets in Europe with over 400 companies listed on its Main Market. Moreover, WSE's derivatives trading platform has grown to become the largest in the CEE.
What is important Poland has set up a public body to supervise its financial market. The Polish Financial Supervision Authority (FSA) supervises not only capital markets, but also pension schemes, electronic money and the insurance market. The FSA acts for protection of interests of market players and ensures stability, transparency and security in the Polish financial market.
To help you fully take advantage of the investment opportunities in Poland, we offer professional legal and tax advice on choosing the best form for your business in Poland. In addition, we invite you to contact our offices (in Gdansk, Gliwice, Cracow, Poznan, Warsaw and Wroclaw) for any and all information relevant to running a business, or to find out more about our legal advice in Poland and tax advice in Poland. We also encourage you to contact us for an analysis of possible benefits arising from grants in Poland, accounting outsourcing in Poland as well as HR and payroll services in Poland.
