Investor's Guide Poland

Investor’s Guide  Poland How to do Business

www.paiz.gov.pl | www.jpweber.com 2013

2013 1 LEGAL NOTICE EDITION 2013/2014

This guide presents an overview of the Polish legal Book design and typesetting by Orfin Studio s.c. system and business environment. We intended it to provide a general outline of the topics concern- ISBN: 978-83-63371-80-7 ing legal issues and believe that all the information is correct on the day of writing and printing. Please © Copyright by PAIiIZ and JP Weber Dudarski Sp. k. bear in mind that Polish law is changeable, especially taxation regulations at least once in a fiscal year. Polish Information and Foreign Investment Agency (PAIiIZ) (Polska Agencja Informacji i Inwestycji Zagranicznych SA) We would like to emphasise firmly to the readers that the information in this guide is not professional ul. Bagatela 12 advice and should not be treated as a substitute for 00-585 Warsaw legal, tax or business advice. The investor should tel.: +48 22 334 98 75 seek professional advice before making any legal, fax: +48 22 334 99 99 tax or investment decision. JP Weber will be pleased [email protected] to discuss specific problems. [email protected] www.paiz.gov.pl JP Weber, Polish Information and Foreign Invest- ment Agency and the co-authors in person reserve JP Weber Dudarski Sp. k. that they cannot be held responsible or liable for ul. Rynek 39/40 any damages (or losses) that may arise with regards 50-102 Wrocław to action taken or not taken in accordance with the tel.: +48 71 36 99 630 information presented in this guide. fax: +48 71 36 99 639 [email protected] www.jpweber.com

1 About PAIiIZ About JP Weber

The Polish Information and Foreign Investment JP Weber is a prestigious address for international Agency (PAIiIZ) has been serving investors for over 20 investors and entrepreneurs wishing to invest di- years. Its mission is to increase Foreign Direct Invest- rectly within the teritorry of Poland. Throughout the ment (FDI) by encouraging international companies investment process, we offer professional support to invest in Poland. PAIiIZ guides investors through for international companies and senior decision all the necessary administrative and legal proce- makers ensuring that their corporate responsibility dures along the way to setting up their business. is maintained throughout their activities in Poland.

Agency: Boasting more than ten years of investment experience, our proven track record has enabled us to ■ helps investors to enter the Polish market, evolve into a trusted business partner for numer- ■ provides quick access to the complex ous demanding customers. Cultural awareness is a information related to economic and legal cornerstone of our business strategy, enabling our environment, team to fully integrate with our customers, ensur- ■ helps to find a convenient investment ing that customer experience remains a positive location and to obtain investment incentives, benchmark for JP Weber. Our teams are comprised ■ advises in each phase of the investment process, of interdisciplinary and multilingual experts, special- ■ helps to find the appropriate partners izing in fields such as law, tax, financial accounting and suppliers at the new locations, and project management. ■ supports firms already active in Poland. JP Weber´s core competencies comprise: Agency’s mission is also to create a positive image of Poland across the world, to promote Polish ■ Advisory goods and services abroad by organizing confer- ■ Mergers & Acquisitions ences, seminars, exhibitions, workshops and study ■ Corporate Finance tours for foreign journalists. ■ Legal Services ■ Tax Advisory In order to provide the investors with the best pos- ■ Financial Accounting sible service a network of Regional Investor Assis- tance Centres has been established across Poland. Their goal is to improve the quality of a region’s investor services as well as to provide an access to the latest information - such as, the investment offers and regional micro-economic data.

These Centres hire professionals that have been trained by PAIiIZ and are financed by local authority funds.

Renoma Building Wrocław

2 3 Investor’s Guide – Poland

How to do Business

4 5 Index Index

I. Introduction 13 II.3.1. Banking and financial institutions 41 I.1. Why Poland 14 II.3.1.1. The National Bank of Poland 41 I.2. Basic facts 18 II.3.1.2. Commercial banks 42 1.2.1. Geographic location and climate 18 II.3.2. Stock exchange and capital market regulations 42 1.2.2. Population and language 18 II.3.2.1. Warsaw Stock Exchange 44 II.3.2.2. Financial supervision 45 II. Legal and Business Enviroment 20 II.3.2.3. Acquisition of material blocks of shares 45 – the most underlining facts about Poland II.3.2.4. Venture Capital Funds 46 II.3.3. Insurance Regulations 46 II.1. Political & Legal Stability 23 II.3.4. Investment financing 47 II.3.5. List of banks 48 II.1.1. Political system 23 II.1.1.1. The Parliament 23 II.4. Resources & business sectors 51 II.1.1.2. The President 24 II.1.1.3. The Supreme Chamber of Control 24 II.4.1. Natural resources 51 II.1.2. Public administration 24 II.4.1.1. Coal 51 II.1.3. Legal System 26 II.4.1.2. Oil & Gas 52 II.1.4. Poland in international organizations 28 II.4.2. Agriculture and forestry 53 II.4.3. Energy sector 55 II.1.4.1. Poland in the European Union 28 II.1.4.2. Poland´s Single Market 28 II.4.4. Industry clusters 57 II.1.4.3. Poland and the Monetary Union 28 II.4.4.1. Automotive industry in Poland 59 II.1.4.4. International organisations 29 II.4.4.2. Aviation 61 II.4.4.3. Electronics in Poland 62 II.2. Macroeconomic indicators 33 II.4.5. Business Services Clusters in Poland 64 II.2.1. Gross Domestic Product 33 II.4.6. Tourism 66 II.2.2. Consumer Price Index 34 II.2.3. Foreign trade 35 II.5. Infrastructure 69 II.2.4. Local cost effectiveness 37 II.5.1. Transport 69 II.3. Financial markets and institutions 41 II.5.1.1. Road system 69

6 7 Index Index

II.5.1.2. Air transportation 70 III.1.2.8. Representative office 93 II.5.1.3. Railway network in Poland 71 III.1.2.9. European Company 93 II.5.1.4. Telecommunication systems 72 III.1.2.10. European Economic Interest Grouping 94 II.5.1.5. Density and connection lease market 73 III.1.3. Establishing and registering an entity 94 II.5.1.6. Data transmission system and density 74

II.6. Labour market 77 III.2. Taxes 97 III.2.1. General Overview 97 II.6.1. Education 77 III.2.2. Taxation of company 98 II.6.1.1. The education system 77 II.6.1.2. International schools 80 III.2.2.1. Income tax 98 II.6.1.3. Scientific and R&D 81 III.2.2.2. Value Added Tax 101 III.2.2.3. Tax on civil law transaction 103 II.6.2. Human Resources 81 III.2.2.4. Custom and excise tax 103 III.2.2.5. Duty-free zones 103 II.6.2.1. Employment and labour force 81 III.2.2.6. Customs bonded warehouse 104 II.6.2.2. Unemployment 83 III.2.2.7. Local taxes 104 II.6.2.3. Salaries 84 III.2.2.8. Stamp duty 105 III.2.3. Taxation of individuals 105 III. Setting up business 86 - get to know about the first steps to be taken III.2.3.1. Personal Income Tax 105 III.2.3.2. Inheritance and donation tax 107 III.1. Incorporation 89 III.1.1. Conducting business activities 89 III.3. Investment incentives 109 III.3.1. EU structural funds 2014 - 2020 109 III.1.1.1. Limited Liability Company 90 III.1.1.2. Joint-stock company 91 III.3.2. Incentives in Special Economic Zones 112 III.3.3. System of financial support for investment III.1.2. Other corporate entities 92 projects important for national economy 113 III.1.2.1. Civil partnership 92 III.3.4. Real estate tax exemption 114 III.1.2.2. General partnership 92 III.3.5. Labour market instruments 115 III.1.2.3. Limited Partnership 92 III.1.2.4. Limited Liability Partnership 93 III.3.6. OECD guidelines for multinational enterprises 116 III.1.2.5. Partnership limited by shares 93 III.1.2.6. Sole proprietorship 93 III.1.2.7. Branch office 93

8 9 Index Index

III.4. Accounting & Finance 119 IV.4. Important regulations 153 III.4.1. Accounting and financial regulations 119 IV.4.1. Polish trade regulations 153 III.4.2. Financial statements 120 IV.4.1.1. Import/export licensing 153 III.4.3. Audit and publication 120 IV.4.1.2. Customs tariffs 153 IV.4.1.3. Customs procedures 153 III.5. Employment Legislation 123 IV.4.2. Currency and exchange controls 154 IV.4.3. Competition law 154 III.5.1. Employment of workers 123 IV.4.4. Regulations for entering into contracts 156 III.5.2. Polish social security system 124 IV.4.5. CO2 emission allowances 156 IV. Doing Business 128 - from Start-Up to performing a direct investment IV.5. Securing business 159 IV.5.1. Property rights 159 IV.1. Greenfield & Brownfield investments 131 IV.5.1.1. Patent legislation 159 IV.5.1.2. Trademarks 159 IV.1.1. Activities requiring licenses, IV.5.1.3. Copyrights 160 concessions or permits 131 IV.5.2. Product certification 160 IV.1.2. Real estate market 133 IV.5.3. Public procurement law 161 IV.1.2.1. Warehouse & industrial market 134 IV.5.4. Bankruptcy and restructuring 163 IV.1.2.2. Office market 134 IV.5.5. Renewable energy support system 163 IV.1.2.3. Retail and commercial market 135 IV.1.3. Acquiring real estate 136 IV.1.4. Investment process 138 V. Sources of Information 166

IV.1.4.1. Analysis 138 IV.1.4.2. Step-by-step investment process 139 V.1. Polish Information and Foreign Investment Agency 169 IV.2. M&A 145 V.2. Regional Investor Assistance Centres 173 IV.2.1. The Polish M&A market 145 V.3. International schools in Poland 181 IV.2.2. Regulations governing M&A 146 V.4. About JP Weber 186

IV.3. Public Private Partnership (PPP) 149

10 11 I. Introduction

The numerous positive responses to our previous enced in advising foreign companies as well as the editions motivated us to update this guide in ac- professional know-how from PAIiIZ who supported cordance with the changing economic environment this guide. and legal requirements. This edition is designed to be a cornerstone of Business Guides, helping to The editorial team understand that this publication is lead Poland into the next decade from 2010 on- not intended as a solution or answer to all possible wards. We hope that this guide will continue to questions. We have simply drafted the key areas of create bridges and make the Polish market appear the business and legal environment. Consequently, transparent as well as attractive for doing business. we hope our guide will be an opportunity for dis- cussion between readers and the editorial team. We This guide is a result of the JP Weber combined will, of course, be happy to answer any questions experience with PAIiIZ gained through advising for- related to the issues presented in this book. eign investors. Investment projects are very sensitive for decision makers who need to be familiar with Accession to the European Union has widely an environment that will influence their investment. opened the European market for foreign companies Since each project completed by us was different in and has created benefits for investing in Poland. In nature, we have been able to gather remarks from particular, incentives such as the regulations on investors and have summarised them below to give public aid and the lowering of the taxation rate, to- you crucial information about Poland, financing, gether with a motivated and qualified labour force, the business climate, real estate, public aid, the have created opportunities to compete with other investment process, labour law and taxation. We European countries. Poland is becoming a leading hope this summary will serve as a road map to in- country as a direct investment destination due to vestment opportunities in Poland. the fact that it offers guarantees of legal regulations related to conducting business and achieving busi- This guide was prepared by professionals from JP ness goals such as profit and a friendly legal busi- Weber who are experts in their field and experi- ness environment.

12 13 Introduction Introduction

2. POPULATION 3 Students in selected EU countries 7. POLITICAL STABILITY BASED ON EU AND NATO I.1. Why Poland MEMBERSHIP Poland has the biggest consumer market (ca. 40 M thousand. people), which has entered the European Union within As a NATO and European Union member, Poland has a the last 20 years. 2500,0 proven record of political stability and commitment to Poland is a promising country for investors. Inter- 2000,0 free market principles. national reports describe the Polish economy as 3. QUALIFIED AND COMPETITIVE LABOR FORCE safe for business environment and long – term 1500,0 8. LARGE DOMESTIC MARKET planning with a low risk of financial crisis, offering Highly-qualified workers and well-educated specialists 1000,0 investment opportunities in connection with the are easily available. It is connected with the fact that Poland is one of the biggest EU member states. We 500,0 modernization of infrastructure and introduction of Poland has over 460 academic centers. Besides of the are the 6th most populated country in the Union and modern technologies in the enterprise. In times of huge number of graduates produced every year by the 0 we are the biggest market in the region of Central and global economic crisis Poland has strengthened its academic centers, there are also many young people Eastern Europe. position, not only in the region of Central and East- educated by Polish Universities of Technology. In this Spain Poland France ern Europe but also all over the continent. way Poland has experts in IT, modern technologies and Hungary Slovakia Poland’s economic growth in 2012 was 2%, while the other technology fields. Polish engineers and scientists Source: Eurostat 2012 Czech Rep. average score in the euro zone -0.6% and -0.3% for 10 reasons to invest in Poland are highly acknowledged across the world. the EU27. The average growth of the Polish economy in 2012–2014 is estimated at 2.2–2.3% per year. 1. SUCCESSFUL ECONOMY 4. CENTRALLY LOCATED 4 Centrally Location in Europe 9. STEADILY IMPROVING CONDITIONS OF RUNNING Poland is one of the fastest growing economies in Poland’s convenient location, in the very centre of BUSINESS the entire Europe. It was the only nation in the Eu- Europe, makes the country a perfect investment des- ropean Union to resist the 2009 recession. Poland is tination for enterprises targeting both Western and 1000 km World Bank’s report Doing Business 2013 distin- going to see a positive trend in its economy in the Eastern part of the continent. From Warsaw it takes guished Poland as greatest improver in terms of ease coming years. only several hours either by car, train or plain to reach a of doing Business. number of Europe’s major capital cities Poland This ranking compares the degree to which a given GDP Growth 2012 country has narrowed its distance to the so-called frontier (representing the best performance achieved by any economy on each Doing Business indicator) in -0,8% the period 2005–2012: Poland limited the distance by

+2,9% 12.3 percentage points, overtaking the Czech Repub- The growth is not -5,2% lic, Slovakia and Portugal (which reduced the distance +0,9% +3,9% by 9.8 pps, 9.5 pps and 9.0 pps respectively). the only reason +0,3% +5,2% 10. POLAND AS ONE OF THE TOP COUNTRIES IN UNCTAD’S WORLD INVESTMENT PROSPECTS SUR- to invest in +3.4% +3,7% VEY 2010–2012 Poland, 5. LABOUR COSTS +0,2% th -1,2% The UNCTAD’s report ranked Poland 12 top priority but an indicator Labour costs are still much lower in comparison to host economy for FDI in the World, and 3rd in Europe. +1,9% other European countries. This means an improvement by one place compared -0,1% +0,7% to the previous edition of the report for the period that the -1,0% 6. POLAND IS THE BIGGEST BENEFICIARY FROM THE 2009–2011. It is noteworthy that among the EU Mem- +1,8% Economy is +0,2% EU BUDGET ber States, only the following ones were listed in the +0,9% survey: Great Britain (7th place), Germany (10th ), France very stable 0,0% Between 2014 and 2020 Poland will receive from the (14th) and Spain (20th). EU’s budget - EUR 72.9 billion for the cohesion policy and EUR 28.5 billion for agricultural policy. These funds will be invested in such areas as scientific research -2,5% and its commercialization, the key road connections (motorways, expressways), business development, -3,2% -1,6% -6,4% environmentally friendly transport, digitization of the country, the inclusion of social and professional activity. Source: Eurostat 2012

14 15 Introduction Introduction

6 Between 2007 and 2020 Poland will be the EU’s largest recipient of funding. 5 Labour costs per hour in euro, breakdown by economic activity in 2012 80 bn euro 70 60 Mainly Business Construc- 50 Industry Services nonbusiness economy tion 40 (excl. public admin.) 30 EU27 23.6 24.2 21 23.7 22.9 20 EA17 28.2 30.3 24.3 27.6 27.2 10 Belgium 40.5 42.7 32.9 40.4 30.4 0 Bulgaria 3.7 3.3 2.9 4.2 3.4

Italy Czech Spain Latvia Malta France 10.7 10.4 9.8 11.2 9.9 Poland Greece Croatia Estonia Finland Ireland Austria Cyprus Portugal Slovakia Bulgaria SloveniaBelgiumSweden Republic Hungary Germany Lithuania Denmark Luxemburg Denmark 39.2 38.0 35.0 40.5 35.8 Netherlands Czech Republic Germany 31.0 35.4 24.7 28.4 28.4 United Kingdom Russian Federation Estonia 8.6 8.4 9.1 8.8 7.6 source: The Chancellery of the Prime Minister (KPRM) Ireland 27.4 29.6 27.3 26.6 35.3 Greece - - - - - 9 Progress in narrowing distance to frontier (representing the best performance achieved by any Spain 20.8 23.0 20.2 20.1 21.9 economy on each World Bank’s Doing Business research indicators) for Poland and other EU France 34.9 36.6 30.7 34.7 - member states in the period between 2005 and 2012 12.3 Italy 27.2 27.3 25.6 27.3 28.9

Cyprus 16.7 15.4 15.5 17.3 28.3 9.8 9.5 9.0 Latvia 6.2 5.9 5.6 6.5 5.2 8.6 8.2 7.1 7.0 Lithuania 5.8 5.7 5.1 5.9 5.9 5.0 4.9 Luxembourg 34.4 30.7 22.9 37.8 36.1 4.5 4.4 3.5 3.5 3.0 2.6 Hungary 7.9 8.0 5.9 8.0 6.0 2.5 1.9 1.8 1.5 1.4 Malta 12.0 12.2 8.4 12.5 13.1 0.8 0.1 Netherlands 31.3 c c c c -0.5 Austria 30.4 32.9 29.3 29.2 31.2 Italy Poland 7.2 7.4 6.3 7.2 8.4 Latvia Spain France Poland Greece Finland Austria Ireland Estonia Slovenia Portugal Bulgaria Sweden Belgium Portugal - - . - - Romania Denmark Hungary Lithuania Germany Netherlands Romania 4.5 4.4 3.6 5.0 3.9 Czech Republic Slovak Republic United KingdomSource: World Bank’s report Doing Business 2013 Slovenia 14.5 14.6 11.7 15.3 16.7 Slovakia 8.6 8.8 8.2 8.5 7.3 Finlandia 31.1 33.5 31.9 29.5 29.9 10 Table 18 Top priority host economy for FDI Ranking Sweden 41.9 44.0 37.4 41.7 33.5 United United 21.9 23 24.4 21.3 20.8 Germany France Spain Poland Kingdom Kingdom Norway 48.2 54.9 38.9 47.0 49.2 Ranking 2009–2011 6 7 14 - 13 Source: Eurostat 2012 Ranking 2010–2012 7 10 14 20 12

Source: Strategy and Analyses Department, Ministry of Economy based on UNCTAD’s World Investment Prospects Survey 2010-2012

16 17 Introduction Introduction

dot the entire northern half of Poland, and the gla- Million 2002 I.2. Basic facts cial formations that characterise the lake region ex- 2011 25 tend as much as 200 km inland in western Poland. 20 The largest zone, the central lowlands, is a narrow 15 I.2.1. Geographic location band in the west which expands to the north and south as it extends eastward. The terrain is relatively 10 and climate flat, cut by several major rivers, including the Oder 5 (Odra), which constitutes Poland’s natural border with 0 Germany in the west, and the Vistula (Wisla) in the pre-working working post-working Poland, officially the Republic of Poland, is often centre, which at 1,047 km is the country’s longest river. considered to be the ‘heart of Europe’ due to its Source: Central Statistical Office, Concise Statistical -Year central location. Throughout history, it has served To the south are the Małopolska uplands that con- book of Poland, 2012 as one of the most important trade routes on the nect the ranges in south-central Poland - the Sudetes continent, connecting the north, south, east and and Carpathian Mountains. The highest peak in the Ethnically Poland is one of the most homogenous west of Europe together thanks to its geopoliti- Sudetes is Śnieżka (1,602 m). The Carpathians Moun- countries in Europe, with over 98% of the popula- cally advantageous location. Poland has belonged tains in Poland are the highest and most picturesque tion ethnic Poles. The major ethnic minorities are to the European Union since 2004, with its eastern mountains in the country, with Poland’s highest moun- German, Belarussian, Ukrainian and Romanian. border constituting the eastern fringe of the entire tain peak being Rysy (2,499 m) in the Polish Tatras. community. At 1,163 km it is the longest exterior Most educated Poles, especially in the business land border of the European Union (the total length Poland has a moderate climate with relatively cold community, speak at least one foreign language, of Poland’s national borders is 3,511 km). By geo- winters from December to March. January tempera- with English the most popular. In addition to this, graphical area, Poland is the ninth largest country in tures average -1°C (30°F) to -5°C (23°F), but in the German and Russian are also spoken frequently, Europe, and the sixth largest in the European Union mountain valleys they may drop as low as -20°C due to the geographical closeness of these coun- as a whole, with a surface area of 312 679 km2. (-4°F). Summers, which extend from June to August, tries. Its neighbouring countries are Germany to the are usually warm, sunny and less humid than winter. west, the Czech Republic and Slovakia to the south, July and August average temperatures range from Ukraine and Belarus to the east, and Lithuania and 16.5°C (62°F) to 19°C (65°F), though some days the the Russian province of Kaliningrad to the north- temperature can easily reach even 35°C (95°F). The east. Poland belongs to the Central European time average annual rainfall for the whole country is 600 zone, GMT + 1 hour, except for between March and mm a year, although isolated mountain locations October when it switches to daylight saving time. may receive as much as 1300 mm a year. Generally, Poland is an unbroken plain stretching from the Baltic Sea in the north to the Carpathian Mountains in the south. Although the average el- I.2.2.Population and language evation is just 173 m above sea level, with only 3% of Polish territory along the southern border averag- ing at higher than 500 m, the landscape is relatively The population of Poland (as of 2012) is 38.544 mil- diversified with terrain variations generally running lion people making it the eight largest country in in bands from east to west. Poland is traditionally Europe in terms of population, making it the eighth divided into five geographic zones. biggest country in Europe in terms of population and the sixth largest in the European Union in terms The Baltic coastal plains are a low-lying region, which of area. Although the population growth has been form Poland’s mostly smooth coastline and north- quite low in recent years (2011 - 0.3 per 1,000 peo- ern border. It provides many kilometres of sandy ple), Poland’s work force is still among the youngest beaches, complete with coastal lakes, sand dunes in Europe, with 24.797 million people of working and cliffs. age as of 2011. The retirement age is currently 60 for women and 65 for men. Recent regulatory To the north of the central lowlands, the lake region changes bound the retirement age to gradually in- includes the only primeval forests remaining in Eu- crease up to 67 years both for men and for women rope. Glacial action in this region formed many lakes until 2020 and 2040 respectively. and low hills over many centuries. In fact, there’s no other region in Europe outside Finland where so Approximately 61.7% of Poles live in cities and ur- many post-glacial lakes can be found. Small lakes ban areas.

