Embassy of Poland Trade Investment Promotion Section INVESTMENT

Embassy of Poland Trade & Investment Promotion Section INVESTMENT CLIMATE AND BUSINESS OPPORTUNITIES IN POLAND Krzysztof Turowski, Counsellor, Head of Section Ghent, February 26, 2013

Poland - Key Facts Area: 312 700 sq km – 6 th in European Union Population: 38, 12 million – 6 th in European Union Currency: Polish Zloty (1 USD ~ 3. 1 PLN, 1 EUR ~ 4. 1 PLN) GDP: EUR 371, 878 billion (2011) – GUS estimation EUR 280. 756 billion (Q 3 2012) – GUS estimation GDP per capita: EUR 16 000 (2011) GDP growth: Membership: 1. 6% (2009), 3. 9% (2010), 4. 3% (2011), 2. 0% (2012 – preliminary data) EU, NATO, OECD, WTO, Schengen Zone

Competitive Advantages Location & economic fundamentals 1000 km radius 250 mn people strategic location in continental Europe part of trans-European transportation corridor third fastest growing EU country in 2010 38 million consumers Labor force young, well-educated work force ca 11% of university students in the EU 455 universities & high education schools language proficiency increasing labour productivity Investment incentives tax exemptions in 14 Special Economic Zones grants co-financed from the EU (EUR 90 bn) 2000 km radius 550 mn people

Polish economy in figures – GDP growth in recent years * Preliminary data

Polish economy in figures – inflation rate Source – Central Statististical Office EU 27 average in 2012 = 2, 6%* - source Eurostat * Provisional data

Polish economy in figures unemployment rate Pomorskie 12, 4% Zachodnio-Pomorskie 16, 7% Podlaskie 13, 8% Kujawsko-Pomorskie 16, 7% Lubuskie 15, 1% Mazowieckie 10. 2% Wielkopolskie 9, 1% Łódzkie 13, 2% Dolnośląskie 12, 5% Opolskie 13, 2% 15% > 11 -15 10% < 2012 13. 4% Warmińsko-Mazurskie 19, 5% Śląskie 10, 4% Lubelskie 13, 0% Świętokrzyskie 14. 8% Małopolskie 10, 6% Podkarpackie 15, 1% Source: Central Statistical Office, as of September 2012

Tax rates • Corporate Income Tax (CIT) rate 19% • Personal Income Tax (PIT) rate 18% and 32% • Value added tax (VAT) basic rate: 23% reduced rates: 8%, 5% export rate: 0% • Social Security Tax paid by employer between 19. 48% and 22. 14%

Corporate income tax rates across Europe Entrepreneurs in Poland pay one of the lowest CIT in Europe Source: www. wodlwide-tax. com

Polish economy in figures – foreign trade in EUR billion * Estimation – Ministry of Economy

Polish economy in figures – trade exchange with the EU countries Export 1. Germany: 35 650, 34 2. U. K: 9 552, 38 3. Czech Rep: 8 910, 15 4. France : 8 274, 55 5. Italy: 6 901, 83 6. Netherlands: 6 340, 71 7. Sweden: 3 757, 54 8. Slovakia: 3 637, 22 9. Hungary: 3 428, 84 10. Belgium: 2 927, 69 Import 1. Germany: 32 057, 52 2. Italy: 7 785, 80 3. France: 6 010, 20 4. Netherlands: 5 833, 43 5. Czech Rep. : 5 542, 53 6. U. K. : 3 683, 28 7. Belgium: 3 381, 77 8. Slovakia: 3 166, 09 9. Spain: 2 962, 14 10. Sweden: 2 852, 17 Polish-Belgian commercial turnover: 6 309, 46 (9 th place) Preliminary data of the Ministry of Economy; in EUR million

FDI flows worldwide & in Poland in 2011 (bn USD, UNCTAD) World +17 % Poland . 46 + Source: UNCTAD, 2012. 7%

World Investment Report 2011 World’s most attractive destinations for Foreign Direct Investments Rank 2011 (2010) Source: World Investment Report, 2011 Country 1 China 2 USA 3 India 4 Brazil 5 Russia 6 (12) Poland : : 9 Germany 13 UK 14 Singapore According to UNCTAD the key factors attracting FDI to Poland are: • rapidly expanding domestic market • size of the domestic market • flexible & skilled labour force • high quality/cost ratio Growth reasons: 1. Cash reserves of MNCs 2. Restructurization / Delocation 3. Undervalued companies

Investment attractiveness of Poland – strengths Source: Am. Cham, KPMG

Investment attractiveness of Poland – weaknesses Source: Am. Cham, KPMG

Forms of regional aid ü Tax breaks CIT exemption in Special Economic Zone Real estate tax exemption ü Cash support Government grants through individual negotiations Cash grants available through EU Funds

Special Economic Zones A special economic zone (SEZ) is a designated area in which manufacturing or distribution activities can be conducted on preferential terms The purpose of SEZs is to support regional development Currently, there are 14 SEZs in Poland, each consisting of several subzones Total area of all SEZ – 20 000 hectares SEZ will operate until 2020 Permits to conduct activities in SEZ are issued by the authorities of each SEZ Minimum investment: EUR 100, 000 Possibility of including the land selected by an investor into SEZ Benefits from obtaining a permit to conduct activities in SEZ : eligibility for income tax exemption – a form of regional aid plot of land prepared for an investment project, available at a competitive price free assistance in dealing with formalities relating to the investment project

Government grants Program of support of investments of considerable importance for Polish economy Production Modern services automotive ICT electronics SSC aviation BPO biotechnology R&D activity „big investment” in other sectors Purpose of support development of innovativeness and competitiveness of Polish economy Result of support 50 programmes of total amount 13, 5 bn PLN (since 2004 r. ) 33, 7 thous. of new jobs Source: PAIi. IZ, Ministry of Economy

Students and graduates Ø 20 m people aged 35 and less Ø 455 higher education institutions Ø almost 2 m students • 18 universities Ø more than 430 thous. graduates every year • 22 technical universities Ø more than 90% of students know foreign • 95 academies of economics Ø growing number of science students languages Main academic centers Students in Poland TRI-CITY OLSZTYN SZCZECIN City BIALYSTOK BYDGOSZCZ/TORUN 276 000 65 300 Wroclaw 146 000 30 000 Katowice 112 000 23 500 Krakow 185 000 35 500 101 – 150 Poznan 137 500 33 000 51 – 100 Tricity 95 000 20 500 Lodz 120 500 27 500 ZIELONA GORA LODZ LUBLIN WROCLAW KRAKOW KATOWICE No. of students (thousands) 201 > KIELCE OPOLE 151 – 200 RZESZOW 50 < Source: Central Statistical Office Graduates Warszawa WARSZAWA POZNAN Students

Why Poland? Summary Strategic location – gateway to EU Economic and political stability Availability of skilled human resources Innovative economy Effective incentives system including EU-Funds

Thank you for your attention! Trade & Investment Promotion Section Embassy of Poland in Brussels Av. de l’Horizon 18 1150 Brussels Phone +32 2 771 67 54 Fax +32 2 771 18 39 E-mail: brussels@trade. gov. pl www. brussels. trade. gov. pl