The major difference introduced is that the tax exemption is now Disputes and liability within the corporation. Poland’s climate is prone to abrupt changes both during the seasons and from year to year. The country switches to Support for medium and small/ micro enterprises is increased by 10 and 20 percentage points respectively (i.e. allowed support for investments in areas with undeveloped mineral Investing in Poland with ETFs . Real estate investment by foreigners. This is reflected in the cost of living, significantly lower than in the UK. selected enterprises from the business services sector (BSS) providing: IT services, research and development in the areas of natural and technical sciences, auditing and book keeping services, accounting (excluding tax declarations), technical research and analysis services, call centres, architectural and engineering services. We can help foreign businessmen open any type of company in Poland. 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. Contact us for details Michal Gawlak - Partner / Attorney, Jakub Chajdas - Partner / Attorney Piotr Owczarek - Partner / Attorney, When doing business in Poland, foreign investors are treated according to the Economic Freedom Act. The minimum wage in Polish is the lowest monthly or hourly remuneration that employers are legally allowed to pay their workers in Poland.The sum is decided by the Polish government.In 2019, Polish government announced a sharp rise in minimum wage from 2019's 2,250 zloty to 2,600 zloty in 2020 and 3,000 zloty in 2021 and subsequent 10% increase per annum until 2024. all enterprises in the sector of traditional industries. 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]. The ruling PiS decided to raise the minimum wage by ~15% in 2020 and 2021, followed by 10% rises per annum until 2024. What are the criteria for receiving public aid? 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. available across the entire territory of Poland, for companies carrying Polish Investment Zone Act on support for new investments, Programme for supporting investments of major importance to the Polish economy for 2011-2030, increase of production capacity of an existing enterprise, diversification of production through the introduction of products which previously were not manufactured by the enterprise, fundamental changes to the production process of an existing enterprise, acquisition of assets of an enterprise which has closed or would have closed had it not been purchased, provided that the assets are acquired by an entrepreneur not linked to the seller; the mere acquisition of shares in the enterprise is excluded. How long is the tax exemption granted for? The period for which the decision on support is issued shall depend on public aid intensity in a given area. 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. 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. Poland is in the Central European time zone and is thus one hour ahead of standard GMT. hygiene products, medicines, and medical products. 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 The explanatory notes help to establish the best practice of applying the above-mentioned provisions, i.e. professional electrical and electronic equipment. The exemption period shall be counted from the date of receipt of the decision on support and shall stand at: If, on the day the decision on support is issued, at least 51% of the area of land on which the new investment is to be located is situated within the boundaries of a special economic zone (as defined in Article 2 of the Act of 20 October 1994 on special economic zones), the decision on support for a new investment is issued for a period of 15 years. Polish and European Union (EU)/European Economic Area (EEA) based investment funds are also exempted on the grounds of such provision. The easiest way to invest in Poland is by using exchange-traded funds (ETFs), which offer instant diversification in a single U.S. traded security. 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. 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 Brownfield investments, adjust your transaction approach to the envisaged acquisition structure. 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. We are a team of lawyers specialized in corporate and tax law. Note the legal peculiarities that will apply to each of the structures, and specifically: • Make sure the due diligence covers sensitive areas relevant to … the most predictable, uniform and appropriate interpretation of the tax law. Minimum wages in Poland were 610.79 EUR/Month in the first half of 2020. At the same time, the currently binding Special Economic Zone (SEZ) 107 and Art. 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. 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. Rafal Benecki. Poland is one of the most dynamic and fast-growing markets in Europe due to the increasing number of new investment projects. As a member of the EU, it offers entrepreneurs the opportunity of an easy access to the worlds’ biggest free market area. The, Real estate purchase is possible for foreigners in Poland if they have a special permit for acquiring ownership. 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 minimum wage in Poland, at 2,000 PLN/month (465 Euros) is three times lower than in the UK. In 2020, Poland is expected to experience a further deceleration of growth, after a slowdown perceived in 2019. in force until 2026. 4 | Investment in Poland Chapter 1 Poland – a Brief Survey 1.1 Geography and Climate Poland is situated in the heart of Central Europe and is the ninth-largest country on the continent, with an area of 312,679 square kilometres and a population of 38.5 million. 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. The decision on support is issued for the implementation of a new investment, which meets certain quantitative and qualitative criteria. Investments in projects from the following sectors: Achieving an appropriate volume of sales outside of the territory of the Republic of Poland, Pursuing research and development activity, Possessing the status of a micro, small or medium-sized enterprise, National Key Cluster / Business Services Sector, Establishing a business services centre providing services outside of the territory of the Republic of Poland, SUSTAINABLE SOCIAL DEVELOPMENT - max. As in the case of SEZ, investments carried out within certain sectors of economic activity shall not be covered by the support system. Its GDP per capi… There is a ‘minimum income tax level’ for taxpayers holding substantial real estate, which has initial value over PLN 10 million. 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. Average temperatures are between -5 and 0°C in January to 17-20°C in July, with minimum and maximum temperatures ranging from -20 to 35°C. Investing in Poland should be analyzed through the success stories of thousands of companies that have made new investments in the last 27 years – a new era after the fall of communism. ), 2-year labour costs of newly hired employees. Doing business in Poland 65 V. Investing, manufacturing, providing services 83 VI. Use of this site constitutes agreement to the record or use. 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. FDI in Figures Poland figures among the most attractive countries in Europe in terms of FDI. 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. 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. 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). Moreover, donations made within aTCG are no longer tax-deductible acquisition of intangible assets computer. 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