18 19 II. Legal and Business Enviroment – the most underlining facts about Poland

20 21 II.1. Political & Legal Stability

the President of the Republic is brought to the State II.1.1. Tribunal.

Political system The Senate has the right to initiate legislation and reviews, approve or reject acts passed by the Sejm or to propose amendments to those acts. However, the Senate’s veto may be overruled by an absolute Poland is a democratic multi-party republic, reflect- majority vote in the Sejm. It is the Sejm, ultimately, ing a mixture of parliamentary and presidential that decides on the final version of any legislative models. The governmental system is based on the act. The legislative initiative is also granted to the separation and balance between legislative (the President, the Council of Ministers and to any group Parliament or National Assembly), executive (the of at least 100,000 citizens coming up with a draft President and the Council of Ministers) and judicial law. powers (courts and tribunals). On the approval of the Senate, the Sejm also appoints The supreme law of the Republic of Poland is the the Commissioner for Civil Rights Protection (Ombuds- constitution rewritten in 1997, passed on April 2nd man; Rzecznik Praw Obywatelskich) for a five-year and submitted for ratification by national referen- term. The Ombudsman has the duty to guard the civil dum. The constitution assures freedom of econom- rights and freedoms of Polish citizens and residents ic activity, any limitation of which should be based and the implementation of the law and of principles on law. of community life and social justice. The Ombuds- man remains independent, and is responsible only to the Sejm. II.1.1.1. The Parliament

The Parliament is composed of two chambers: the lower house, including the Sejm, which comprises 460 deputies elected for four years through a pro- portional voting system in a general election. The upper house includes the Senate, which comprises 100 senators, who are elected every four years through a majority voting system. When sitting in a joint session, members of the Sejm and the Senate form the National Assembly, presided by the Mar- shal of the Sejm. The National Assembly is formed in case of three different situations: to adopt a new Constitution, to receive the oath from a newly elected President, or when an indictment against

22 23 Political & Legal Stability Political & Legal Stability

II.1.1.2. The President including the National Bank of Poland, Government Caring about the environment in Poland and and local Government administrative units and other Ministry of the Environment ensuring the long-term, balanced development corporate bodies and Non-Governmental Organisa- of the country. The President is elected via a general election for a tions which perform or receive public contracts. five-year term and can spend a maximum oftwo Drafts Poland’s budget, and deals with taxes, terms of office. The President is the head of state, Ministry of Finance financing of the local self-governments and the supreme representative of the country in for- issues related to public debt. eign affairs and also the Commander-in-Chief of II.1.2. Public the armed forces. He appoints candidates for the Represents and protects the interests of the post of Prime Minister and appoints the cabinet ac- Republic of Poland and of Polish nationals and cording to the Prime Minister’s proposals. administration Ministry of Foreign Affairs legal persons abroad, promotes Poland abroad, maintains diplomatic relations with other He has also the right to dissolve the parliament if it countries and international organisations. is unable to form the Government or approve the draft of the State Budget. The government in Poland consists of central and Administrates the healthcare system, local administrations: the Office of the President of Ministry of Health pharmaceutical policya promotes health and Apart from the legislative initiative, the President the Republic of Poland, the Council of Ministers, deals with the prevention of diseases. also has the right to veto acts approved by Parlia- with its respective ministries, and the structures ment (although this veto can itself be overruled by comprising the central administration. Responsible for internal security, law enforcement, Ministry of the Interior the Sejm with a 3/5 majority vote). civil defence and registry functions. The Council of Ministers is the executive body that manages the current state policy, ensuring the In charge of judiciary issues within the scope II.1.1.3. The Supreme execution of the law, approving the draft of the not reserved by separate legislation for the budget, protecting the interests of the State Treas- Ministry of Justice competence of other public bodies, and Chamber of Control ury, and ensuring public order as well as the internal taking into account the principles of judicial and external security of the state. independence.

The Supreme Chamber of Control (Najwyższa Izba Currently, the Council of Ministers consists of Prime Kontroli - NIK) is an institution that cannot be exactly Minister (who is the President of Council of Minis- Regulates all issues regarding the labour market qualified as a legislative, executive or judicial power. ters), two Vice Presidents, and representatives of 17 Ministry of Labour and Social Policy and conditions, including the social security Nevertheless, it is one of the oldest state institutions in Ministries responsible for: system. Poland. The NIK is entitled to audit all state institutions Policy for naational education. The ministry Ministry of National Education prerogatives do not include higher education. Ministry Functions Manages in peacetime all of the activities of Represents the Council of Ministers and directs the Armed Forces, the realisation of the general their work, supervising territorial self-government Ministry of National Defence assumptions, decisions and directives in the area within the guidelines and in ways described in Prime Minister of national defence. the Constitution and other legislation, acting as the superior for all government administration Supervises and manages the State Treasury, workers. Ministry of Treasury responsible for the privatisation of state-owned Concerned with various aspects of Polish enterprises and national investment funds. Ministry of Agriculture and Rural Development agriculture and improving its rural areas. Concerned with various aspects of administra- Concerned with various aspects of Polish Ministry of Administration and Digitization Ministry of Culture and National Heritage tion, Internet and telecommunication in Poland. culture, including the protection of its heritage. Administers governmental activities in science Concerned with creating the best conditions Ministry of Science and Higher Education and higher education and has a budget for for business activity, and initiating and co- Ministry of Economy scientific research provided by State funds. ordinating policies regarding economic activity and development.

24 25 Political & Legal Stability Political & Legal Stability

Oversees sport clubs, deals with promotion and Polish courts system scheme of justice, although the concept and definition of Ministry of Sport and Tourism development of sports and matters related to ‘system of justice’ still applies to them. tourism. Administration justice system scheme Is the core government centre for a variety of Supreme Court economic and infrastructural development S¹d Najwy¿szy roles, including development policy, regional Ministry of Infrastructure and Development policy, managing and distributing European Un- Supreme Administrative cassation ion structural and cohesion funds and eliminat- Court in Warsaw ing spatial economic disparities. Naczelny S¹d Adminitracyjny w Warszawie (NSA) Court of Appeal, cassation Regional Courts

The administrative division of Poland is based on as well as manages and maintains the communal three levels of administration, i.e. 16 voivodeships/ buildings and the public usage facilities. Court of Appeal (C.A.) Voivodship Administrative Court provinces (województwa) headed by provincial S¹d Apelacyjny Wojewódzki S¹d Administracyjny (WSA) voivode (governor/wojewoda), appointed by the The local government’s decision-making and super- Prime Minister, who is the superior of the team gov- visory bodies are the councils, operating at all three ernmental administration, the supervision body over levels of the local administration. Council members appeal the territorial self-government units as well as the are voted for in general, equal, direct and secret senior body as per the regulations for administrative elections. They have the authority to appoint or dis- Regional Courts (R.C.) The Constitution Tribunal is a judicial body estab- proceedings. miss local administrative officers including mayors S¹d Okrêgowy lished to resolve disputes on the constitutionality of of rural communes (wójt), mayors of towns and cit- the activities of state institutions: Its main task is to The leader of the executive is the voivodeship mar- ies (burmistrz or for large municipalities prezydent), supervise the compliance of statutory law with the shal (marszałek), elected by the regional assembly heads of the poviats (starosta) and, as mentioned Constitution. It adjudicates in compliance with the (sejmik) and co-existing with the voivode. The self- before, the marshal. Regional Courts (R.C.) Constitution of legislation and international agree- government executes tasks in the following scope: S¹d Okrêgowy ments (as well as its ratification), on disputes over public education, health promotion and protection, the powers of central constitutional bodies, and in environmental protection, modernising the rural ar- compliance with the Constitution of the aims and eas, public roads, collective transport, land develop- II.1.3. cassation activities of political parties. Its judgements are final. ment, culture, social welfare, tourism, counteracting unemployment and activating the local labour The State Tribunal is the judicial body, which rules Legal System District Courts (D.C.) market. S¹d Rejonowy on the constitutional liability of people holding the highest State offices. It is empowered to rule for the The voivodeships are divided into poviats (boroughs/ removal of individuals from public office; to impose powiaty), which are divided further into communes In accordance with the Polish Constitution, judicial injunctions on individuals against their appointment (gminy). power consists of courts and tribunals, which are to senior offices; to revoke an individual’s right to independent from the other institutions of power. Administrative justice system vote and to stand for election; to withdraw previ- There are two types of poviats: the basic territorial The system of justice is based on the Supreme ously awarded distinctions and in criminal cases to division unit that comprises the entire areas of the Court, the common courts, and the administrative The Supreme Administrative Court is the court of impose penalties stipulated in the criminal code. bordering boroughs, a land poviat; or the whole and military courts. Judges are independent and last resort in administrative cases e.g. those be- town area, a town with the rights of a poviat. cannot be dismissed: they are only subject to the tweens private citizens (or corporations) and admin- As a member of the European Union, Poland is also Polish Constitution and regulations. istrative bodies. This court deals with appeals from subject to certain international organisations with in- A commune is the fundamental community and the lower administrative courts. ternational judicial power. These organisations include: smallest administrative unit. The scope of its activ- Polish courts system ity comprises the public affairs of local significance, It judges the conformity of local government au- ■ The European Union - Court of Justice of unreserved statutorily for other entities. Predomi- The Supreme Court supervises the activities of the thority resolutions to the regulations and normative the European Communities and Court of nantly, a commune is responsible for satisfying the common and military courts. It is the highest judi- acts of local government administration authorities. First Instance, primary, concrete needs of its inhabitants. It deals cial body, whose rulings are not subject to further ■ The United Nations - International Court with planning and managing the land, environmen- review by another court. The Supreme Court deals According to the Polish Constitution, the tribunals of Justice, tal protection, roads, bridges, streets, public trans- with cases under particular regulations, provides (The Polish Constitutional Tribunal - Trybunał Kon- ■ The Council of Europe - European Court port and supplying the inhabitants with electricity uniformity and accuracy of interpretation of the stytucyjny and the State Tribunal - Trybunał Stanu) of Human Rights, and heating. It also keeps the surroundings tidy, law, and issues opinions on bills. operate outside the structure of the Polish system ■ The International Criminal Court.

26 27 Political & Legal Stability Political & Legal Stability

The international system of justice exists to supple- ment for workers. The last restrictions for Polish em- The basic requirements for joining the Euro are the Poland started its cooperation with the OECD in 1990 ment the national courts and makes decisions only ployess were rescinded in May 2011. Since then, no Maastricht criteria of economic convergence, includ- and became a member in 1996. Thanks to its OECD when the national justice system is incapable of re- more national regulations of Member States may ing fiscal (the general government deficit and public membership, the regulation of foreign investment solving the dispute at the national level. ban Poles to work within Member States (with re- debt) and monetary criteria (price stability, the level and changes in the foreign exchange law in Poland gards to domestic rules). of long-term interest rates and exchange rate sta- has been carried out more quickly. Its membership in bility). The fulfillment of the exchange rate criterion the most prestigious club of economically developed The freedom of movement of goods is one of the will be preceded by entering into ERM-2. countries in the world is concrete proof of Poland’s II.1.4. Poland fundamental principles of the single market. It concurrent economic stability. This undoubtedly improves stitutes the prohibition of quantitative restriction on From 24th January 2009, it has been possible to con- the global image of Poland, because we are now seen in international exports and imports between Member States. It is the clude agreements and provide performances in for- as partners with a strongly growing economy and rule that products complying with the standards set in eign currency in Poland pursuant to the amendment stable legal rules. Membership in the OECD facilitates organizations the Member State of origin shall also comply with the of Article 358 of the Civil Code and the deletion of § 9 access to preferential credit lines provided by interna- standards of the Member States of destination. Section 15 of the Foreign Exchange Acts. There are tional financial institutions. In addition, through its currently no obstacles to making payments in Euros. membership in the OECD, Poland was given the op- The freedom of movement of services implies the portunity to co-liberate in the global economy, as well II.1.4.1. Poland in the rights of individuals and companies to offer and as forming a new identity for the OECD. provide services without hindrance in all EU Mem- European Union ber States. EU Treaty regulations on the free move- II.1.4.4. International NATO ment of services essentially cover all types of ser- organisations Poland became a member of the EU on 1 May vices provided against payment. Individual citizens NATO, the North Atlantic Treaty Organization the 2004, together with nine other countries, marking and companies have the right to offer and provide political-military organization was established on the culmination of a negotiation process which first services in other Member States on the same terms After 1989 Poland began an intensive period of eco- 24th of August 1949 basing on the Treaty of Wash- began on 31 March 1998. On 21 December 2007 as those applied to the country’s own citizens and nomic development, supported by its membership ington in April 1949 which was signed by 10 Euro- Poland joined the Schengen area: a territory with no companies. in various international organisations. This helped to pean countries and the United States and Canada. checks at internal borders formed in the 24 mem- accelerate development, promote globally the Pol- NATO’s purpose is to put the collective protection ber States. Any obstacles to the freedom of movement of capi- ish economy and enabled collaboration with other of its members as a basis for keeping peace and tal are prohibited according to EC treaty. EU citizens countries. Currently, Poland is a member of: strengthening international security. Its main objec- The main benefits for Poland from joining the Eu- must be able to transfer unlimited sums of money tive is to ensure – by political and military means - ropean Union are: between Member States, open bank accounts, ■ The Organisation for Economic the freedoms and security of all its Member States. invest funds or borrow money in other Member Cooperation and Development (OECD), It obliges each Member State to share the risks and ■ harmonisation of Polish law with EU regulations, States. EU citizens who move to another Member ■ The North Atlantic Treaty Organization (NATO), responsibilities, as well as the benefits of collective ■ access to over 460 million customers within the EU, State to work or retire must have the right to trans- ■ The World Trade Organization (WTO), security. According to NATO’s principles its Mem- ■ the possibility of applying for EU structural funds, fer money from one EU country to another. ■ The World Bank, bers shall not enter into any other international ■ infrastructure development. ■ The International Monetary Fund (IMF). commitments that might conflict with this Treaty. In Poland there is an important 12-year transition The harmonisation of Polish law, as well as access period for the purchasing of agricultural land and OECD In 1997 the Alliance invited the Czech Republic, to EU structural funds, has helped to increase the forests, that ends on 30th April 2016. Poland and Hungary to negotiate with a view to attractiveness of Poland for foreign investors. The The Organisation for Economic Cooperation and De- adopting them as members of NATO. The Polish European Union is now Poland’s largest trading velopment was set-up by the Convention of 1960, accession to NATO on 12 March 1999 was one of partner. From January to July 2012 the share of Pol- which came into force one year later. The headquarters the most important events in the modern history of ish exports reached 76,4% and imports 58,5%. II.1.4.3. Poland and the of the institution is located in Paris. The main objective our country. This alliance forms the basis of Polish Monetary Union of the OECD is to coordinate socio-economic policies security and defence; it is also a major factor in the of the Member States in order to stimulate economic political-military stability in Europe. II.1.4.2. Poland´s growth, employment, social development and interna- The next stage of integration is the accession to tional trade and capital flows. Therefore, the organisa- WTO Single Market the Monetary Union as well as the adoption of the tion develops common rules to be applied in different Euro as the official currency of Poland. The crisis areas of the economy, which takes the form of rec- The World Trade Organisation was established on As a member of the European Union, Poland partic- within Eurozone has put the great pressure on pol- ommendations, resolutions, declarations and agree- 1 January 1995. Poland was one of the founding ipates in the Single European Market. The freedom ish authorities to delay the adoption of the Euro. ments. The organisation includes the most economi- countries. The main responsibility of the WTO is the of movement of people, goods, capital and services The unoffical plans are to fulfill all requirements in cally developed countries to create ‘the richest club’, liberalisation of the international trade of goods makes this market much more competitive. years 2015-16, but the adoption of the Euro will an exclusive organisation representing less than 1/6 of and services, investment policies of trade support, need change of the constitution, which seems to be the world’s population, and providing about 2/3 of the the settlement of trade disputes, and the respect for The freedom of movement of people is very impor- impossible before next elections, scheduled for late global production of goods, 3/5 of world exports and intellectual property rights. Countries acceding to tant, especially with reference to freedom of move- autumn 2015. 4/5 of the total public development aid. the WTO are required to adapt domestic legislation

28 29 Political & Legal Stability

to the standards of the World Trade Organisation IMF and to grant concessions to foreign entities. The WTO has 153 members at present, the most recent The International Monetary Fund has existed since to join being the Republic of Cape Verde. The WTO 1945, while it has been operating on a permanent has eliminated many barriers between countries and basis since 1947. Currently, it has more than 180 people by reducing tariffs. The rules of the WTO members, including Poland. Its head office is in (contained in agreements and contracts) are the re- Washington, USA. Its main tasks are: sult of negotiations among the WTO members. The core document is the General Agreement on Tariffs ■ the development of international cooperation in and Trade (GATT). GATT comprises 60 agreements, the field of monetary policy, which were signed individually in specific areas by ■ securing the stability of exchange rates, each Member State, ■ monitoring the international debt of Member States, World Bank ■ supporting the development of trade in the world. Poland has been a member of the IMF since 1986, The World Bank has operated since 27 December at which time Poland received 1.8 billion SDR units 1945, and its headquarters are located in Washing- (Special Drawing Rights, which function within the ton DC, USA. Currently, its main task is to support IMF as a unit of account). In 1995, Poland was able the development of the market economy whilst to repay its debts incurred in international institu- combating all the causes of poverty in the world. tions, before becoming a full member of the IMF. Poland acceded to the World Bank (WB) in 1986. The President of the National Bank of Poland represents the country in the meetings of the WB. From 1990 until 1996, Poland received funds from the World Bank (equivalent to USD 3.374 billion) to assist in the transformation of Poland. Of this money, 46% was spent directly on the restructuring of the Polish economy to adapt it to the principles of the free market trade. By the year 2000, the WB supported the development of private sector industries and environmental protection. Today its function is gradually starting to comply with the European In- vestment Bank.

Scientific Information Centre and Academic Library in Katowice

30 31 II.2. Macroeconomic indicators

II.2.1. Gross Domestic Product

The GDP of Poland was USD 489.8 billion USD in capita GDP was respectively 13,352 USD, or USD 2012. This makes Poland the 22nd largest economy 20,137 USD PPP. in the world and the ninth largest in Europe. Per

Gross Domestic Product per capita in selected countries (current USD)

120 2000 110 2011 100 90 80 70 60 50 40 30 20 10 0

Italy Spain Japan Latvia Malta Cyprus FranceGreece Ireland Poland Austria EstoniaFinland Norway Ukraine BelgiumBulgaria Portugal SlovakiaSlovenia Sweden Hungary Denmark Lithuania Germany Romania Luxemburg Netherlands United States Czech Republic United Kingdom Russian Federation Source: World Bank, 2013 Source: World Bank, 2013

32 33 Macroeconomic indicators Macroeconomic indicators

Polish GDP has been growing steadily for almost (107%), Śląskie (106.1%) and Wielkopolskie voivod- Harmonised CPIs in European Union in 2012 two decades, since 1991. The average growth in ship (105.3%). % the years 1992-2008 was almost 4.5%, with the 6 lowest rate (in 2001)1 1.0%. For almost five years The regions with the lowest per capita GDP are the (between 1995-1997 and 2006-2007) Polish GDP voivodships in the ‘eastern wall’: Lubelskie (67.6% 5 grew at least 6% per year. Despite the major re- of the average), Podkarpackie (68.4%), Podlaskie 4 cession that many economies have struggled with (73.4%), Warmińsko-Mazurskie (75.6%) and 3 since 2008, GDP growth was 3.9% in 2010 and Świętokrzyskie (76%). 4.3% in 2011 according to European Commission. 2 GDP growth rate for 2012 equalled 2% which was 1 the fourth highest growth in European Union sur- 0 passed only by Estonia, Lithuania and Latvia. Euro- II.2.2. Consumer

pean Commission forecasts Polish GDP to rise by Italy Malta Spain Latvia France 1.2% in 2013 and 2.2.% in 2014, which places Po- EstoniaPoland Croatia FinlandCyprus Austria IrelandGreece Price Index Hungary Slovakia Portugal SloveniaBelgium Bulgaria Sweden land in the group of the fastest growing countries. Romania Lithuania Denmark Germany LuxembourgNetherlands United States Czech Republic Polish GDP is generated through industry (34.2%), United Kingdom services (62.3%), agriculture (3.5%), though GDP Consumer Price Index inflation was calculated as Source: Eurostat, Harmonised Index of Consumer Prices 2012 per capita varies in the regions. The highest GDP 3.7% in 2012, compared with an average yearly was generated in Mazowieckie voivodship (21.6% inflation of 3.9% in 2011. It is worth noting that of Polish GDP), but the main contributor here is War- the inflation rate has been quite low in recent years purchases of oil and natural gas. Other key import- saw, which alone generated approximately 13% of and relatively stable in comparison with the last II.2.3. Foreign trade ers are (apart from Germany): China (8.9%), Italy Polish GDP. Per capita GDP in Warsaw is three times 10-20 years. The graph below shows the inflation (5.2%), France (3.9%) and the Netherlands (3.9%), higher than the Polish average. High per capita rates between 1997 and 2012. Many Poles still re- while Polish exports primarily flow to: United King- GDP is also noticeable in other big cities, including member the hyperinflation, a characteristic of the dom (6.8%), the Czech Republic (6.3%), France Poznań (twice the national average), Kraków (60% economy change-over period in the years 1990- In 2012, Poland imported USD 198.5 billion worth (5.9%), Russia (5.3%), Italy (4.9%), and the Nether- above the national average), Wrocław and the Tricity 1991, with inflation rates exceeding 1,000% in of goods and exported products and services worth lands (4.5%). The following chart presents the per- of Gdańsk, Sopot and Gdynia (45% above average). some months. USD 184.7 billion1 resulting in a trade balance of centage of foreign trade with the most important The strongest region after Mazowieckie is Śląskie USD -13.8 billion. A negative balance is typical for countries in 2006 and 2012.2 voivodship, generating 13% of Polish GDP, followed In 2012, the Polish consumer price index was above Polish market economy and has been one of its by Wielkopolskie (9.3%), Dolnośląskie (8.1%) and average for the European Union, with a 3.7% major characteristics since 1990s. This is due to the Imports Małopolskie voivodship (7.4%). change in the Harmonised Index of Consumer Pric- fact that Poland imports mostly capital goods for in- es - 1.1% more than the EU average HICP. dustry and manufacturing components rather than % 2006 2012 After Mazowieckie (159.7% the national average), the consumer goods. The attached graph presents the 25 biggest per capita GDP is generated in Dolnośląskie values of import and export, as well as the trade balance in the period from 1996 until 2012 (in USD 20 Annual average inflation (HICP) in Poland billion). 15 16 With the change from a communist, plan-based 10 14 economy to the present free trade market, the di- 5 12 rection of Polish foreign trade has been reversed. 0 Formerly, the most important trade partner was the 10 USSR. Nevertheless, Poland has always had a high Italy 8 China trade rate with its direct neighbours. In 1990, the Russian France Germany 6 first year of economic reforms, Germany became Federation Netherlands 4 Poland’s most important trade partner and remains one today: in 2012, 25.1% of Polish exports and 2 21.3% of imports were exchanged with Germany. Source: Central Statistical Office. Yearbook of foreign trade 0 What is more, in the last few years the import of statistics of Poland 2007 and 2013 editions 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 goods and services from Russia exceeded 10% Source: Eurostat, Harmonised Index of Consumer Prices 2012 of the total Polish import, which is largely due to

1 International Monetary Fund, World Economic Outlook Database, 2010 1,2,3 Central Statistical Office. Yearbook of Foreign Trade Statistics of Poland, 2013.

34 35 Macroeconomic indicators Macroeconomic indicators

Prolonged slowdown of the global economy has makes it reliant on the economic condition of the ability, and in this example - the qualified labour force. had a significant impact on Polish foreign trade. European Union. II.2.4. Local cost Since direct investment decisions are based on a longer Only in 2009, the value of total trade exchange time horizon, it is important to have a closer look at decreased by 25.1%. Although Polish trade quickly Exports effectiveness the size of the country. Bigger countries tend to de- recovered in in 2010 and 2011 achieving double- velop in a more stable fashion in each of the indicators digit growth rates, 2012 has brought a fall in the % 2006 than smaller countries, where shortages and capacity total trade with the decreases in both import and 2012 limits occur suddenly and within a short period of time. export of 6.5% and 2.9% respectively.3 30 Costs of Labour Due to the fact that Poland (with almost 40 million 25 citizens) is by far the largest country to join the EU Poland’s key trade partners in terms of export are 20 During past years one of the main reasons for direct in 2004, it can be considered rather stable when Germany, United Kingdom, Czech Republic, France investment in Poland has been its lower average labour taking the actual economic core data into account. and Italy. With all of them, except for Italy, Poland 15 costs compared to other European Union countries. It maintains a positive trade balance. Poland’s import 10 is indeed still the fact that average labour costs are Cost of transport needs are reflected in a high share of goods bought both low and competitive. On the other hand, what 5 in Russia and China, where oil, gas and inexpensive really counts is the fact there is a high availability of Due to the decision to make significant investments consumer goods are purchased. China has recently 0 labour on the market. The young structure of Poland’s into its infrastructure, Poland will increase the num- become the third largest exporter to Poland, sur- population and the high standard of Universities en- ber of fast roads and improve its transport connec- passing Italy in the 2006 and 2011 period. It seems Italy sure a continuing and growing potential for a highly tions. In the close future, the main cities of Poland United Czech France Russian that Poland has been able to become less depend- Republic skilled and educated labour force. Looking deeper, will be connected by motorways. Furthermore, the Germany Kingdom ent on the trade with Germany, as the share of im- Federation the low labour costs are combined with competi- European motorway number 30 will be finished ports and exports this country accounts for has de- Source: Central Statistical Office. Yearbook of foreign trade tive productivity, which indicates the created value and function as one straight motorway connection creased since 2006. Poland, however, still does not statistics of Poland 2007 and 2013 editions per working hour. This combination of competitive between Berlin and Moscow. export enough goods to non-EU countries, which productivity alongside the total amount of average salaries serves to back up the argument for under- The costs of transport were reduced in the past lining direct investments in Poland. when Poland became part of the Schengen Agree- ment, allowing fast and easy travelling within the The next indicator shows, that the increase in the aver- countries which are part of Schengen. Today a age cost of working hours has developed quite moder- country becomes automatically part of Schengen ately compared to countries like Romania or Bulgaria. by joining the EU. Polish Trade till 2012 Sharp rises in wages are the result of shortages in avail- bn USD Changes in labour costs in EUR per hour between 2008 and 2012 200 150 EUR Import 100 50 Export 42,6 50 Balance 40

0 30 23,3 -50 20 13,7 15,3 9,5 11,7 8,6 8,9 9,1 10 6,9 7,5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 3,3 -4,6 -1,4 0,8 Source: Central Statistical Office. Yearbook of foreign trade statistics of Poland 2007, 2012, and 2013 editions; Annual 0 Economic Indicators 2010 8,7 0,4 2,1 4,6 7,0 8,3 9,1 9,3 10,9 13,1 13,8 15,5 27,7 -10 -2,6 -11,2 -20

Italy EU27 EA17 Latvia Spain Malta France Greece Poland Ireland Estonia Cyprus Finland Austria Portugal Slovenia Belgium Slovakia SwedenNorwayBulgaria Hungary Lithuania Romania Germany Denmark

Netherlands Luxembourg

Czech Republic United Kingdom

3 Central Statistical Office. Yearbook of Foreign Trade Statistics of Poland, 2013. Source: Eurostat, Labour Cost Levels 2012

36 37 Macroeconomic indicators

Hourly labour costs in European Union in 2012

Legend

EUR/hour:

0−10

10−20

20−30

30−40

<40

Source: Eurostat, 2012

Copernicus Science Centre, Warsaw

38 39 II.3. Financial markets and institutions

The PFSA is supervised by the President of the II.3.1. Council of Ministers. Banking and financial institutions II.3.1.1. The National Bank of Poland

The banking system in Poland is built on three pillars: The National Bank of Poland is the Republic of Po- land’s central bank. Its tasks are stipulated in the I. Central bank (the National Bank of Poland – NBP) Constitution of the Republic of Poland, the Act on II. Commercial banks the National Bank of Poland and the Banking Act. III. Cooperative banks. The fundamental objective of the NBP’s activity is to maintain price stability. The most important areas of From 1 January 2008, banking supervision has been activity for the NBP are: carried out by the Polish Financial Supervision Author- ity - PFSA (Komisja Nadzoru Finansowego - KNF), as ■ monetary policy, stipulated in the 21 July 2006 act on the supervision of ■ the issue of currency, the financial market. ■ the development of the payment system, ■ the management of official reserves, The merger of the financial and banking supervision ■ education and information, was a pragmatic decision based on the evolution ■ services to the State Treasury. of the Polish financial market, the growing significance of multinational financial groups and cross- The management authorities of the NBP are the sector financial products. President of the NBP, the Monetary Policy Council and the NBP Management Board. The Monetary Before 1 January 2008, banking supervision, con- Policy Council lays down the foundations for mon- ducted by the Commission for Banking Supervi- etary policy, sets interest rates and defines the level sion (Komisja Nadzoru Bankowego - KNB), had a of obligatory reserves for commercial banks. The limited objective which was to ensure the safety Management Board directs NBP activities. Its funda- of deposits held by banks. The aims of the PFSA mental tasks include the implementation of resolu- are much broader and include undertaking meas- tions for the Monetary Policy Council, the adoption ures designed to ensure the regular operation of and implementation of the NBP plan of activities, the financial market (its stability, safety and trans- the execution of the financial plan approved by the parency). Consumer issues such as dealing with Council and the performance of tasks related to the complaints, financial education and codes of best exchange rate policy and the payment system. practice were not considered particularly important before 1 January 2008.

40 41 Financial markets and institutions Financial markets and institutions 4 0 43 26 2013-02 35 572 7.486 7.482 6.146 6.111 6.264 6.264 4 0 43 26 2013-01 35 572 7.348 7.344 6.254 6.219 1.831 1.831 4 0 45 25 2012-12 35 572 7.370 7.366 6.289 6.254 1.772 1.772 4 0 46 25 35 19 2012-11 19 573 7.350 7.346 6.276 6.241 4 0 46 24 35 22 2012-10 22 573 7.347 7.343 6.275 6.240 4 0 46 24 35 33 2012-09 33 573 7.347 7.343 6.262 6.227 5 0 46 23 35 33 2012-08 33 573 7.253 7.248 6.305 II.3.1.2. Commercial banks II.3.2. Stock exchange 6.270 5 0 46 23 35 34 2012-07 34 As of Q3 2013, 41 commercial banks and 26 and capital market 573 7.260 7.255 6.663 6.628 branches of credit institutions conducted operations in Poland. regulations 5 0 46 23 35 26 2012-06 26 573 7.272 7.267 6.641 Mergers and acquisitions are among the most impor- 6.606 tant methods of growth used by commercial banks. 5 0 47 21 35 27 These transactions became popular in Poland as early The Warsaw Stock Exchange (Giełda Papierów 2012-05 27 573 6.997 6.992 6.864 as the mid-1990s and have led to significant changes Wartościowych w Warszawie S.A., WSE) is a joint- 6.829 in the operation of the entire banking system over stock company founded by the State Treasury. The 5 the following decade. As a result, the number of WSE began its activity in April 1991, at the time 0 47 21 35 26 2012-04 26 573 7.035 7.030 6.820 entities decreased, in particular those which were of writing (May 2013) investors could buy and sell 6.785 economically weak, with the existing banks becom- on WSE stocks of almost 440 companies. In August ing modernised and the growth potential of the fi- 2007 WSE launched the New Connect – a market 5 0 47 21 35 26 2012-03 26 573 7.037 7.032 6.804 nancial market rising significantly. Consolidation has for young companies with a large growth potential, 6.769 also resulted in the diffusion of banking activity and on which 433 companies are currently listed. The risk management standards elaborated by highly de- WSE, as well as the other entities operating in the 5 0 47 21 35 33 2012-02 33 veloped countries over the years. Polish capital markets (i.e. investment firms and en- 573 The number of banks and branches of credit institutions conducting operations The number of banks and branches credit 7.017 6.803 6.768 7.022 tities operating investment funds), is authorised by Foreign investors have a decisive impact on consoli- the PFSA (Komisja Nadzoru Finansowego). Transac- 5 0 47 21 35 32 2012-01 32 dation in Poland. Another important trend noted is tions on the WSE are executed from 9.00 am to 573 7.023 7.018 6.747 that global banks have dominated these transac- 5.00 pm (this does not apply to block trades). 6.712 tions. Such entities are both the initiators of the transaction and institutions most sought after for a The following instruments are all traded on the merger or acquisition. In the Polish banking sector, WSE: shares, bonds, subscription rights, futures, there is still great potential for the development of options, index participation units, allotment certifi- mergers and acquisitions and the process of banks’ cates, investment certificates, and derivative instru- consolidation is still to be finished. In Poland, further ments. M&A transactions will mainly result from those entered into on international markets by the owners Capital market in Poland is regulated by three main acts: Number of banks and institutions credit Number of commercial banks Number of cooperative banks Number of branches institutions credit Banking offices Number of branch offices In Poland Abroad Number of other cus - tomer service facilities In Poland Abroad Number of agencies In Poland Abroad of Polish entities. Polish Financial Supervision Authority Source:

42 43 Financial markets and institutions Financial markets and institutions

■ on Public Offering, Conditions Governing the determine the price of the instruments, a summary Capitalization (PLN mil.) Introduction of Financial Instruments to Organised disposition of purchase orders and sales must be Trading, and Public Companies, prepared. The matching of these orders is done Domestic Foreign Total ■ on Trading in Financial Instruments, according to strict rules, and the checkout process Main market 491 155.58 200 386.55 691 542.13 ■ on Capital Market Supervision. takes place during trading sessions. To improve the liquidity of traded instruments, the members of the Parallel market 6 265.23 416.64 6 681.87 All of these are dated 29 July 2005. exchange or other financial institutions can act as market animators, placing (on the basis of an ap- TOTAL 497 420.81 200 803.19 698 224.00 propriate agreement with Exchange) orders to buy Source: GPW, 10.01.2014 II.3.2.1. or sell the instrument on its own account. The subjects of the trade on the stock market are securities Warsaw Stock Exchange (stocks, bonds, rights, rights to shares, investment certificates and derivatives), forward contracts, op- II.3.2.2. II.3.2.3. Acquisition of tions and index units. The functioning of the Warsaw Stock Exchange is Financial supervision material blocks of shares based on three legal acts dated 29 July 2005: Warsaw Stock Exchange operates in financial instruments on two markets: The PFSA initiated its activity in September 2006. Rules regarding the acquisition of material blocks ■ the act on Public Offering, Conditions Governing In its present form, the PFSA covers banking su- of shares are applicable only to public companies. the Introduction of Financial Instruments to Organ- ■ The WSE Main Market has run since the Stock Ex- pervision, capital market supervision, insurance There are some specific levels of votes that can be ised Trading, and Public Companies, change’s inception on 16 April 1991. The market supervision, pension scheme supervision and the executed during general shareholders meetings, the ■ the Act on Trading in Financial Instruments, is supervised by the Polish Financial Supervision supervision of electronic money institutions. The exceeding of which causes some special duties to ■ the Act on Capital Market Supervision. Authority and notified to the European Commis- PFSA’s activities are supervised by the President of come into play. sion as a regulated market, the Polish Council of Ministers. The capital market in Poland was created in 1817, ■ NewConnect is organised and maintained by the Anyone who: when the first Mercantile Exchange was set up to Exchange acting in the key market for an alternative The main purpose of this supervision of the fi- operate in the Warsaw Exchange. Activity in its cur- system of trade. It was created for the young and nancial market is to ensure the proper operation, ■ has achieved or exceeded 5%, 10%, 15%, 20%, rent form started on 16 April 1991, by organising, growing companies, particularly working with new stability, security and transparency of the financial 25%, 33%, 50%, 75% or 90% of the total vote, or from the beginning, securities trading in an elec- technology and has functioned since 30 August market, as well as to ensure confidence in that mar- ■ has held at least 5%, 10%, 15%, 20% 25%, tronic form. 2007. The subject of trade in an alternative system ket, and to safeguard the interests of the financial 33%, 50%, 75% or 90% of the total vote and as may be shares, the rights to shares (PDA), rights, de- market participants. a result of a reduction of its equity interest holds As of May 2013 the ownership of the Stock Ex- positary receipts and other equity securities. 5%, 10%, 15%, 20%, 25%, 33%, 50%, 75% change was as follows: The tasks of PFSA include, among other things, or 90% or less of the total vote, respectively, is Currently, the WSE implements the development undertaking measures aimed at ensuring the regu- obliged to notify the Polish Financial Supervision ■ 35% - the State Treasury, strategy, designed to enhance the attractiveness lar operation of the financial market, undertaking Authority and the company of this fact immedi- ■ 65% - other entities including banks and competitiveness of the market and make War- measures aimed at the development of the finan- ately. This must be done no later than within four and brokerage houses. saw the financial centre of Central and Eastern cial market and its competitiveness and undertak- business days from the date on which the share- Europe. The Polish Exchange is now an important ing educational and information measures related holder became, or by exercising due diligence The General Meeting of Shareholders is the high- capital stock market in Europe and a leader in Cen- to financial market operation. could have become, aware of the change in his est decision-making body, its main function being tral and Eastern Europe, using the potential devel- share in the total vote. to select 7 members of the Supervisory Board and opment of the Polish economy and the dynamism The PFSA is composed of a Chairperson, two Vice- the President of the Management Board. The Man- of the Polish capital market. Chairpersons and four members. In the case of a change resulting from the acquisi- agement Board comprises four members, with the tion of shares of a public company in a transaction President of the Management Board being elected for Number of companies Of note is that, in civil-law cases arising from the on a regulated market (e.g. a stock exchange), the a three-year term. relationships entered into in connection with par- above mentioned requirement is due no later than Domestic Foreign Total ticipation in trading on the banking, pension, in- within six trading days from the transaction date. The purpose of the WSE is to organise trading in Main market 333 43 376 surance or capital markets, or relating to entities financial instruments. The Exchange provides a operating on those markets, the PFSA’s Chairperson The notification requirement mentioned above ap- concentration of buy and sell offers in one place Parallel market 72 3 75 has the powers of a prosecutor ensuing from the plies also to a shareholder who: and time in order to determine the course of the provisions of the Code of Civil Procedure. TOTAL 405 46 451 transaction. Trading systems valid on the Warsaw ■ has held over 10% of the total vote and this share Stock Exchange are characterised by the exchange Source: GPW, 10.01.2014 has changed by at least: of individual financial instruments being based on ■ 2% of the total vote, in the case of a public the orders of buyers and sellers, and therefore be- company whose shares have been admitted to ing called order-driven. This means that in order to

44 45 Financial markets and institutions Financial markets and institutions

trading on the official stock- exchange listing Funding in the VC mostly comes from foreign inves- If the bank issues a positive opinion of a planned market, or tors. However, over the last few years Polish entities II.3.4. investment project (e.g. a factory) it requires spe- ■ 5% of the total vote, in the case of a public have also been very active in this area. cial contract clauses to secure the repayment of the company whose shares have been admitted to Investment financing loan. These usually involve the mother company trading on a regulated market other than the into the risk of the project. one specified above, II.3.3. ■ has held over 33% of the total vote and this share General Information Typical contract clauses are: has changed by at least 1%. Insurance Regulations Polish bank law and related regulations are rather ■ turnover clause, In some cases, the acquisition of shares may be restrictive and conservative in comparison with ■ debt restriction, done only by way of a tender offer. In the event most of other European systems and an investor ■ Pari Passu (subordination of loans from connected of the acquisition of a number of shares in a public Legal acts in Poland specify two sections of insur- may expect higher requirements regarding loan col- companies), company, which increases a shareholder’s share in ance. The first section includes life insurance, whilst laterals and debt coverage ratios. At the same time ■ dividend clause, the total vote by more than: the second section includes the remaining personal Polish bank system is competitive and efficient what ■ financial indicators. and property insurance types. An insurance compa- can be seen in the latest edition of Doing Business ■ 10% within a period of less than 60 days, in the ny cannot conduct insurance activity simultaneously 2013 (World Bank) where Poland was ranked 4th The main securities used by the banks for investment case of a shareholder holding less than 33% of the in the scope of both these sections. from all listed countries in terms of getting a bank financing are: total vote at the company, credit by a company. What is more restrictive regu- ■ or 5% within 12 months, in the case of a share- The main legal acts related to insurance activities in lations kept the Polish bank sector healthy and al- ■ mortgage on the real estate, holder holding 33% or more of the total vote at Poland regulate the areas of: most intact by the Financial Crisis. ■ letter of comfort (companies with strong mother); the company. ■ bank or corporate guarantee, ■ insurance activity, Common Issues ■ lien on movable objects (strong asset driven invest- Such acquisition may be done only by way of a ten- ■ insurance mediation, ment), der offer to subscribe for sale or exchange of those ■ compulsory insurance, The main problems in financing start-up investments ■ long-term fuel contracting (logistics companies), shares in no less than 10% or 5% of the total vote, ■ the Insurance Guarantee Fund and Polish Motor in Poland are connected to the lack of credit history ■ contracts for about half of the sales value (logistics respectively. Insurers’ Bureau, and usually the mother company has to provide ac- companies). ■ insurance and pension funds supervision and Insur- ceptable securities. Polish law provides mandatory buy-out insulation. ance Ombudsman. Following documents and information should be A shareholder in a public company, who individu- Main possible issues with financing process in Poland: provided: ally or jointly with its subsidiaries or parent entities Insurance activities can be pursued only by an in- has reached or exceeded 90% of the total vote in surance company established as a public limited ■ complicated decision process in Polish banks owing ■ opinion about the customer´s credibility with infor- the company, shall be entitled, within three months company or a mutual insurance society. The Polish to hidden information, mation about offered securities, from the day on which this threshold has been insurance market is supervised by the Polish Finan- ■ relatively long decision process in the banks (de- ■ iInformation about mother company / group with reached or exceeded, to demand that the other cial Supervision Authority (Komisja Nadzoru Finan- pending on financing volume), which often causes an option to secure the loan within the group, shareholders sell all the shares held in the company. sowego). Brokers must be locally licensed. a problem for short–term SOPs, considering cus- ■ financial data and a professional business plan (de- tomer demand, tails below). The policy language is in Polish, as is the unit of ■ mistakes in financial documentation (stable finan- currency: zloty (PLN). cial forecasting etc.) made by investors, In order to achieve a positive opinion the investing II.3.2.4. Venture Capital Funds ■ proper communication with bank authorities. company must prepare a professional business plan The main compulsory insurance according to Pol- with all expected financial data for the project. The ish law: Costs of local debt financing and additional documentation is required by most Polish banks in Venture Capital (VC) Funds started to operate in requirements Polish language. Poland at the beginning of the 90s. These days be- ■ third party automobile liability (with a minimum tween 40 and 50 VC management companies are limit of EUR 2.5 million for corporal injury in each ■ almost all banks require at least 25% - 30% equity present on the Polish market, a significant proportion accident and EUR 500,000 for material damage in in the investment projects (as well as sets such as of which are foreign entities looking for investment each accident), land, machines or other equipment), opportunities in Central-Eastern Europe. The most ■ farmers third party liability, ■ the pricing is usually divided into a fix up-front common types of entities active in the VC area are: ■ fire and other natural disasters coverage for farm fee between 1% and 2%, depending on the risk building, and effort of the financing project and a variable ■ investment funds, ■ workers’ compensation (social security scheme margin, which the bank adds to the Polish WIBOR/ ■ investment banks, covering health and pensions), LIBOR interest rate, ■ special funds in the structure of the financial cor- ■ lawyers’ notaries and councillor’s third party liability, ■ the total financing costs depend on the reliabil- porations, ■ tax advisors’ third party liability, ity of each customer, securities provided and the ■ consulting companies. ■ other insurance, listed in the applicable law length of the financing period.

46 47 Financial markets and institutions Financial markets and institutions

corporate, DZ BANK Plac Piłsudskiego 3 II.3.5. private bank- DZ Bank AG www.dzbank.pl Polska SA 00-078 Warszawa List of banks ing ul. Św. Mikołaja 72 consumer Société Euro Bank SA www.eurobank.pl 50-126 Wrocław finance Générale FCE Bank Polska ul. Taśmowa 7 Ford Motor www.ford.pl/Uslugi_fi- The following table summarizes the list of banks with 100,000 EUR deposit guarantee operating in Poland. cars The five largest Polish banks in terms of book value of assets are: PKO BP, Pekao SA, BRE Bank, ING, BZ WBK. SA 02-677 Warszawa Company nansowe Fiat Bank al. Wyścigowa 6 cars Fiat www.fgacapital.pl Polska SA 02-681 Warszawa Name Address Profile Capital Group Webpage ul. Solec 38 micro FM Bank SA - www.fmbank.pl Al. Jerozolimskie 94 00-394 Warszawa enterprises Alior Bank SA universal - www.aliorbank.pl 00-807 Warszawa Getin Noble ul. Domaniewska 39 02- universal - www.getinbank.pl ul. Towarowa 25A Bank SA 672 Warszawa Bank BPH SA universal GE Capital www.bph.pl 00-958 Warszawa HSBC Bank ul. Marszałkowska 69 corporate HSBC www.hsbc.pl Bank DnB NORD ul. Postępu 15C Polska SA 00-693 Warszawa corporate DNB www.dnbnord.pl Polska SA 02-676 Warszawa ul. Domaniewska 39 02- Idea Bank SA SME Getin Noble www.ideabank.pl Bank Gospodarki ul. Kasprzaka 10/16 672 Warszawa universal Rabobank www.bgz.pl Żywnościowej SA 01-211 Warszawa ING Bank ul. Sokolska 34 universal ING www.ingbank.pl Bank Gospodarst- Al. Jerozolimskie 7 public Śląski SA 40-086 Katowice - www.bgk.com.pl wa Krajowego 00-955 Warszawa investments ul. Ostrobramska 77 04- Invest Bank SA universal - www.investbank.pl Bank Handlowy w ul. Senatorska 16 175 Warszawa universal Citigroup www.citibank.pl Warszawie SA 00-923 Warszawa Mercedes-Benz ul. Gottlieba Daimlera 1 cars Daimler-Benz www.mercedes-benz.pl Bank ul. Stanisława Żaryna 2A Banco Comer- Bank Polska SA 02-460 Warszawa universal www.bankmillennium.pl Millennium SA 02-593 Warszawa cial Portuges Meritum Bank ul. Chłopska 53 SME - www.meritumbank.pl Bank Ochrony Al. Jana Pawła II 12 ICB SA 80-350 Gdańsk universal - www.bosbank.pl Środowiska SA 00-950 Warszawa Nordea Bank ul. Kielecka 2 universal Nordea www.nordea.pl Bank of Tokyo- Polska SA 81-303 Gdynia ul. Emilii Plater 53 Mitsubishi UFJ corporate Mitsubishi www.pl.bk.mufg.jp Polski Bank 00-113 Warszawa ul. Domaniewska 39A Abris Capital (Polska) SA Przedsiębiorczości corporate www.pbp-bank.pl 02-672 Warszawa Partners ul Polna 11 SA Bank Pocztowy SA universal Poczta Polska www.pocztowy.pl 00-633 Warszawa PKO Bank ul. Puławska 15 universal - www.pkobp.pl Bank Polska Kasa ul. Grzybowska 53/57 Polski SA 00-975 Warszawa universal Unicredit www.pekao.com.pl Opieki SA 00-950 Warszawa www.rabobank.com/ Rabobank ul. Bielańska 12 corporate Rabobank en/locateus/eu/polska. Bank Polskiej ul. Płocka 9/11B Polska SA 00-085 Warszawa universal - www.bankbps.pl html?prettyu=polska Spółdzielczości SA 02-231 Warszawa Raiffeisen Bank ul. Piękna 20 www.raiffeisenpolbank. Bank Zachodni ul. Rynek 9/11 universal Raiffeisen universal Santander www.bzwbk.pl Polska SA 00-549 Warszawa com WBK SA 50-950 Wrocław RBS Bank ul. 1-go Sierpnia 8A BNP Paribas Bank ul. Suwak 3 corporate RBS www.rbsbank.pl universal BNP Paribas www.bnpparibas.pl (Polska) SA 02-134 Warszawa Polska SA 02-676 Warszawa Santander Con- ul. Strzegomska 42c, 53- consumer www.santandercon- ul. Senatorska 18 Santander BRE Bank SA universal Commerzbank www.brebank.pl sumer Bank SA 611 Wrocław finance sumer.pl 00-950 Warszawa ul. Szarych Szeregów 23a Credit Agricole ul. Orląt Lwowskich 1 SGB-Bank SA universal - www.sgb.pl universal Crédit Agricole www.credit-agricole.pl 60-462 Poznań Bank Polska SA 53-605 Wrocław Toyota Bank ul. Postępu 18b War- Deutsche Bank al. Armii Ludowej 26 00- cars Toyota www.toyotabank.pl universal Deutsche Bank www.deutschebank.pl Polska SA szawa 02-676 Warszawa PBC SA 609 Warszawa Volkswagen Bank Rondo ONZ 1 00-124 cars Volkswagen www.vwbank.pl Polska SA Warszawa

48 49 II.4. Resources & business sectors

■ Lubelskie voivodship: the youngest coal mining II.4.1. region with one coal mine at Bogdanka, close to Natural resources Łęczna. There are many perspective deposits here. Roughly 80% of this coal is consumed for energy generation, with more than 50% used for power and power-heat plants, and the rest being used to heat II.4.1.1. Coal plants and private households.

Lignite is extracted in open-cast mines. This method Coal and lignite are the main raw materials for the has much more of an impact on the environment, not energy production in Poland. The major differences only by physically changing the landscape (by digging between the two materials are the means of mining a big hole in the ground), but also in terms of pollu- them and their calorific value. tion. The calorific value is also much lower than that of coal. It is therefore not worth transporting lignite long Coal is extracted in underground mines and its calo- distances and it is not used by private households. Due rific value is bigger. Although the mining method to these factors, power plants are often built very close itself is more expensive, it does not cause any sig- to mines. Such a duet of mine and plant can be found nificant impact on the land above it. Despite some in three places in Poland: limited, so called, ‘mine damages’ on the surface, it is possible to construct buildings, roads and even ■ Turów: in the south-western end of Poland, close entire cities above such mines. to Germany and Czech Republic, exploited by the PGE SA, There are three areas in Poland, where coal is or ■ Bełchatów: in the south from Łódź, extracted by was extracted: the PGE SA, ■ Konin: in the east from Poznań, extracted by ZE ■ Dolnośląskie voivodship: in the surroundings of PAK SA. Wałbrzych and Nowa Ruda. Coal is no longer extracted here, with the region now set up to de- There is also one small stand-alone lignite mine in velop other kinds of industries, maintaining one of Sieniawa, in a village close to Świebodzin in Lubusz. the biggest and best operating Special Economic It used to be an underground mine, but since 2002 it Zones, has also been an open-cast mine, the importance of which is very low. ■ Śląskie voivodship: the traditional Polish region for coal mining (and also the steel industry). Ap- There are many other deposits of lignite in Poland, proximately 5,000 m2 of coal is available. Most of which have not been exploited as of yet. One of the mining companies and activities are located the biggest is in the surroundings of Legnica in around Katowice, Mysłowice, Dąbrowa Górnicza, Dolnośląskie voivodship. There is currently a debate Rybnik, Jastrzębie Zdrój and neighbouring cities, as to whether to start exploiting these beds, a move

50 51 Resources & business sectors Resources & business sectors

Gas and oil exploitation in Poland Lignite deposits in Poland

Number Deposits Resource Yearly Exploitation Gdañsk of beds Exploitable Industrial 137,838 66,426 Natural gas 285 5,619 bn m3 bn m3 bn m3 Szczecin 24,96 16,286 Crude oil 84 0,66 m tons Toruñ m tons m tons Gorzów Wlkp. Source: Polish Geological Institute, 2013 Poznañ SIENIAWA KONIN Warszawa Zielona Gora The exploited deposits of natural gas are spread in the Carpathian Mountains (Jasło, Krosno, Gorlice) II.4.2. Agriculture ADAMÓW £ódź in the southern part of Wielkopolskie voivodship Lublin (Ostrów Wlkp., Jarocin, Kościan, Grodzisk Wlkp. Wroc³aw and forestry BE£CHATÓW Góra), in the Lubuskie voivodship (Krosno Odrz., TURÓW Kielce Wschowa), at the border between the voivodships Lubuskie and Zachodniopomorskie (Myślibórz, Str- zelce Kraj., Międzychód, Barnówko-Mostno-Busze- Agriculture and forestry in Poland have a very long Kraków Rzeszów wo [BMB]), and in the coastal area of Zachodniopo- and deep rooted tradition. Over 60% of Poland’s morskie (Kamień Pomorski)8. There are also some territory has been declared as agricultural land. gas deposits accompanying the oil in the Baltic Sea. The most common crops are grains, especially rye, wheat, barley and oats. Another important crop Due to the industrially and economically insufficient group are potatoes, sugar beets, fodder crops, flax, deposits of natural gas and oil, Poland relies heavily hops, tobacco, and fruits. Poland can be found in Legend on imports to meet its energy needs. Up to 95% diverse statistics as one of the biggest producers of of oil and gas imports come from Russia. There are potatoes, rye and sugar beet in Europe. Because of Lignite deposits (geological reserves documented and future) several pipelines for gas and one for oil, most of the climate and differentiated soil quality amongst Exploited deposits which are transit pipelines to other European coun- the regions, mixed type of farming is the most com- TURÓW Names of exploited deposits nad mines tries. Transit countries from Russia to Poland are mon one. Raised livestock in those cases is mostly Belarus and Ukraine. dairy cows, beef cattle, pigs and poultry.

There are several plans and projects to diversify The share of Polish working-age population em- imports of these two energy resources. The pos- ployed in the agriculture is still relatively high, com- which could eventually make some villages in the mined in Poland was around 663,180 tons, where- sibilities include building new pipelines, e.g. from pared to other Western European countries and area disappear. The attached map shows the lignite as 24,62 million tons were imported6. In the case of Caucasus or Nordic Countries, or building gas stor- amounts as for 2012 ca. 12,5% and generates deposits in Poland – in dark blue the ones that are natural gas, domestic exploitation (with more than age at Baltic ports. Such investments are expensive around 3.4% of the GDP. The average farm area currently exploited, in light blue the ones which five million 3m ) can only cover approximately 40% and they need to involve many different countries. amounts 8 hectares (ha) and is usually spread over have been discovered but not exploited as of yet. of the demand. Exact import data is not available7. Due to several economic constraints and political couple plots in the area. Statistics of the main sta- Most of these are geologically confirmed. (Confidential statistical data) tensions, making predictions about future develop- tistical office constant, successive development to- ments is very difficult. wards modern agriculture. This can be seen mostly The biggest deposits of oil can be found in the area on the numbers concerning amount of farms, av- II.4.1.2. Oil & Gas around Gorzów Wielkopolski, although oil is also Recent reports indicate that Poland may have large erage farm area, average crop etc. Modernization extracted in the Pomorze Zachodnie, as well in the shale gas resources. Poland’s reserves of shale gas of Polish agricultural sector has accelerated greatly Carpathian Mountains. Deposits under the bed of are estimated to be as much as 2 trillion m3 by ge- with the accession to EU which triggered inflow of The deposits of crude oil and natural gas in Poland Baltic Sea are also used and gain even more indus- ologists and energy consultants, potentially making funds assigned within Common Agricultural Policy. are limited. In 2012 the overall quantity of crude oil trial meaning. Poland a net exporter of gas.

6 Polish Geological Institute, Petroleum, 2013 7 Polish Geological Institute, Natural Gas, 2013 8 Polish Geological Institute, Deposits of natural gas, 2013

52 53 Resources & business sectors Resources & business sectors

On 1 May 2004, the general rule whereby a permit In the absence of such a tenant Agricultural Prop- located near the fuel mining spots to reduce trans- is required for purchase by foreigners of real estate erty Agency has the right of first refusal to all ag- II.4.3. Energy sector portation costs. Heat and power stations are about or shares in companies which are legal owners or ricultural properties sold with an area of not less 30% more efficient than professional power plants perpetual usufructuaries of real estate ceased to than five hectares. due to the cogeneration of electricity and heat and apply to nationals and entrepreneurs residing or es- causes 30% less CO2 emission. Those 50 facilities tablished in the territory of the European Economic Nevertheless Polish agricultural land still seems to be a There are two aspects of the energy sector in Po- are located around bigger agglomerations. There are Area (EEA). great investment opportunity not only because of the land that are worthy of consideration. The first one also around 160 industrial power and heat stations. constantly growing land prices but also because of the are the electricity market and prices for the indus- Some industry companies build their own power and However, the Act provides for derogation in this single area payments. By Poland’s EU accession on 01 trial consumer. The second one is the liquid fuel heat stations to secure huge amounts of energy their respect. EEA nationals and entrepreneurs willing to May 2004 the agricultural sector enjoyed land subsi- branch of the industry. characteristic productions process needs. purchase agricultural and forest land are obliged to dies only to 25% of the standard single area payment obtain a permit for 12 years after Poland’s accession from the European funds. The rest of the payment Electricity market Geographically defined areas to the EU (i.e. until 2 May 2016).. came from national budget and there was a subsidy of the strongest operators maximum cap set to 55% for the possible overall The electricity market in Poland is shaped through However, EEA foreigners will not be required to combined help. In the following years this percentage the energy act from 1997. Due to the fact that pro- obtain a permit during this transitory period in fol- grew and since 2013 the full amount of the payment duction, sale and distribution of electricity in con- lowing cases: comes from the EU and reached its EU wide maximum trast to transmission don’t show the characteristics level. The following graph visualizes this development. of a natural monopoly the market underwent an ■ to purchase agricultural land situated in: unbundling process, which is in its advanced phase RWE STOEN Development of the structure of single by now. The monopoly for transmission services be- OPERATOR SP Z O.O. ■ the following eight western and northern area payments longs to the PSE S.A. a sole-shareholder company of provinces: Dolnośląskie, Kujawsko-Pomorskie, the State Treasury. The structural importance of the Lubuskie, Opolskie, Pomorskie, Warmińsko- % transmission system and the fact that the exact way 30% 20% 10% 0% Mazurskie, Wielkopolskie, Zachodniopomorskie 100 30% electricity flows cannot be retraced the form of a - after the end of the seven year period since 30% government dependent regulated monopoly is the 80 30% the execution of a lease contract (date of execu- 30% 30% most optimal one. tion must be certified), if during that period they 60 30% have pursued farming in person on the land con- The producers group consists of all power plants 40 cerned and have legally resided in Poland, and power-heat plants which are mostly coal and 20 lignite fueled. Then there are the distribution sys- Legend ■ the following eight central are eastern provinces: 0 tem operators. The strongest companies from this Lubelskie, Łódzkie, Małopolskie, Mazowieckie, 25% 30% 35% 40% 50% 60% 70% 80% 90% 100% group have been separated from the former na- ENEA OPERATOR SP. Z O.O. Podkarpackie, Podlaskie, Śląskie, Świętokrzyskie tional groups due to the unbundling process and TAURON – DYSTRYBUCJA SA - after the end of the three year period since the are meant to be financially strong subjects capable 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ENERGA – OPERATOR SA execution of a lease contract (date of execution of developing expensive infrastructural projects and PGE DYSTRYBUCJA SA must be certified), if during that period they have National establishing an equilibrium on the market in a com- EU pursued farming in person on the land con- petitive way. Those legally independent subjects En- cerned and have legally resided in Poland. Source: Ministry of Agriculture and Rural Development, 2012 erga – Operator SA, Enea Operator sp. z o.o., PGE Source: CIRE, 2012 Dystrybucja SA and Tauron Dystrybucja SA unite A characteristic feature of polish agricultural land In June 2012 the EU Commission introduced a other energy companies and divide the territory of The group of electricity traders is fully open. Every market is the role of Agricultural Property Agency new proposal for the Common Agricultural Policy the country into 4 regions. RWE Stoen Operator sp. company with a concession can become a player (pol. ANR). According to the provisions of the Act for the period 2014 – 2020. The idea is to allocate z o.o. has been privatized before the unbundling in the market. of 11 April 2003 on the agricultural system in the 38,2% of the whole EU budget to agriculture, measures took place and owns a sub region of the sale of agricultural land by a natural or legal person which expressed in total numbers is 371,72 Bil- capital city of Warsaw. In 2011 there was a total Also the price shaping mechanism is almost freed other than the Agricultural Property Agency, the lion EURO. 281 Billion are intended for single area number of 86 companies that gain a concession for from the regulatory measures. The only exception right of first refusal is granted by law to the tenant, payments. It is assumed that the single area pay- operating a distribution system. to that are the electricity prices for private house- if all of the following conditions are met: ment in Poland will rise for about a dozen or so holds, which are still controlled by the regulator be- EURO till 2020 from today’s 214 EURO per hectare. Conventional power generation cause of the threat of an unreasonable price growth ■ the lease agreement was concluded in written in cases where the consumer has still no ability to form and has a certain date, and was performed at Sources: LABOUR FORCE SURVEY IN POLAND IV QUARTER Polish energy system is based on 19 so called pro- switch freely between electricity providers. least three years, as of that date; 2012, Central Statistical Office; PAIIZ; fessional power plants and over 50 heat and power stations. Professional power plant generates about The only other non-market component that has an ■ acquired property is part of a family farm tenant or 60% of the overall consumed electricity in the influence on the price shaping is the way electricity leased by the agricultural production cooperatives. country from lignite and coal. Those facilities are mix is being created. The electricity mix in Poland

54 55 Resources & business sectors Resources & business sectors

follows to some extent the obligatory path for the The interaction of those factors, the economic 3% and heavy heating oil about 5%. Jet fuel con- energy sales structure, which was stated by the EU growth and most reasonable energy market devel- sumption doesn’t follow the market trends because II.4.4. legislative and implemented by each member coun- opment scenarios allow to make a forecast of the of its more autonomous character and rose 1%. try. Poland is one of the few countries that choose to future electricity prices for industrial consumers, Industry clusters implement a quota system for renewable energies. although every single forecast of the recent years Liquid Fuel consumption in Poland As an effect every year a certain amount of the sold turned out to be wrong. The reason for that was Tsd. m3 electricity has to be generated from renewable energy that every forecast simulated a further trend devel- The Polish industry is based on two main pillars. sources, which means that the amount of energy from opment concerning increasing prices and demand. 30000 One on traditional industries, which have survived those sources has its fixed place in the electricity sales. Since 2012 this trend stopped most probably due 25000 the post communistic times and have been adapted This path is scheduled till 2030 when the percentage to the weaker demand resulting from the global fi- 20000 to new modern forms of activity. The second pil- of renewables in the overall sold electricity should be nance crisis and today the electricity prices charged lar are newly created industrial clusters formed around 20%. Although the development of renew- to the final consumer are amongst the lower ones 15000 through large initial investments in the form of able energy in the common electricity mix is increas- in the EU. The following diagram shows historical 10000 Greenfield investments by foreign global players. ing rapidly over last years, the share of electricity from price development from 2004 till 2012 and a most These foreign global investors have attracted new 5000 conventional sources is still dominant. Graph below recent forecast (for the representative Masovian suppliers and helped to develop existing polish shows the average participation of lignite and coal in Voivodship) from 2012 till 2015. 0 companies to match new production requirements. the national electricity generation in 2012. Here, the creation of Special Economic Zones was

Electricity price development in Poland 2007 2008 2009 2010 2011 2012 one of the major aspects which determined the de- CCS and ATOM (industrial consumers) velopment of new modern industries. Gasoline Diesel LPG Empiricial Every price development scenario in Poland has to EUR/kWh JET Heating oil Heavy fuel oil Especially for small and medium sized companies, Forecast make some assumptions concerning the CCS tech- 0,15 the growing scale of developing industry clusters nology and atomic power. Source: POPiHN, 2012 became as important for the local market as the local cost competitiveness for the global reach of 0,1 The abbreviation CCS comes from Carbon Capture The empirical price development in Poland just as the companies. and Storage, which is a possible solution to dramati- in the rest of the world can’t be forecasted because 0,05 cally reduce the CO2 emission caused by energy sec- it doesn’t follow directly economic facts. The next Since industry clusters form an area of special tor. The reduction is achieved through separating CO2 graph shows the average retail price in EUR for 1 Know-how among the labour market, the ad- from the power plants exhaust gases and storaging 0 liter EU 95 gasoline from 2007 till May 2013, which vantage for direct investing companies has had a them in special sealed and monitored empty mines. representative for the overall market state for liquid strong influence on the time needed to reach the fuels in Poland. targeted volume within the defined quality. The 2009 2010 2011 2012 2013 2014 2015 Atomic power is a very probable step for further mod- graphics show certain kinds of developing industry ernization of the energy sector. There have already been Source: Eurostat and Mazowsze, 2012 Average retail price 2007-2013 clusters in Poland with their directions for the global some plebiscites concerning the future location of the selling market, as well as the industry clusters in the plant. Right now the government is preparing the en- Liquid fuel market EUR/1 Liter EU95 different voivodships. ergy law to regulate those potential technologies. 1,60 1,43 1,38 The production of liquid fuel in Poland is domi- 1,40 1,29 During the communist period Poland put a lot of Structure of the electricity generation in 2012 nated by two companies PKN ORLEN and LOTOS. emphasis on its heavy industries including its min- 1,15 Both companies own refineries and have a great 1,20 1,06 1,09 1,05 ing, metallurgy, machine construction, shipbuild- influence on the market prices. Partially as a conse- 1,00 ing and arms sectors. After the political, social and quence of the financial crisis fuel imports dropped economical turnaround of the late 1980s however, 0 12,28% in 2012 about 30% in comparison to 2011. This this kind of industry was no longer supported by fact and the relatively constant domestic consump- the government who needed to change and reduce tion strengthens the position of the domestic pro- 2007 2008 2009 2010 2011 2012 2013 the nature of its employment. This created the pos- 34,95% duction which has risen about 3%. Source: Reflex Broker Office (www.reflex.com.pl), 2013 sibility of establishing new industries in Poland and opened the way for foreign investment. 52,77% The financial crisis and the overall recession has also Nowadays, the industrial sector employs approxi- an impact on the domestic fuel demand. The graph mately 29% of all employed Poles. below shows the recent decrease of fuel consumption in Poland between 2011 and 2012. Gasoline The most popular industries include: Coal Lignite consumption fell in this period 5%, diesel 9% and Rest heating oil around 13%. Simultaneously because of ■ The automotive industry: Fiat (in Tychy), Opel (as the crisis consumers seek for cheaper alternative fu- former part of GM, in Gliwice), Volkswagen (in Source: PSE Operator, 2012 els such as LPG where the consumption grew about Poznań), and GM DAT (former Korean Daewoo, in

56 57 Resources & business sectors Resources & business sectors

Warsaw) producing cars, and Volvo (Wrocław), So- ■ Other consumer goods: Goodyear, Michelin and Industry clusters in the voivodships laris (Poznań) and MAN (Poznań) producing buses. Bridgestone. There is also a wide range of suppliers producing ■ Petrochemical: PKN Orlen is the biggest Pol- Voivodships Field of industry components for factories and customers. ish company, with LOTOS and PGNiG following closely behind. Dolnośląskie High - Tech, Machine Industry Automotive ■ Other world producers present in Poland include ■ Others: including the aviation and train construc- Kujawsko-Pomorskie Chemical, High - Tech, Machine and Food Industry GM Fiat, Isuzu, Volkswagen and Toyota who pro- tion industries, textiles, ceramic, furniture, com- duce engines and gearboxes. munication and IT technology, all of which are Lubelskie Machine and Food Industry, BPO, Logistic, Tourism ■ Home appliances: all world leading produc- strongly represented in Poland. Lubuskie Timber, Food and Electrical Industry ers have plants in Poland, including Whirlpool (Wrocław), Electrolux (several plants in Silesia and The traditional industries are also present. Mining is Łódzkie BPO, Household goods, Logistic Lower Silesia), Bosch and Siemens (Łódź) and In- mostly concentrated around the Silesian coal basin Małopolskie Chemical Industry, BPO, Tourism, High - Tech desit (Łódź). and copper mining in Dolny Śląsk. There are also ■ Food production: many different, mostly Polish several steelworks in Silesia. Mazowieckie Food and Building Industry, BPO companies, producing different meat, vegetable Opolskie Food, Building and Chemical Industry and fruit products, as well as beverages. This also The construction industry is also quite strong, with includes investment of foreign companies like its boom coming in the years 2005-2007 due to the Podkarpackie Air Craft Industry Nestle, Mondelez, Masterfoods and Unilever. conjuncture on the market for private homes that Podlaskie Food and Machine Industry, Tourism ■ Electronics: with the strongest emphasis on TV was stopped at the end of 2007. The most prestig- sets. Due to the presence of LG, Poland is a strong ious polish construction and design offices, mostly Pomorskie Tourism, High - Tech, Water Economy producer of TV sets. Every third TV set sold in Eu- located around Warsaw and Silesia, are currently Śląskie Tourism, BPO, Automotive rope is produced in Poland. entering consortiums with western companies. ■ Cosmetics: Avon, Beiersdorf, Procter&Gamble Świętokrzyskie Metal and Building Industry, Health and Rehabilitation Sector and others. Warmińsko-Mazurskie Tourism, Timber and Food Industry, alternative Energetic Wielkopolskie Automotive, Logistic, BPO Zachodnio-Pomorskie Logistic, Food and Timber Industry, BPO

Industry clusters in Poland II.4.4.1. Automotive Market overview

Gdañsk industry in Poland The Polish automotive sector (including related Petrochemistry services) in one of the largest in Central and East- Energy ern Europe and holds a position of one of the key Key facts industries in Poland in terms of production value, Szczecin employment, capital expenditures as well as share Vivendi Global world “offshore” The number of new passenger in exports. Glaxo Smithkline Deutsche Bank base for Poland 272.7 thousand or as “Server” cars registered in Poland - 2012 for Western Poznañ Warszawa or Eastern Europe: VW European Citigroup - banks Taking into account the number of manufactured The value of the Polish automo- markets - Insurences 21 billion EUR passenger cars, Poland has been the third largest VW - telecom tive goods exports – 2012 Electrolux manufacturer in the CEE region (after Czech Re- Wroc³aw - Global advisory companies LG Value of sold production in public and Slovakia). Poland is the regional leader in Toyota - Media “offshore” or as - FMCG automotive manufacturing 28 billion EUR manufacturing of light commercial vehicles as well “Server” for Western GM Katowice - 2012 as heavy trucks buses and coaches. European markets Fiat Kraków Delphi Mostly as “Contributor” or “Server” for local Polish sales market or as a Number of passenger cars The vast majority of goods produced by Polish au- spring board in the East 548.1 thousand manufactured - 2012 tomotive industry is exported to European Union member states with Germany as the biggest recipi- Employment in automotive 761.7 thousand ent of 29,8% of Poland’s total exports. companies - 2012 With ca. 270 000 passenger vehicles sold in 2011 Total gross salaries in automo- Poland holds the position of the biggest market 8.3 billion EUR tive industry in Poland - 2012 in the CEE. Gross wages and salaries in the Polish automotive sector are slightly higher than average Source: Eurostat and Central Statistical Office, 2013

58 59 Resources & business sectors Resources & business sectors

for industry (by 2,4%). Productivity recorded as the Key players (2012) Poland for more than 50 years, the influx of foreign value of production sold per person employed re- SCANIA investment, the successful development of cluster and cooperation initiatives and the implementation mains high with 175.000 EUR. Company Turnover Employment of the offset, related mainly to the orders of the Name (million EUR) Figures Polish army. In comparison to other countries in the region Polish aviation sector is undoubtedly the SOLARIS Fiat Auto 3,464.92 4,857 strongest in the area of Central and Eastern Europe. Poland Motor VW vehicles The aviation sector in Poland consists currently of Volkswagen production 2008 2009 2010 2011 2012 VOLVO 2,282.94 6,100 more than 120 companies, employing ca. 23 thou- (in thousand MAN Poland sand people. Production of the aviation industry vehicles) OPEL is targeted mainly for export to countries such as: Fiat Powertrain the United States, Indonesia, Italy, Spain and Ger- Technologies 844.62 1148* Passenger FIAT many. The biggest domestic customer is the Polish 842,0 818,8 785,0 740,0 548,1 Poland cars government and its affiliates institutions, ordering aircraft, helicopters and spare parts to them for the Volkswagen army, police, border guard and emergency rescue Light 1,117.74 1,150 Motor Polska services. commercial 92,9 49,9 74,0 85,2 Source: JPW vehicles 103,9 Faurecia 460.89 2,380 Manufacturing companies associated with the avia- Heavy Number of passenger cars manufactured Poland tion industry are strongly concentrated in the south 13,4 5,4 5,9 6,8 trucks - eastern part of the country, where they form one 1200 *2011 of the strongest cluster initiatives in Poland – The Buses and Source: Coface CEE Top 500 Report, 2012 Aviation Valley. Other companies are more dis- 4,6 4,8 4,6 5,1 3,9 1000 coaches persed in Southern and Central Poland, with larger 800 clusters in Silesia and Wielkopolskie Voiwodship. Source: Eurostat and Central Statistical Office, 2013 600 Offset agreements signed between the Polish gov- 400 II.4.4.2. Aviation Foreign direct investments ernment and foreign suppliers such as: Lockheed in the automotive industry 0 Martin, Airbus Group, Avio have had great impor- Key facts tance for the development of the Polish aviation in-

The total income of foreign direct investment in au- 2007 2008 2009 2010 2011 2012 dustry. Within the framework of agreements more tomotive sector amounted to EUR 14,1 billion in the Slovakia Poland Czech Rep. than 50 contracts have been completed directly in end of 2012. Value sold of aircraft the aviation sector. The most important effect of 1.1 billion EUR Source: Bureau of Transportation Statistics, 2013 manufacturers (2012) which were the significant increase in the number Industry concentration of orders related to manufacturing, services and Market potential / perspectives Number of enterprises (2012) 100 maintenance of various aircraft and transfer of advanced technology. Polish FDI FDI inflow Polish FDI ■ Automotive manufacturing remains one of the income Source: Ministry of Economy 2012 income largest and most dynamic industries in Poland. Number of employees (2012) 23 thousand 2012 automotive 2012 Total automotive ■ Taking into account the present economic situa- R&D expenses / sales ratio 10-12% Market potential / perspectives tion, in order for Poland to maintain its position on (2012) 1,307.6 million 1,056.9 million 14,141 million the global market of automotive industry it is nec- EUR EUR EUR essary to at least maintain the level of production Polish accession to the European Space Agency from some previous years, i.e. 800 - 900 thousand Source: Central Statistical Office 2013 (ESA), which took place in 2012, may have sig- Source: National Bank of Poland, 2013 cars annually. nificant importance for the further development of Market overview the Polish aviation and aerospace. Currently Polish Among 40 manufacturing plants carrying out vehi- companies participate in several ESA scientific mis- cle and engine assembly in the CEE Region 16 are The aviation industry is one of the fastest and most sions, such as Integral, Rosetta, BepiColombo and located in Poland. The industry is concentrated in intensively growing segments of Polish industrial Solar Orbiter and Earth observation in the Envisat southern and western Poland. sector, which recent growth should be largely con- and GMES. tributed to the high technical culture and skills of personnel in factories that have been operating in

60 61 Resources & business sectors Resources & business sectors

Industry concentration II.4.4.3. Electronics in Poland invested in Poland both by acquisition of existing Major plants in Poland plants or greenfield projects. More than 100 companies concentrated in South – Eastern Poland, while some other major players Key facts Currently the household appliances manufacturers located in South and Central Poland. are concentrated in South Western Poland (LG, Whir- Value sold of computer, elec- plool, Electrolux) and central regions (Bosh, Indesit). Major plants in Poland tronics and optical products 7.4 billion EUR (2012) On average more than 80% of home appliances products are exported (mainly to CEE and Western LG Value sold of household appli- Samsung 3.9 billion EUR Europe). The household appliances export volume TPV ances (2012) may be broken down as follows: washing machines DELL

25%, cookers 17%, dishwashers 16%, refrigera- Electrolux LG Average monthly salary in 852 EUR tors 15%, dryers 10%, others 15%. electronics sector (Q3 2013) Indesit Pratt & Whitney Source: PAIIZ, CECED, 2013 Average monthly salary in electric and appliance sector 936 EUR (Q3 2013) Market potential / perspectives Hamilton Sundstrand Pratt & Whitney Share of the electronic indus- ■ Relatively low labor costs, improving infrastructure Avio Polska try in the total sales of Polish 3,3% and central location will keep Poland as the main Source: JPW, 2013 Goodrich industry electronics manufacturing hub in the CEE Region.

Source: Central Statistical Office 2013. Employment Wages Industry concentration Agusta Westland and Salaries Q1-Q3 2013 and Production of Industrial Prod- ucts in 2012. Among 40 manufacturing plants carrying out vehicle and engine assembly in the CEE Region 16 are Source: JPW, 2013 Market overview located in Poland. The industry is concentrated in southern and western Poland. The Aviation Valley In the last decade the electronics industry in Poland has grown significantly mostly thanks to numerous The Aviation Valley Association is one of the most foreign direct investments. The scale of foreign capi- Figures successful cluster initiatives in Poland and currently tal involvement in the Polish electronics industry has represents over 100 companies from aviation indus- been systematically increasing. Virtually every major try. Several other companies are in the process of electronics manufacturer in Poland is a subsidiary of Annual production 2007 2008 2009 2010 2011 2012 applying for membership. Aviation Valley is located a foreign multinational company. (thousand pcs) in southeastern Poland, famous for its aerospace industry and pilot training centers. This region has The electronics sector mainly covers manufacturing TV sets & 6 733 17 563 21 559 26 349 20 674 20 526 a heavy concentration of aerospace industry, sci- of office equipment, computers as well as radio, monitors entific research centers, as well as educational and television and telecommunications equipment and training facilities. Most of companies associated in appliances. Poland benefited strongly from the de- Refrigerators 1 674 2 253 1 886 1 867 2 066 2 221 the Aviation Valley are located in Podkarpackie Re- velopment of new technologies of flat displays, as gion and the town of Rzeszów is the seat of the most of market leaders, such as LG, TPV and Funai Dishwashers 960 2 043 2 340 2 780 2 966 3 110 association. have chosen Poland as their main production hub. As result Poland has become a European leader in Washing 1 447 2 471 3 190 4 025 4372 4 957 The long-term objective of the Aviation Valley Asso- production of LCD and plasma displays and TV sets machines & dryers ciation is to transform southeastern Poland into one with the annual number of units manufactured ex- of Europe’s leading aerospace regions, which would ceeding 20 million pieces. be able to provide a diverse cross section of prod- Cookers 873 1705 977 1 214 1 405 1 507 ucts and services for the most demanding clients. It is estimated that in the recent years Poland became as well Europe’s leading producer of house- Source: Central Statistical Office, 2013 The most prominent members of the cluster are: hold appliances, replacing Italy. Again growth of Sikorsky Aircraft Corporation, Pratt & Whitley, Au- manufacturing activities should be mainly at at- gusta Westland, Ladish, and Avio Polska. tributed to expansion of foreign companies such as Electrolux, Whirlpool, Bosh, Samsung, LG, which

62 63 Resources & business sectors Resources & business sectors

Key players (2011) GDAÑSK decade with more than 400 centers operating as ■ The value of investment underlying the creation GDYNIA of 2013. The majority of them belong to BPO/ITO of new jobs in the business services sector shall SOPOT Company Name Products category (39%), which is followed by shared service be at least two times higher than the granted SZCZECIN centers (33%) and R&D entities (27%). The total support. The level of support per job ranges be- LCD TV, household BYDGOSZCZ employment in service centers located in Poland ex- tween PLN 3,200 and PLN 15,600 and the fol- LG appliances ceeded 85 thousand people with the biggest share lowing factors are assessed by the government POZNAÑ WARSAW of Kraków (23%), Warsaw (17%) and Wrocław committee: Samsung Household appliances (15%). According to the ABSL Report 2013 from £ÓDŹ 2008 employment in the service centers is grow- ■ number of jobs created, Dell Desktop PCs ing up constantly with annual average growth rate ■ quality of jobs created, i.e. the number of jobs WROC£AW above 20%. for employees with higher education, Radio and TV ■ type and degree of sophistication of the ac- Humax KATOWICE appliances The most common types of services provided in for- complished processes, KRAKÓW eign service centers in Poland include: ■ their uniqueness, Electrolux Household appliances ■ investment location, RZESZÓW ■ Finance and Accounting, ■ involvement in the development of the local Telecommunications ■ IT Services, environment such as cooperation with univer- Flextronics components and ■ Research and Development sities, products (including Software Development), ■ investor’s brand. According to the ABSL Report 2013 Poland is the ■ Customer Service, largest office market in the CEE region offering 6.4 ■ HR, ■ Tax exemptions in a Special Economic Zone (for million m2 of modern office space. What is impor- ■ Financial services, further details see the SEZ section): tant, the above office stock is dispersed among ■ Decision Support & Knowledge Process Outsourcing, II.4.5. different locations with 7 cities offering supply of ■ Procurement. In order to be eligible for a tax exemption, a com- more than 200 thousand m2 of office space (as of pany must apply for a permit to operate in the SEZ. Business Services 2013). The available space increases year by year The top 10 foreign employees in the business The SEZ permit is issued by the zone’s managing with more than 500 thousand m2 of modern of- services sector in Poland include: France Telecom, entity on the basis of the investor’s application. fices finished in 2012. The basic rent rates offered Capgemini, IBM, General Electric, Hewlett Packard, Regardless of the current location of the zones, an Clusters in Poland in most of major Polish cities vary between range of Bertelsmann Media, Nokia Siemens Networks, Citi existing SEZ may be extended to include a location 12 – 16,5 EUR/m2, the same rate applies to business Group, Shell and Accenture. chosen by an investor, subject to certain criteria, parks located outside of Warsaw’s city center, while provided that in the case of (according to The or- in the Warsaw’s downtown basic offered rental The following investment incentives may be offered dinance of the Council of Ministers dated on 10 of In the recent decade the region of Central Eastern Eu- rates are significantly higher and amount 22 – 26 to foreign companies, willing to establish a business December 2008, concerning the criteria according rope has become one of the most important hubs for EUR/m2. service center in Poland: to which land may be included in a SEZ, with sub- business processes offshoring worldwide. Compared sequent changes): with other countries in the region Poland holds first One of the most important factors contributing ■ Government cash grant under under the name of place in number of attracted service sector investors to attractiveness of Poland is availability of well- Programme for supporting investment of major ■ R&D services, this criterion is for the investment and number of created workplaces, what can be educated staff. Big number of universities and importance to the Polish economy for years 2011- to result in the creation of a minimum of 50 new attributed to bigger number of potential locations - other tertiary education institutions (total of 460 2020: jobs, or incurring costs in the minimum amount of major cities, significantly larger labor pool with higher schools in 2012) deliver more than 400 thousand of PLN 10 million, or education and language skills, abundance of available graduates (both Bachelor and Master) and the total ■ The number of jobs planned to be set up in con- ■ services within the scope of: information technol- office space and proximity to the Western Europe. number of students exceeded 2 million in the re- nection with the investment project is the basic ogy, accounting and books auditing, to the exclu- cent years. What is important Polish students dem- criterion of qualification for the instrument. In sion of tax returns, call centers – the criterion is Among ca. 20 cities in the CEE Region internation- onstrate relatively high level of foreign language the case of: for the investment to result in the creation of a ally recognized as potential offshoring locations al- skills. The highest level of knowledge of foreign lan- ■ the Shared Services Centres (SSC), Business minimum of 150 jobs, or incurring at least PLN 20 most 50% is located in Poland with 3 leading cities guages among students applies to English, which Process Outsourcing (BPO), and IT centres million of capital expenditures. of Warsaw, Kraków and Wrocław, with more than is followed by German, Russian and French. Ad- the qualifying number is the minimum of 250 15 thousand jobs in service centers created in each ditionally numerous language faculties with more new jobs with investment expenses amount- ■ Grants from the EU funds: city. They are followed by Gdańsk agglomeration, than 30 thousand students provide large pool of ing to PLN 1,5 million, Łódź, Katowice agglomeration and Poznań, each people with less popular language skills, such as ■ Research and Development (R&D) Centres, In former EU funds framework, entities planning with over 5 thousand jobs. (according to the report Nordic languages or Dutch. the investor is required to create a minimum to set up a new or expand an existing SSC, BPO/ ABSL - Business Services Sector in Poland 2013). of 35 new jobs for workers with higher edu- ITO or R&D center could request support under The total number of foreign service centers in Po- cation and to pay a minimum of PLN 1,5 mil- Action 4.5.2 “Support for investment in modern land has been increasing constantly in the last lion of investment costs. services sector” of the Operational Program – In-

64 65 Resources & business sectors

novative Economy. It has to be noted that in 2013 Arrivals of foreigners to Poland in 2012 by country the financial resources assigned for implementation (in thousands) Rondo 1, of the above Action were fully utilized. However, it is possible that a comparable support scheme will be Total Tourist Warsaw included into new Operational Programmes under arrivals Change arrivals Change EU 2014–2020 financial perspective. Total 67.390 11% 14.840 11% It has to be noted that in 2012 the financial resourc- EU27 52.565 9% 9.165 5% es assigned for implementation of the above Action EU15 29.570 4% 7.385 5% were fully utilized. However it is possible that new resources may be allocated from additional finan- of which: cial reserve. Comparable support scheme shall be Germany 26.720 4% 4.800 5% included into new Operational Programes under EU Great 2014–2020 financial perspective as well. Britain 540 8% 500 9%

Sources: PAIIZ; ABSL 2013 Report; Marketbeat 2013 Nether- lands 390 0% 355 1% Austria 360 1% 325 3% Italy 320 2% 295 4% II.4.6. Tourism France 280 0% 240 0% Sweden 205 11% 180 13% Other Poland is one of the most frequently visited coun- countries 755 7% 690 7% tries in Central Europe among new EU members, of EU15 with many natural and cultural assets for the devel- New EU 22.995 16% 1.780 3% opment of domestic and foreign tourism. The coast- of which: al area around the Baltic Sea is worth mentioning in particular. The Masurian Lake District, the Tatra Czech 12.380 14% 205 5% Mountains and other regions of the country with a Republic clean environment and a micro-climate favourable Slovakia 6.630 18% 110 10% to the health. More than 321 wellness centres offer Lithuania 3.010 24% 615 -2% health facilities and treatments in 75 places located in areas that are unique for their natural healing Latvia 385 7% 330 10% environments. The largest of these are Nałęczów, Hungary 235 2% 210 5% Krynica Zdrój, Augustów, Kołobrzeg, Ciechocinek, Other Rabka and Duszniki Zdrój. The most reflective places countries 355 3% 310 3% for their historical backgrounds are Kraków, War- of EU12 szawa, Wrocław, Gdańsk, Toruń, Oświęcim and Non Wieliczka with its salt mine. Each of these places are Schengen 13.330 20% 4.220 28% highly attractive for tourists and are places of both neighbors relaxation and interest. Ukraine 6.740 16% 1.930 22% The Institute of Tourism estimates that during 2012 Belarus 3.920 14% 1.620 33% there were 67.4 million arrivals to Poland of which Russia 2.670 44% 670 34% tourist arrivals constituted about 14.8 million. Main overseas 545 10% 520 9% USA 300 11% 280 12% other overseas* 245 9% 240 7% Rest of the World 950 14% 935 16% Source: Institute of Tourism, 2012

66 67 II.5. Infrastructure

II.5.1. Transport Thanks to the cohesion policy funds, which Poland has tapped into since the accession to the EU, the infrastructural investments accelerated. The EU’s Infrastructure and Envi- II.5.1.1. Road system ronment Programme for years 2007-2013 helped to finance transportation development investments worth 25.78 billion EUR out of total The development of road transportation network in available programme funds of 37.69 billion EUR. Poland in the last years has made a dynamic pro- 75% of the Programme funds were streamed di- gress. As of January 2013, there are 1,370 kilome- rectly from the EU budget. tres of motorways and 1,125 kilometres of expressways in Poland – over three times more than at the The EU budget for 2014-2020, although smaller end of 2003. Together they constitute a network than, does not include cuts on cohesion policy in of high-speed roads that allow vehicles to travel at case of Poland. The framework agreed upon by the speeds exceeding 100 km/h. The planned length European Council assigns 72.9 billion EUR to Po- of the road network is expected to comprise 1,987 land on cohesion policy. The budget has yet to be km of motorways and 5,494 km of expressways. accepted by the European Union Parliament, which As for January 2013, 311.65 km of motorways and makes efforts to increase member-states’ contribu- 1,419.7 km of expressways have been given the en- tions to the budget. vironmental approval for investment.

Status of major roads

Vilnius

Hamburg Legend

Existing network Berlin Under construction Minsk Moscow In preparation

Frankfurt am Main 2011 Munich Prague

Lviv Vienna Kiev Bratislava

Source: GDDKiA, 2013

68 69 Infrastructure Infrastructure

The portion of the EU funds allocated to road in- Skanska AB (Sweden), Grupo ACS (Spain), Kirchner future. The acceleration in infrastructural develop- II.5.1.3 Railway vestments is enormous and accounts for about half Holding, Max Boegl (both Germany) and SB Granit ment that began recently is expected to translate the funds available for Poland. The government (FYROM). into increased passenger and cargo traffic to and network in Poland seems to have prioritized the investments in this from Poland as well as to promote domestic travel. sector and considers it necessary for the future development. II.5.1.2 Air transportation Major Polish airports and passenger Poland has a dense railway network that serves traffic annually. both regular citizens and industry. In most cities, the New investments to take priority in the next seven main railway station is located near the city centre years include: Polish air transportation began in 1919 with a flight and is well connected to the local transportation ■ S3 expressway from Zielona Góra to the border between Poznań and Warsaw. In 1929, LOT Polish system. PKP Polskie Linie Kolejowe (PKP Polish Rail- with the Czech Republic Airlines was established, and up to this day is the Gdañsk way Lines), a part of the state-owned PKP Group,

■ S5 expressway from Poznań to Wrocław Polish flag carrier operating from the largest Polish Szczecin operates the rail infrastructure. There is an extensive ■ S7 expressway from Gdańsk to Kraków airport is Frederic Chopin Airport in Warsaw. Bydgoszcz railway network in western and northern Poland, ■ S8 expressway from Warsaw to Białystok however, eastern parts of the country have less Warszawa Modlin ■ S17 expressway from Warsaw to Lublin Recent years have brought large investments in the developed network. In total there are 23,429 km ■ S19 expressways from Lublin to Rzeszów airport infrastructure that needed modernization Poznañ Warszawa Okêcie of railway tracks in Poland, almost 60% of which to account for rising demand for air travel. EURO £ódź are electrified – a value comparable to Norway or Investments are to be divided into tenders for 20-30 2012 football championship gave an impulse to Wroc³aw France. The extent of railway concentration varies km sections with funding spread in time to allow development of the airports in the major Polish from 3.7 km to 15.6 km of line per 100 square kilo- for a stable demand for construction materials. The cities – Warsaw area gained an airport in Modlin, Katowice metres, with the average around 6.08 km/100 km2. investments seem to attract foreign constructors which is supposed to service low-cost carriers, Cit- Rzeszów PKP Polish Railway Lines maintains over 26,500 who participate in the tenders. The major foreign ies of Wrocław, Łódź, Gdańsk, Rzeszów and Poznań Kraków structures, including almost 7,000 bridges and via- constructors involved are: Astaldi S.p.A., Salini opened new passenger terminals in 2012, while Legend ducts. S.p.A. (both Italy), Vinci S.A. (France), SRB (Ireland), Kraków is expected to follow suit in the nearest Passengers annually: The existing infrastructure is still developing and mod- ernizing. Polish government intends to concentrate City Passengers (2012) Major destinations on modernization of existing tracks and train stations with the support of the EU funding. 2012 was the <5m <10m New York, Chicago, Beijing, Dubai, Istanbul, Berlin, <1m break-through year with many vital train stations be- Warszawa (Okęcie) 9 567 063 Frankfurt, Munich, Moscow, Rome, Milan, Brussels, ing refurbished, including landmark investments in Helsinki, London, Madrid, Stockholm, Oslo Warszawa, Wrocław and Poznań. These infrastructural projects were stimulated by the requirements Rome, Berlin, Munich, Dortmund, Vienna, London, Kraków 3 408 954 Source: The Civil Aviation Authority, 2013 of Euro 2012 football championship. Currently PKP Moscow, Frankfurt, Oslo, Stockholm, Madrid Group intends to focus on the renovation of exist- Berlin, Amsterdam, Frankfurt, Munich, London, ing infrastructure and on establishing a high-speed Gdańsk 2 861 774 Barcelona, Hamburg, Milan, Rome, Paris connection between Warsaw, Wrocław and Poznań – the so called – Y-line. The railway will allow trains London, Manchester, Frankfurt, Dusseldorf, Munich, Katowice 2 518 409 to move at speeds exceeding 250 km/h and is sup- Barcelona, Milan, Rome, Paris, Stockholm posed to be finished by 2030. Moreover, moderniza- Frankfurt, London, Munich, Milan, Paris, Rome, Oslo, tion of the tracks between Polish cities is expected Wrocław 1 942 000 Brussels to allow speeds between 160 and 200 km/h. Munich, Frankfurt, Barcelona, Milan, London, Poznań 1 560 334 The amount of funding that is available through EU Copenhagen, Rome, Oslo, Paris, Dortmund funds will probably translate to accelerated invest- Barcelona, London, Budapest, Milan, Paris, Rome, ments in infrastructural development of the railway Warszawa (Modlin) 857 481 Stockholm, Oslo, Brussels network. This prediction is justified in the face of the environmental issues that EU tackles through Rzeszów 562 934 Frankfurt, Barcelona, London, Glasgow, Oslo promotion of environmentally friendly means of transport. Łódź 463 459 London, Edinburgh, Milan, Oslo, Copenhagen

Bydgoszcz 328 099 Birmingham, Dublin, Dusseldorf, London, Barcelona

Szczecin 347 063 Oslo, Dublin, London, Liverpool

Source: The Civil Aviation Authority, 2013

70 71 Infrastructure Infrastructure

Planned network of high-speed railways in Poland in 2030. The mobile telephone segment is characterised by The fixed line telephone market in Poland is charac- a rapid increase in the number of subscribers and terized by a low level of penetration. In 2012, 31% operators. In 2012 services in the segment of mo- of Poles declared themselves to have a fixedline fix- bile telephony were conducted by 26 telecommu- edline phone in their households. Telekomunikacja nications undertakings, including 7 virtual network Polska S.A. is the most spontaneously recognized operators (MVNO). The Aero 2 company provided brand among fixed-line operators Market share ac- Legend services of internet access only. Shares of the largest cording to amount of subscribers: TP 63% and Ne- operators in the market are stable, P4 strengthens tia 11.2%. According to a UKE survey, a fixed-line >201 km/h its position year by year and in 2012 had the largest phone is an important mean of contact for local calls. 161–200 km/h customer base, while Polkomtel noted the largest 100–160 km/h decline of subsribers. The most significant increase Market value of the fixed-line telephony market in shares (by more than 13.7 percentage points), in and the dynamics of change comparison with the year 2011, was recorded by bn PLN the T Mobile Polska. 14 20%

Today, the internet is a major source of information. 12 15% The number of Internet users in Poland reached 11.6 10 million in 2012. The most popular form of access 8 7.5 7.2 to the internet in households is access services pro- 6.0 10% 6 5.2 vided primarily through 2G/3G modem, xDSL lines, 4.5 cable modems of cable TV operators, wired LAN – 4 5% Source: GDDKiA, 2013 Ethernet networks and wireless WLAN networks. 2 The largest number of users had mobile Internet 0% access, which became the most popular form of ser- 0 vice. Other technologies, including above all CDMA, WiMax, and FWA, were used by approximately 2008 2009 2010 2011 2012 2.3% of recipients. Percent decreese II.5.1.4. second segment of the telecommunications market Markt value are still fixed-line telephones; however its market The Polish telecommunications market is gradually Telecommunication systems share is currently decreasing – from 16% in 2011 to approaching Western European markets. In order Source: Office of Electronic Communications, Report about 13.5% in 2012. The fixed-line telephone market in to win over new customers, telecommunication op- Telecommunication Market, 2012 Poland is still dominated by Telekomunikacja Polska erators are trying to retain their current clients by The Polish telecommunication infrastructure is con- S.A., which provides around 57.4% of fixed lines. offering many incentives. These incentives include According to the UKE report, in 2012 more than tinuously developing. Not only has the number of Alternative operators comprise around 39.5% of free minutes and better service quality either at the 88% people declared that they have used mobile the potential providers increased steadily, but also the number of fixed lines in 2012, the main com- same price or as an extension to their existing ser- telephones and said they use at least one mobile various new forms of telecommunication have en- petitors being Netia S.A. and UPC. vice range. They also offer better packages, includ- phone. Spontaneous awareness of the three largest tered the Polish market contributing to the growth ing telecommunications services and banking or mobile phone operators is at similar levels: T-mobile, in the numbers of customers. According to the Total value of the telecommunication television services. Orange and Plus. Urząd Komunikacji Elektronicznej (Office of Elec- market in Poland tronic Communications) report, the value of the Most households (73%) said they have a home telecommunications sector at the end of the 2012 50 II.5.1.5. Density and computer. 73% of households with a computer also was PLN 41,7 billion. 40 have internet access at home. Of these, 41% of Pol- connection lease market ish internet users said they use internet daily. The 30 majority of those who use the Internet at home use Poles are using the internet and mobile telephones an always-on connection, usually broadband. more and more. In 2012, about 83.5% of Poles said 20 they used the internet. Regarding mobiles commu- 10 Value of the retail connection lease market reached nications, there are now more active mobile phones over 13,5 billion PLN by the end of 2012. The big- in the country than inhabitants (2012 – mobile 0 gest operators on the retail connection lease market phones penetration: 140%). 2009 by comparison in 2012 in terms of achieved revenues were: Tel- had only 59.8% of the population using the inter- ekomunikacja Polska S.A., Netia S.A., Crowley Data net and 85% of the population were mobile phone 2009 2010 2011 2012 Poland Sp. z o.o. and GTS Energis Sp. z o.o. The users. Market growth was dominated at first by the greatest revenue in this market sector in 2012 was increasing revenues of its mobile operators. The Source: Office of Electronic Communications, Report about achieved by Telekomunikacja Polska S.A., which Telecommunication Market, 2012

72 73 Infrastructure

since 2002 has been in first position in terms of 1.6 million more than the year before. The increase revenues and the numbers of leased connections. in the number of users of mobile technology was two times higher than of fixed − line technology Mobile technology penetration in Poland (21.6% compared to 13.3 %), reflecting an increas- 2005-2012 ing substitution of traditional access in fixed location for 2G/3G modems. bn z³ % Poland was one of the countries with low fixed -line 60 140,0% 160 131,6% Internet penetration and a concurrent high rate of 123,2% 140 50 115,2% 117,4% mobile access use, exceeding the EU average by 1.1 108,6% 120 40 96,3% percentage points. XDSL lines comprised in Poland 100 76,4% the most common fixed − line technology (as in 30 80 most countries of the European Union) 20 60 40 Structure of subscribers in terms of access technology

10 29,2 36,7 41,4 43,9 44,8 47,0 50,1 53,9 20 0 % 0 34.8 35

2005 2006 2007 2008 2009 2010 2011 2012 30 24.4 Penetration 25 Users 19 20 Source: Office of Electronic Communications, Report about 15 13.9 Telecommunication Market, 2012 10 5.6 5 2.3 II.5.1.6. Data transmission 0

system and density WiFi xDSL others

The retail market for broadband Internet access is CATV modem LAN-Ethernet an important one for the future development of 2G/3G modem telecommunications and will be the starting point for many new services. Poland’s Internet service is Source: Office of Electronic Communications, Report about developing rapidly, with many different types of Telecommunication Market, 2012 technology used for broadband Internet access. The popular data transmission technology is xDSL, with 2.8 mln clients, 2G/3G modems 3.33 mln, TVK 1.96 mln, WLAN 1.04 mln, LAN Ethernet 0.54 mln. These trends comply with those of other European countries:

Broadband access in Poland by technology

In 2012, the largest customer base was held by PTK Centertel. Subsequent positions were occupied by TP and mobile network operators whose combined shares at the level of 40.5% demonstrate the popu- larity of mobile services and their growing competition in relation to the fixed line Internet access. Platinium Business Park, At the end of 2012, there were more than 11.6 million subscribers of Internet access services, nearly Warsaw

74 II.6. Labour market

II.6.1. Education Compulsory full-time education Full-time compulsory education in Poland lasts 10 years and covers education in the already mentioned ‘0 grade’, the six-years of primary education II.6.1.1. The education system and the three-years of lower secondary education. Admission to primary school is based on age. Pri- mary school education is divided into two stages: The Polish education system is well developed, especially in the cities. Although the number of 1. Stage I – grades 1 to 3, called integrated teach- state-owned schools and Universities is rather sta- ing which is meant to provide a smooth transi- ble, the number of private institutions is growing in tion from pre-primary to school education response to recent market demand. 2. Stage II – grades 4 to 6 The school year is divided into two semesters between September Pre-school education is part of the formal system of and June. Pupils attend primary school five days education in Poland. There is a well-established net- a week, from Monday to Friday. work of state pre-schools that children may attend between the ages of three and six. Formal school Pupils are assessed separately in each subject, the education before the age of six is not compulsory, evaluation of which depends entirely on the teach- although currently about 60% of the nation’s chil- er. If the student feels that the periodical or annual dren attend such schools, mostly in the cities. Pre- mark given by their teacher is too low, they have school education helps those between the ages of the right to take a verifying examination. Certifi- three and five develop their communication and cates of completion for each year of school educa- social skills, so they can cope with any situation. tion are necessary when children change school (to Pre-primary education establishments primarily deal another place of living). with preparing children for education in school. The requirements for admission to lower second- Since 2004 an obligatory one year pre-primary edu- ary school are the successful completion of primary cation (‘0 grade’ – zerówka) has been introduced school and a primary school leaving certificate. In for children at the age of six in pre-primary educa- 2002 an externally standardised test was conduct- tion and nursery schools. According to the educa- ed for the first time upon the completion of primary tion reform, the school age will soon be lowered school. Tests are comparable on the national stage. by one year. Until the school year of 2011/2012, In the third year, pupils take another compulsory children had the right to attend primary school at examination. This exam is external and standard- the age of six, but after the school year 2013/2014 ised and is designed to check the child’s abilities, this became compulsory. Also the pre-primary edu- skills, and knowledge in the field of humanities and cation of children between the ages of three and science. From 2009 it also encompass foreign lan- five became obligatory from 2011. guage proficiency.

76 77 Labour market Labour market

Upper secondary and post-secondary education parents’, legal basis of residence. Also, there are According to Eurostat, Poland holds fourth place The biggest centres of higher education are in many private international schools in major cities after the United Kingdom, Germany and France in Warsaw, Kraków, Wrocław, Poznań, Łódź, Lubin, This part of a child’s education covers the ages 16-18, (see V.3), which provide adequate education in Eng- terms of the number of people enrolled in tertiary Gdańsk and Katowice. In total there are 460 higher or 19-20. Candidates who have successfully graduated lish or other languages for the children of expats. education. In 2012 academic year, 1.68 million peo- education establishments in Poland, 29% of which from lower secondary school may choose between the All schools are required to satisfy the requirements ple studies at higher and tertiary education facilities, are state-owned. There are 19 universities, 25 tech- following types of schools: of the Polish national system, some of whom ad- among which 58.7% were women. The most popu- nical universities, 9 medical academies, 7 agricul- ditionally offer the International Baccalaureate Pro- lar faculties among students were the social scienc- tural academies and 7 economics academies. General secondary school - liceum (three years), offers gramme. Attending bilingual school helps children es, business and law and administration faculties. general upper secondary education and, at the end, a to adapt to their new home and students may also The number of graduates in the 2011/2012 aca- Apart from the philology students and foreign stu- final maturity examination (Matura) that is necessary learn the language and culture of their new home demic years decreased slightly to 485.2 thousand dents, 43,1% of students attend foreign language for admission to higher education. and of other countries. compared with 2010/2011 when 498.5 thousand courses at university. Especially active are students Specialised secondary school – liceum profilowane students completed their studies. of business faculties, many of whom study more (three years), which differs from the general secondary Higher education than one foreign language. The most popular for- school by offering specialised upper secondary education (e.g. economic, electronic and fashion design There are several types of higher education and among others). study programmes in Poland: Polish education system scheme

Technical secondary school – technikum (four years), Professional higher studies – wyższe studia zawo- lower years of offers technical and vocational upper secondary ed- dowe (three-four years), the graduates obtain a age secondary level upper secondary level higher education education ucation. It also offers the final Matura examination. professional degree of licentiate or engineer (in the field of engineering, agriculture or economics). This 29 22 28 21 Basic vocational school – szkoła zasadnicza (two- is the Polish equivalent of a bachelor’s degree. 27 20 three years), after finishing school, graduates have 26 19 access to the trade or occupation of supplementary Master’s studies – studia magisterskie (five-six 25 18 schools. years), the graduates obtain a professional degree 24 17 of magister, or an equivalent degree, which is the 23 16 Supplementary general secondary school – liceum Polish equivalent of master’s degree depending on 22 15 uzupełniające (two years), meant for the graduate the study course profile. 21 14 of the basic vocational school, offering general up- 20 13 per secondary education and preparing them for Postgraduate master’s studies – uzupełniające stu- 19 12 the Matura examinations. dia magisterskie (two-2.5 years), meant for gradu- 18 11 ates of professional higher studies and offering 17 10 Supplementary technical secondary school – tech- them the possibility of obtaining a professional 16 9 nikum uzupełniające (three years), offers vocational master’s degree. 15 8 upper-secondary education for students in prepara- 14 7 tion for their Matura. Postgraduate studies – studia podyplomowe (one-two 13 6 years), meant for graduates of all types of higher edu- 12 5 Post secondary school – szkoła policealna (max. 2.5 cation institutions. 11 4 years), meant for people with secondary education 10 3 who want to obtain a vocational qualifications di- There are two types of higher education institu- 9 2 ploma upon the passing of an exam. tion, the University type, which offers studies in hu- 8 1 7 0 manities; science; medical science; economics; the The maturity examination is compulsory for all grad- arts; pedagogy and the professional type, which uates who apply for higher education. It comprises a educates students in specific professional areas pre- exam Pd. D. master written part assessed by external Regional Examina- paring them for practising a profession as well as bachelor tion Commissions and an oral examination assessed military studies. gymnasium by school teachers. primary school The institution of higher education runs full-time technical collage

Children of foreigners who are subject to compul- courses, evening courses, extramural courses and Maturity examination Exam basic vovational school sory education in Poland can attend primary and external courses. The basic system of studies is the upper secondary school Post secondary school lower secondary public school on the same terms as full-time mode. Maturity examination Polish pupils. This also applies for upper-secondary supplementary tech. sec. school education, although whether it is free of charge or supplementary upper sec. school specialised upper secondary school requires a fee depends on the student’s, and their Source: JPW, 2013

78 79 Labour market Labour market

Fields of Education 2012/2013 that leads to the globally recognized International Each scientific committee constitutes a self-govern- Baccalaureate (IB) certificate. ing representation of a scientific discipline for the % purpose of integrating Polish scholars. 25 Most of the English language schools use the British syllabus linked with the globally recognized Interna- 20 tional Baccalaureate (IB) certificate, other international 15 schools have internationally recognized accreditations. II.6.2. 10 The biggest number of international schools are located in Warsaw, among which most recognized Human Resources 5 are: American School of Warsaw, the International 0 American School of Warsaw, and The British School, École Antoine de Saint-Exuper (French), Lycée Fran- arts law çais de Varsovie (French), Willy Brandt Deutsche II.6.2.1 health biology physics Schule Warschau (German), Japanese School at the transport Japanese Embassy in Warsaw (Japanese). Other ma- Employment and labour force humanities informatics pedagogical engineering jor cities with international schools available include social sciences social services security services personal services Wrocław, Kraków, Poznań, Szczecin and Gdańsk. In the fourth quarter of 2012, 15.64 million Polish veterinary medicine people were employed. This number is slightly higher than that of the fourth quarter of 2011 (15.61 environmental protection mathematics and statistics II.6.1.3. Scientific and R&D million). Depending on the sector, in 2011 12.7% journalismbusiness and information and administration architecture and construction of working-age Poles were employed in agriculture, manufacturing and processing

agriculture and forest technology 30.6% in industry and 56.7% in services. In com- There are two important institutions responsible parison with figures for 2010 and 2009 the employ- Source: Central Statistical Office, 2013 for Poland’s scientific development: the State Com- ment rates have not significantly changed. mittee for Scientific Research (Komitet Badań Nau- kowych, KBN) and the Polish Academy of Sciences Employment by type of ownership eign language studied at Polish univesities is English, Professor (profesor) – the highest academic degree, (Polska Akademia Nauk, PAN). followed by German, Russian and Spanish. awarded by the President of the Republic of Poland after receiving a petition from the academic council KBN is a governmental body, which was set up by Academic degrees and upon the resolution of the Central Commission. the Polish Parliament. It is the supreme authority on State policy in the area of science and technology. 24,10% Many departments of state higher education estab- It combines the role of a ‘typical’ ministry of science lishments run doctoral courses (three-four years). II.6.1.2. International schools and technology with that of a funding agency pre- Candidates applying for PhD course must have a senting guidelines for the country’s scientific policy, master’s degree or an equivalent, while foreign can- submitting plans for budgetary expenditure in the 75,90% didates must provide a diploma of a master’s degree International schools, providing pre-school, primary area of research in science and technology, and course of study obtained in Poland or a legalised di- and secondary education are now present in most distributing funds among scientific and research in- ploma or another certificate confirming the comple- of Polish major cities and their number is growing stitutions. KBN’s works are headed by its chairman, Private tion of higher education obtained abroad and rec- since the 1990s. They are attended both by children the Minister of Science. Public ognised under separate provisions as equivalent to of expatriates living in Poland and local children a polish degree. There are several academic degrees and youth, whose parents decide to enroll them to PAN is a state scientific institution that functions as that graduates continuing their education at doctoral international school with main reason of ensuring a learned society acting through an elected corpo- Source: Central Statistical Office. Concise Statistical -Year courses can work towards, including: best language training available. Additionally inter- ration of leading scholars and research institutions. book of Poland 2013. national schools usually offer high quality studying Operating through its committees, PAN has become Doctor (doktor) – after three to four years of study, conditions such as small classrooms, abundant a major scientific advisory body. PAN as a research The average working time in the fourth quarter of this is awarded to candidates who submitted and extracurricular activities and a diverse and multina- centre is currently comprised of 79 research estab- 2012 was 38.5 hours a week. However, The 2012 successfully defended a doctoral dissertation before a tional groups of students in almost all classes. lishments (institutes and research centres, research CBOS survey indicates that Poles spend 46 hours thesis committee and passed a doctoral examination. stations, botanical gardens and other research weekly in the workplace. The most popular language used in Polish inter- units), and auxiliary scientific units (archives, librar- Habilitated doctor (doktor habilitowany) – awarded national schools is English, but there are schools ies, museums and foreign PAN stations). A very The overall activity rate is 56%, meaning that 56% of to candidates with a doctor’s degree having impor- providing education in other languages, including special part of the Academy is its committees, the Poles over the age of 15 are economically active. This tant academic achievements and who proposed a German, French, Italian and Japanese. Most of the Academy’s network of 107 committees constituting includes both employed, unemployed and pensioners. dissertation and completed the procedure. English language schools use the British syllabus a major representation of all researchers in Poland. The activity rate for people in the working age is sig-

80 81 Labour market Labour market

nificantly higher and equals 73.2%. The rest is eco- Employees by employment status II.6.2.2 Unemployment Unemployment in Poland by voivodships nomically passive. Most of these people are obtaining education or additional skills. Others are passive due to Employed sickness or disability, family commitments, or because Employers and Registered unemployment in March 2013 was 13.3%. they have retired already. The activity rate significantly 11% own-account workers The graph below represents the monthly rates since varies for different levels of education. Among people Employed on private 1990. One can see the seasonality whereby every year with tertiary education, the activity ratio is 80.1%, 16% farms in agriculture there is a peak in winter. This is mostly due to con- while among people with vocational education, the 74% struction work and agriculture, which tend to follow ratio is 66% (secondary vocational) and 63.9% (ele- seasonal patterns. mentary). The lowest ratio is among people with basic education (19.1%) followed by 47% as the ratio of Unemployment rates differ from region to region. people with general secondary education. Source: Central Statistical Office. Concise Statistical -Year The lowest unemployment at the end of May 2012 book of Poland 2013. was registered in Wielkopolskie voivodship (9.3%), followed by Mazowieckie (10.3%), Śląskie (10.5%), and Małopolskie (10.7%). The highest unemployment Employment by sections was registered in Warmińsko-Mazurskie (19.7%), Zachodniopomorskie (17.3%), and Kujawsko-Pomor- 2009 2010 2011 2012 skie voivodship (17%). The map below presents the Legend Sections umemployment rates in the various voivodships as of in thousands May 2012. Poland 12.6% Total 13 782,3 14 106,9 14 232,6 14 213,4 <10% 10.1–12.5% Agriculture, forestry and fishing 2 124,9 2 376,1 2 376,7 2 378,0 12.6–15% Mining and quarrying 183,4 173,0 175,6 174,5 >15% Manufacturing 2 420,6 2 436,5 2 443,6 2 426,9 Source: Central Statistical Office, Unemployment Rates, 2013 Electricity, gas, steam and air conditioning supply 151,3 159,1 152,8 143,3 Water supply; sewarage, waste management 136,5 140,9 143,3 143,2 and remediation activities Construction 882,7 865,2 909,2 879,9 Monthly unemployment rates 1990-2012 Trade; repair of motor vehicles 2 179,5 2 189,1 2 158,8 2 167,3 % 25 Transportation and storage 693,7 701,4 727,9 732,9 Accomodation and catering 252,5 237,4 237,5 235,9 Information and communication 239,6 237,8 249,4 255,3 20 Financial and insurance activities 333,9 337,9 346,3 345,8 Real estate activities 193,1 196,0 198,2 195,1 15 Professional, scientific and technical activities 480,2 481,3 518,2 525,2 Administrative and support service activities 375,7 411,7 413,9 421,4 10 Public administration and defence, 964,5 970,1 951,9 958,2 compulsory social security Education 1 071,9 1 079,9 1 084,7 1 088,1 5 Human health and social work activities 747,6 764,4 775,4 772,5

Arts, entertainment and recreation 146,3 148,4 153,3 152,0 0 Other service activities 204,4 200,7 215,9 217,9 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Central Statistical Office, Employment in the National Economy in 2013 Source: Central Statistical Office, Monthly Information on Unemployment in Poland March, 2013

82 83 Labour market Labour market

Unemployment rate in selected countries with foreign capital offer higher salaries than domes- % tic companies with the differences ranging from 30 to 22 2003 120%, depending on the sector. 20 2011 Relative deviations of the average sector-specific gross salary from the average gross salary 18 16 % -60 -40 -20 0 20 40 60 80 100 14 Agriculture, forestry and fishing 12 Industry 10 Minining and quarrying 8 Manufacturing 6 Electricity, gas, and water supply 4 Water supply; sewerage, waste management 2 Construction 0 Trade and repair

Italy Spain Japan Latvia Malta Transportation and storage Cyprus FranceGreece Ireland Poland Austria EstoniaFinland Norway Ukraine BelgiumBulgaria Portugal SlovakiaSlovenia Sweden Hungary Denmark Lithuania Germany Romania Luxemburg Accommodation and catering Netherlands United States Czech Republic Information and communication Source: World Bank 2013 United Kingdom Russian Federation Financial and insurance activities Real estate activities Unemployment rates can also vary within different II.6.2.3 Salaries Professional, scientific and technical activities regions. The lowest rates are always in the big cities: Poznań in Wielkopolskie (4.2%), the capital city War- Administrative and support service activities szawa (4.4%), Katowice in Śląskie (5.2%), Wrocław in The average gross salary within the private sector in Public administration and defence; social security Dolnośląskie (5.8%), Kraków in Małopolskie (5.9%). 2012 was 3,343.51 PLN (ca. 1100 USD). The average However, unemployment rates are growing in salary in the public sector is higher than gross wages Education more rural districts. Mazowieckie, a region with a in the private segment - at 4,107.25 PLN in 2012 this Human health and social work activities low overall unemployment rate, contains a district constitutes a difference of 23%. Depending on the in- with an unemployment rate of more than 37% vestigated quarter, the salaries in Poland rose approxi- Arts, entertainment and recreation (Szydłowiec) and there are many with levels of un- mately 5-6% per annum between 2005 and 2012. In employment significantly above or close to 20%. In the years 2007 and 2008 the annual growth in salaries Other service activities Wielkopolskie there is only one district above 20%. was increasing to reach 8-11% pace, a trend which Małopolskie, with an unemployment rate of 11.5%, has been counteracted by the global economic crisis. Source: Concise Statistical Yearbook of Poland, Central Statistical Office, Warsaw 2012 slightly below the Polish average, has several dis- The latest data show the increase in gross salaries in tricts with unemployment of around 19%. 2012 of 3.5% compared to 2011. The highest and lowest salary medians

The attached graph presents the Polish unemploy- This picture can be supplemented by HR consult- Industry sector Median salary in PLN Industry sector Median salary in PLN ment rates compared with other selected countries ing companies that are investigating the market (based World Bank’s methodology). It is clear from based on opinion polls. The poll performed in 2012 IT 6000 Culture and art 3100 this that among other European countries, Poland by Sedlak&Sedlak, with more than 114 thousand peo- in 2011 had lower unemployment ratio than other ple participating gives insight into salaries of special- Telecommunications 5800 Education 3000 countries in the region such as Slovakia, Latvia, Lithu- ized workers. As the bulk of interviewees are young Insurance 5100 Public sector 3000 ania but still significantly higher than that of Germany and educated, the survey is able to show the cost of or Czech Republic. The numbers are changing dynami- skilled labour. The survey finds that among the five Banking 5000 NGOs 3000 cally due to ongoing economic crisis that started in the top paying sectors, women are significantly underpaid late 2008. compared to men with the difference of median salary Energy and heat 4700 Healthcare 3000 lower of 2,100 PLN. Moreover, in most sectors firms Source: Sedlak&Sedlak, Report 2012

84 85 III. Setting up business - get to know about the first steps to be taken

86 87 III.1. Incorporation

■ Limited Partnership (LP), III.1.1. ■ Partnership limited by shares, ■ Limited Liability Company (LLC), Conducting ■ joint-stock company / Public Limited Company (PLC). business activities Despite these limitations, such business entities incorporated in Poland in accordance with Polish regulations are permissable to conduct business without restriction based on the same rules as Polish and other The general rules related to conducting business are EU companies. It follows that there are no restric- regulated by the Freedom of Economic Activity Act tions related to the source of capital and, conse- dated on 2 July 2004. The Act is also known under quently during its performance, no administrative the name of ‘business constitution’, because the permit can be applied for by virtue of the mother Act governs the undertaking, conducting and legal company being the source of capital. limitation of business activities in Poland. The Act is a source of various terms, e.g. entrepreneurship or Instead of incorporation of a legal entity, a foreign economic activity, that remain applicable in relation company may create a branch or a representative of- to business activities. The Act also contains a list of fice in Poland. specific licenses that have to be acquired in order to undertake certain business activities. The branch office is restricted in conducting business activity only in the scope of the mother com- The rules of the Act are applicable to natural per- pany. The registration process is similar to the LLC, sons and legal entities. However, the Act distin- because it has to be registered in the Entrepreneurs’ guishes between the investors from EU/EFTA and Register maintained by court (hereinafter referred as other third party countries. “KRS”). The branch office has its own KRS number.

Natural persons and legal entities from the EU/EFTA Furthermore, the representative office may only countries, in regard to conducting business in Po- perform in the field of advertising or marketing land, fall under under the same conditions and rules activities for the benefit of the mother company. as Polish individuals or companies. Such a foreign However, such entities are obliged to perform all ac- entity may choose any legal form for their business tivities in accordance with Polish law, includin Polish activity in Poland freely with the same restrictions Accounting Rules. Register of Representative Of- as are applicable for Polish naturals or companies, fices of Foreign Companies is held by the Ministry if any. of Economy in Warsaw. The representative office and branch office shall appoint the representative acting on Unless international agreements state otherwise, their behalf. and all requirements are fulfilled, a foreign company or natural person based outside the the EU/EFTA Polish regulations allow domestic and foreign en- zone may conduct business only in the form of: terprises to operate under a wide variety of legal

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forms. Besides the limited liability company, which is The LLC may be incorporated by one or more pany before the third parties. The duties and pre- the economic interests of the company’s business probably the most attractive legal vehicle for foreign person or/and entity. However, the LLC cannot be rogatives of the Management Board differ signifi- partners and of public institutions (e.g. tax authori- investors to conduct business in Poland, there is a incorporated by another single-shareholder LLC cantly from the duties and prerogatives of the Board ties), Polish law states that in certain circumstances number of other forms of business organisations. governed by Polish or foreign law. Nevertheless, of Directors , which is typical for the common law members of the Management Board may be liable Polish law does not prohibit the holding of 100% sates. The Management Board may consist of one for the debts of the company. The Polish Code of Commercial Companies sets forth of shares by another single-shareholder LLC. There- or more members (no difference whether Poles or six forms of commercial association as follows: fore, the above mentioned restriction concerns only foreigners), that can be appointed from the share- the registration process of the LLC. holders or from third persons. Unless the Articles III.1.1.2. ■ General partnership, of Association stipulate otherwise, members of the ■ Limited Partnership (LP), The incorporation of a LLC is executed before the Management Board are appointed and dismissed Joint-stock company / Public ■ Limited Liability Partnership (LLP), Polish notary and the Articles of Association must by the resolution of the General Meeting of the Limited Company (PLC) ■ Partnership limited by shares, be notarized. The company may also be incorpo- Shareholders. ■ Limited Liability Company (LLC), rated by attorney in fact, acting upon prior given ■ joint-stock company / Public Limited Company (PLC). power of attorney. The statutory duty of the Supervisory Board is to exercise permanent control over all areas of the company’s A joint-stock company / public limited company is Apart from the Polish Code of Commercial Compa- The Articles of Association should specify: activities, however, as stated hereinabove, there is no very similar to a limited liability company with re- nies, Polish Law also provides other legal forms to obligation to appoint the Supervisory Board. The Man- gard to the liability of shareholders, governing body conduct business activities. Below we will provide ■ the business name of the company including agement Board is not bound by the instructions given and taxation. However, the provisions stipulated by with a short description and characteristic of each the additional description ‘Spółka z ograniczoną by the Supervisory Board. The Supervisory Board con- the Code of Commercial Companies in relation to of the aforementioned forms. However, we will con- odpowiedzialnością’ or its abbreviation ‘sp. z o.o.’, sists of at least three members appointed by the resolu- the PLC are relatively more formalistic and provide centrate on the limited liability company, which is ■ the seat of the company, tion of the General Meeting of the Shareholders. The additional obligations which must be fulfilled by the often chosen by foreign investors. ■ the scope of the business activity, foreign investors usually do not appoint the Supervisory bodies of the company. This has a direct impact on ■ the amount of share capital, Board in their Polish subsidiaries. the cost of incorporation and running the Compa- ■ information, on the number of shares along with ny. In fact, this legal form is used for business plan- III.1.1.1. Limited Liability their value, owned by each shareholder, The third body - The General Meeting of the Share- ning IPO, searching for PE/VC investors or when this ■ whether the company has been incorporated for holders, consists of the shareholders. The Code of form is required by Polish law (e.g. banks, pension Company limited period of time. Commercial Companies distinguishes between the funds and other financial institutions). ‘Ordinary’ and ‘Extraordinary’ General Meetings. As mentioned above, the Limited Liability Company Code of Commercial Companies outlines the mini- The Ordinary General Meeting of the Shareholders Similarly to LLC, PLC is treated as a separate legal (LLC) is the most popular legal vehicle for foreign mum content of the Articles of Association, but it is is held within six months of the end of each finan- entity from its stockholders or sole stockholder. The investment in Poland. quite common to have a wide range of additional cial year. Polish law stipulates precisely which issues PLC can be incorporated by one or more person/ rules which make this legal form very flexible. Un- should be put on the agenda (e.g. consideration entity. However, the PLC cannot be incorporated by The Polish LLC remains very similar to the German der Polish law, the LLC must have a minimum share and approval of the management report and finan- another single-shareholder limited liability company limited liability company as its concept was inspired capital of 5,000.00 PLN with the minimum nominal cial report). The Extraordinary General Meeting is governed by Polish or foreign law. The restriction by German law. The name of the LLC emphasises value of 50,00 PLN per each share. Contributions called in cases stipulated in the Code of Commer- concerns only the registration process. The statute of the fact that the shareholders of the entity are not may be made in cash or in kind. The contribution cial Companies or in the Articles of Association The the PLC should be signed before the Polish notary. personally liable for the company’s debts. The main in kind remains at the free disposal of the manage- Extraordinary General Meeting might also called in Nonetheless, the company may be incorporated by feature of the LLC is to ensure that the company is ment board. case any authorised person or body finds it neces- attorney in fact upon the power of attorney grant- treated as the separate legal entity from its share- sary. The shareholder may be present at the meet- ed to him. The company comes into existence on holders or sole shareholder. Corporate bodies of a limited liability company ing either in person or by representatives with the the implementation of the statute. Only registration power of attorney granted in writing. in the Entrepreneurs’ Register provides the PLC with The significant advantages of the LLC in comparison The limited liability company may have three gov- its full legal status. with other legal forms provided by Polish law are erning bodies: the management board, the general Liability in a limited liability company as follows: meeting of of the shareholders and the supervisory The statute should specify: board. The latter is required only if the company The shareholders of a LLC are not liable for the ■ relatively low costs of incorporation of the company, has more than 25 shareholders and if its share capi- company’s debts or obligations. Instead, share- ■ the business name of the company, including the ■ the company may conduct business activities im- tal exceeds 500,000.00 PLN. The Polish corporate holders can only lose their investment (monetary additional description ‘spółka akcyjna’ or its ab- mediately after signing the Articles of Association, governance system is basically a two-tier system contribution or in-kind contribution invested to breviation ‘S.A.’, ■ fast registration process at KRS, with separation of the management and oversight take up the shares in the share capital of the com- ■ the seat of the company, ■ limited liability and low minimal share capital, functions carried out by the supervisory board is pany). Polish law states that other persons may be ■ the scope of its business activity, ■ clear and simple rules in relation to the daily man- prescribed by law. liable for a company’s obligations. In regard to the ■ whether the company has been incorporated for agement of the company, company being in organisation process, the liability limited period of time, ■ low operational costs. The Management Board is a body which deals with for the company’s obligation is born jointly by the the affairs of the company and represents the com- company and people acting on its behalf. To protect

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■ the amount of the company’s share capital and in certain circumstances members of the management the Limited Partnership there are general partners capital is PLN 50,000.00 and the statute must be the amount paid up to cover the share capital be- board may be liable for the debts of the company. with unlimited liability and limited partners, whose signed in front of the Polish notary. The partnership fore its registration, liability is restricted to their fixed partnership con- comes into existence upon the registration in the ■ the nominal value of the shares and their number tributions. The name of the general partner should Entrepreneurs’ Register. with an indication of whether they are registered be revealed in the partnership’s name. On the other or bearer shares, III.1.2. Other hand, if the business name of the Limited Partner- ■ whether various types of shares are provided, and ship includes the name of a limited partner in the III.1.2.6. Sole proprietorship if so, the number of shares of a specific type and partnership’s business name, the limited partner their related rights, corporate entities bears an unlimited liability as if he were the general ■ the founder’s name, partner. Although a partnership itself is not a legal The simplest form of doing small business in Poland ■ the number of members of the Management entity, it may acquire rights and incur liabilities, ac- is the legal form known as sole proprietorship. The Board and Supervisory Board (at least the mini- quire title to real estate and sue or be sued. proprietorship is created upon the registration in mum and maximum number of members of these III.1.2.1. Civil partnership the Business Activity Register held by the head of bodies with information concerning the entity au- The mixed construct of the Limited Partnership with the municipality. The owner has unlimited liability thorised to define the membership), a LLC as a sole general partner is used quite often for any debts connected with the sole proprietor- ■ the gazette selected for publication of the compa- A civil partnership governed by the Civil Code is by foreign investors in order to limit liability and to ship. This legal form is used by foreign managers ny announcement if the company intends to pub- used for small businesses. A civil partnership does achieve the optimal taxation model. and directors as a platform to render their services lish announcements in addition to those published not have any legal personality and is considered by for Polish companies. in Court and Business Gazette (Monitor Sądowy Polish law as a civil agreement between at least two i Gospodarczy). individuals or legal entities. The partners of the civil III.1.2.4. Limited Liability partnership are jointly and separately liable for any III.1.2.7. Branch office Under Polish law the joint-stock company must have debts incurred in the partnership. The partners are Partnership a minimum share capital of 100,000.00 PLN and the registered in the Business Activity Register. The prof- minimum nominal value of the stock must be 0.01 PLN its of the civil partnership are taxed with personal Foreign investors may establish branches in Poland Contributions may be made in cash or in kind and income tax due to the fact that civil partnerships are A Limited Liability Partnership is a partnership in- to conduct the same business as the foreign inves- the contribution in kind must be at the disposal of perceived as transparent for tax purposes by Polish corporated by professionals (such as lawyers, tax tor. From a legal point of view, the branch is part of the Management Board. tax law. Foreign investors rarely choose this legal ve- advisors or doctors), for the purpose of rendering the foreign enterprise and does not have its own hicle for their investments in Poland. professional services. A partner of the Limited Li- legal identity. The branch is registered in the Entre- Corporate bodies of a joint-stock company / PLC ability Partnership may only be a person authorised preneurs’ Register and may conduct business upon to conduct the profession. The main feature of the its registration. The PLC company has three governing bodies: the III.1.2.2. General partnership Limited Liability Partnership is that a partner is not li- Management Board, the General Assembly and the able for the obligation of the partnership incurred in Supervisory Board, which is statutory. The features, du- connection with the professional activities of other III.1.2.8. Representative office ties and obligation of the Supervisory Board and Man- A General partnership is an association of at least partners. agement Board are almost the same as in case of a LLC. two partners operating an enterprise under its own business name. The General partnership is gov- Foreign investors are also allowed to establish rep- The General Assembly is a body created by stock- erned by the Code of Commercial Companies. The III.1.2.5. Partnership resentative offices, which in their simplest form only holders who may exercise the rights stipulated in company is registered in the Entrepreneurs’ Regis- regard the involvement of international business in the Code of Commercial Companies and the statute. ter (KRS). The General partnership is not a separate limited by shares Poland. Despite this, the representative offices may An Annual General Assembly must be called within entity, it is a legal organisation with the capacity to not conduct business activities in Poland and can six months of the company’s financial year and the acquire rights, incur debts, sue and be sued. The A Partnership limited by shares has two types of only carry out activities regarding the advertising items on the agenda are stipulated by law. rights and obligations of the partners are stipu- participators. It has at least one partner with un- and promotion of a foreign investor. lated in the partnership agreement. Each partner limited liability (general partner) and at least one Liability in a joint-stock company / PLC has unlimited liability for the debts of the General partner that is a stockholder. The Partnership limited partnership, where execution from the assets of the by shares is a mixture of a partnership and a joint III.1.2.9. European Company Just as in case of the LLC, the stockholders of the PLC partnership proves ineffective (subsidiary liability of stock company. This form of activity is relatively un- are not liable for any debts and any obligations of the the partner). common, however, it is used in atypical investments company, and Polish law does not provide any exemp- conducted by PE/VC investors. The business name On October 8, 2004 the council regulation (EC) tions from this principle. The stockholders can only lose of a joint-stock company should include the names No. 2157/2001 on the Statute for the European their investment (e.g. monetary contribution or in-kind III.1.2.3. Limited Partnership of one or more general partners and the additional Company (SE) entered into force. The European contribution invested to take up the shares in the share description (‘spółka komandtowo-akcyjna’) If the Company is regulated by the European Economic capital of the company). To protect the economic inter- stockholders’ name is included in the partnership’s Interest Grouping and the European Company Act ests of the company’s business partners and of public In the General partnership all partners are fully liable name, the stockholder has unlimited liability for any dated on March 4, 2005. A European Company may institutions (e.g. tax authorities), Polish law states that for the partnership’s debts, whereas in the case of obligation of the partnership. The minimal share be formed in one of four ways: the merger of at

92 93 Incorporation Incorporation

least two joint-stock companies, the formation of ■ a list of the shareholders, the number and nomi- a holding company, the formation of a joint sub- III.1.3. nal value of shares held. sidiary, or the conversion of a joint-stock company under the additional conditions prescribed by law. Establishing and The following attachments to the application form The SE must have a minimum subscribed capital (KRS-W4) are required upon registration of the PLC: of 120,000.00 EUR. Monetary contributions and registering an entity in-kind contributions are permissible. In case of a ■ a company’s statute, cash contribution, at least one quarter of the nomi- ■ notary deeds on incorporation of a company, and nal value should be covered before the registration. on the subscription of stocks, Shares subscribed for in-kind contributions must be The first step in incorporation an entity is to choose ■ documents appointing the company’s governing covered in full no later than one year after the date the appropriate legal form. This has a significant bodies (the Management Board and the Supervi- of the company’s registration. effect on the further proceedings. The LLC or PLC sory Board), are probably the most attractive legal vehicles for ■ specimen signatures of all the members of Man- The Statutes of the SE must constitute as governing foreign investors conducting business in Poland. agement Board certified by a notary or made in bodies the the General Meeting of the Shareholders Therefore, the following explanations will focus person through their presence in Court, and either a Management Board and a Supervisory on the hereinabove. The formation of LLC and ■ a statement from all members of the Manage- Board (known as two-tier system) or an administra- PLC is executed before the Polish notary and the ment Board that the stock payments and con- tive board (known as one-tier system). Under the Articles of Association must be notarized. In ef- tributions in kind envisaged by the charter have two-tier system, the SE is managed by the Man- fect, the company as an entity is incorporated. The been effected lawfully, agement Board. The member or members of the company in an organization (before the documents ■ a confirmation for the stock payments from bank Management Board are empowered to represent are submitted to the Court) may, in its own name, or an investment company. the company. They are appointed and dismissed by acquire rights, including ownership of immovable the Supervisory Board. No person may be a member property and other rights in remit, incur obligations, The court fee for the registration is 500.00 and of both the Management Board and the Supervi- sue, and be sued. The company must also choose 100.00 PLN for the publication in Monitor Sądowy sory Board of the same company at the same time. their business address. In the registration process, i Gospodarczy. Under the one-tier system, the SE is managed by the address is confirmed by the lease agreement or an administrative board. The member or members the title of ownership of the real estate. The initial The following applications are submitted alongside of the administrative board have the power to rep- capital of the company must be paid in full by the the application for the company’s registration: resent the company. Under the single-tier system, LLC and at least in 25% by the PLC before the mo- the administrative board may delegate the power of ment of submitting the documents to the Court. All ■ an application for a REGON identification number management to one or more of its members. companies in Poland are required to open a bank issued by the Central Statistical Office (Główny account. The documents required for opening of an Urząd Statystyczny) – free of charge, account may be different at every bank (e.g. articles ■ an application for a Tax Identification Number is- III.1.2.10. European of association/statute, and the specimen signatures sued by the Tax Office, accompanied by confirma- of those authorized to represent the company). It is tion of the legal title to the office or real estate Economic Interest Grouping also possible to open an account for the company where the company has its seat – free of charge, in the organization. The next step is to submit an with the exception of the cost if applying for a tax Apart from the European Company, Polish law application to the National Court Register (KRS). number for VAT purposes - 170.00 PLN, provides a second supranational form of business ■ an application to National Insurance – free of organisation, known as the ‘European Economic Apart from an application form (KRS-W3), the fol- charge. Interest Grouping’. The main feature of the EEIG is lowing attachments are required upon registration that its purpose is not to make profits but to de- of LLC: velop the economic interests and activities of its members. ■ articles of association, ■ documents appointing the company’s governing body (the Management Board), ■ a statement from all members of the Manage- ment Board that the contributions towards initial capital have been made by the shareholders in full, ■ specimen signatures of all members of the Man- agement Board certified by a notary or made in person through their presence in Court,

94 95 III.2. Taxes

III.2.1. The Polish tax system consists of the Tax Code and the Acts regulating particular types of taxes. Gener- General Overview ally, the taxes in Poland may be divided on direct and indirect. In mechanism of direct taxation the taxpayer bears the cost of the tax. In this group in Poland there are below taxes: income (PIT and CIT), The tax system applicable in Poland is based on inheritance and endowment, on civil law transac- three pillars: tions, real estate, agricultural, forest, means of transport. The second group are indirect taxes. In ■ the Constitution of the Republic of Poland, indirect taxation mechanism the tax is paid during ■ internal tax regulations, the purchase of the good or service. These are: ■ EU tax regulations regarding Art. 93 of the Treaty VAT - Tax on Goods and Services, Excise, Duty. establishing the European Community. The Tax Code specifies the general definitions, The Constitution of the Republic of Poland is the rights and obligations of the taxpayers as well as most important legal document in the Polish tax the tax authorities and the tax procedures. system because it regulates all principles to create an applicable law system in Poland, including the Since May 1st, 2004 - the date of entering Poland tax system. According to the Constitution, the fol- to the European Community, Polish legislators are lowing subjects can be established in law: obliged to harmonise the internal tax systems with EU regulations. The special accent has been put on The levying of: harmonisation of the Value Added Tax and Excise ■ taxes, Tax. As the consequence in case of the lack of the ■ other public fees, implementation of the EU regulation to internal VAT and Excise regulations or discrepancies be- The definition of: tween the VAT and Excise taxation on the EU and ■ entities and subjects of taxation, internal level, the tax payer shall have the right to ■ tax rates, use the EU regulations directly and shall not borne ■ exemption, tax relief and remission in taxes, the negative consequences of such action. ■ categories of subjects exempted from tax. The Polish tax authorities consist of (in accordance The Constitution includes the rule that its regula- with their rank): tions should be applied directly unless its other regulation says otherwise. It means an interpreta- ■ the Minister of Finance, tion of tax regulations should always conform to ■ tax chambers and customs chambers, the Constitution. If there is a regulation in tax law ■ tax offices and customs houses. that is inconsistent with a certain regulation of the Constitution, the Constitution should be applied.

96 97 Taxes Taxes

place of residence or board of directors in Poland The legal basis for a tax capital group is an agree- Since 2006, Polish taxpayers may apply to the Min- III.2.2. Taxation of (non residents) are liable to a tax obligation only ment for three years, in the form of a notary deed ister of Finance with motion to conclude the agree- for profits generated in Poland. that has to be registered at a tax office. Companies ment regarding the confirmation of the used Trans- company from the group cannot use any tax exemptions. fer Pricing Policy. This is known as the Advanced Taxation of partnerships Pricing Agreement (APA) and is related not only to Transfer pricing transactions between Polish taxpayers, but also be- Incomes and costs generated by a partnership are tween Polish and foreign entities. taxed separately by each partner according to the All transactions carried out between related in- III.2.2.1. Income tax proportion of possessed shares and with the appro- dividuals and/or corporate entities are under the The main advantage of the APA is the formal con- priate tax rate from PIT or CIT Act, depending from special supervision of tax authorities. The reason firmation by the tax authorities that the calculation the legal status of each partner. is protection against the transfer of profits of the and application of transfer prices chosen by a tax- Income tax is governed in the Corporate Income Tax related entity to the country where are more favour- payer are correct. The APA obliges tax authorities to Act, hereinafter referred to as ‘CIT’, and the Person- Branches of foreign companies able tax rates. accept presented methodology. al Income Tax Act, hereinafter referred to as ‘PIT‘. A regulation type that should be used in a case Foreign investors have the possibility to choose a According to Polish regulations, a relationship ex- The APA concerns transactions which shall both be depends from a legal form of an entity. In conse- legal form for their activity in Poland. This could be ists when: concluded after the submission of an application quence, either the income of the entity as a whole a partnership, a capital company or a branch. for the APA or those that started before and are will be taxed (i.e. CIT form a limited company and ■ an entity participates directly or indirectly in the currently in progress. It does not refer to transac- joint stock company) or the incomes of particular The branch is, in general, treated for tax purposes management or control of another entity or holds tions which were started before the submission of shareholders (i.e. limited partnership or registered as a Polish company, with the consideration of the at least 5% of shares in another entity (capital an application and on the APA completion date partnership). In the second case mentioned above legal form of its head office. Only Polish-generated relationship), were subject to any tax control or proceedings. (i.e. companies in polish legal system named as incomes and costs are subject to Polish taxes. ■ there is a familiar relation or other relation result- partnerships), in order to establish if the taxation ing from an employment between individuals Subject of taxation will be in accordance with PIT or CIT Act, the legal From the legal point of view a branch is not a sepa- who act as a manager or a supervisor in different status of the shareholder of the partnership must rate entity, but a unit of a foreign company. There- corporate entities and/ or the same individuals act The subject of taxation is a profit regardless of the be considered. If the partner is natural person - he fore, there is no withholding tax on profits trans- as a manager or a supervisor in the same time in income source it was received from. Profit is an will be taxed directly from the incomes gained by ferred to its head office. different entities. amount of surplus between revenues and tax-de- the partnership, in accordance with PIT Act. If the ductible costs received in a fiscal year. If the amount partner is a limited liability company or a joint-stock Tax capital group If a relationship exists, each one of the related enti- of tax-deductible costs exceeds the amount of in- company - the entity will be taxed directly from in- ties are obliged to prepared the document called: come, the difference is a loss. If a taxpayer incurs a comes gained by the partnership in accordance with It is possible to optimise corporate income tax (CIT) Transfer Pricing Policy, which should describe all loss, he can reduce profit in following five years by CIT Act. obligations by forming a tax capital group. The transactions between the related entities and in- the amount of this loss, but the reduction cannot main advantage of this solution is the calculation of clude amongst others a calculation of prices and be higher than 50% of the loss in one year. According to CIT: a taxable profit by adding the profits and losses of point out the risks inherent to each party. The aim ■ a legal person, all the companies in the group. However, the condi- of such documentation is to show that the condi- ■ an organisational entity without corporate per- tions that have to be fulfilled are highly restrictive. tions of the transactions are the same as those be- sonality, except partnerships, tween non-related entities. In the case of a tax con- ■ tax capital group, A group can be formed only by at least two limited trol the documentation has to be presented within ■ starting from January 2014, it is probable that also liability and/or joint-stock companies, having their seven days of the date of request. limited joint-stock partnership. registered office within the territory of Poland, if: If prices do not comply with arm’s length principle, According to PIT: ■ an average share capital of each company in the the tax authorities are entitled to estimate the value ■ a partner in a limited partnership or registered group amounts to at least PLN 1,000,000, of transactions using one of the following methods: partnership if he is a natural person, ■ one of companies in the group, referred to as the ■ a company without corporate personality that has holding company, owns 95% of shares directly in ■ comparable uncontrolled price method, its place of residence or board of directors in an- the share capital of other companies, called sub- ■ resale price method, other country where according to the law of this sidiaries, ■ reasonable margin (cost plus) method, country it is treated as a legal person and all its ■ there are no other relations in the group and also ■ transaction profit method. income is taxed in the country regardless of the with companies outside the group, country generating the income. Taxpayers that ■ all companies in the group have no tax arrears, If a profit or a loss calculated by the tax authorities have their place of residence or board of directors ■ the ratio of profit to income generated by the is respectively higher or lower than that given by an in Poland (residents) are liable to a tax obligation group in every tax year amounts to at least 3%. entity, a 50% penalty tax rate is applied. for total profits regardless of the country generating those profits. Taxpayers that don’t have their

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However, in some cases pure revenue is to be taxed. can be paid back to shareholders only in case of the ■ other capital companies, whose income is taxed deduct it from his own output tax or to receive it These are: dividends, licence fees (i.e. interests from dissolution of the capital company. in an EU country, directly holds no less than 25% back from a tax office. loans, royalties) as well as provision of intangible shares of both aforementioned capital companies. services (such as management and advisory services Examples of other non-deductible costs: Subject of taxation: or market research). It is important that taxation of With respect to dividends, the exemption applies the above should be done with consideration of the ■ non depreciated value of fixed assets that are when a capital company from an EU country direct- ■ payable delivery of goods and payable providing double taxation avoidance agreements. Addition- spent for free, ly holds no less than 10% of shares from a Polish of services in Poland, ally in case of related entities within EU and EEA, ■ most penalties and fines, capital company for a continuous period of at least ■ export of goods, there is the tax exemption for dividends and since ■ expenditures for a car over determined limits, two years. Both acts (CIT and PIT) allow a number ■ import of goods, July 2013 - for licence fees. ■ representation expenses. of exemptions or lower tax rates for the income ■ intra-community acquisition of goods with remu- profit generated by non-residents in Poland. neration in Poland, The Polish legislator excluded some incomes and The definition of revenues includes, amongst oth- ■ intra-community delivery of goods. costs from the taxation subject; therefore they can- ers, due revenues, even if they are not received, Therefore a non-resident’s place of residence and not be taken into consideration by calculating the excluding payments in advance, free and partially regulations regarding double tax treaties, of which Taxable person: profit. free benefits. Poland is part, should be taken into consideration when settling the final tax rate. ■ a legal person, This regulation applies, for example, in cases of loan Tax rates ■ an organisational entity without corporate per- and credit interests paid by a Polish corporate entity Obligations sonality, to its affiliates. If all the liabilities of a Polish- cor The special exemption concerns licence dues and ■ individuals that carry out an independent business porate entity from different sources (such as loans, interests and dividends paid by a Polish capital com- According to the general rule, a payer of income activity (VAT has its own definition of business credits and invoices), due to its affiliates who hold pany to another capital company outside Poland or tax is obliged to pay a tax advance before the 20th activity, therefore every case should be analysed no less than 25% of shares, exceed three times the the EU. Regarding licence dues, and interests, the day of the month that follows the month in which separately. share capital value of the Polish corporate entity, the exemption came into force on July 1st, 2013 and the tax obligation arose or in case of ‘small’ tax- loan or credit interests are not recognised as a tax- applies if the below conditions are fulfilled: payers: before the 20th day of the month that fol- VAT payers are also entities who: deductible cost for a period in which a loan or credit lows the quarter in which the tax obligation arose. exceeds a triple share capital value. This limitation ■ an EU capital company holds directly no less than Additionally, a taxpayer has an obligation to submit ■ perform intra-community delivery of new trans- was put into force to avoid so-called ‘thin capitali- 25% shares in a Polish capital company, an annual tax declaration within three months fol- port means, sation’, which refers to the financing of a current ■ a Polish capital company holds directly no less lowing the year in which tax obligation arose. ■ perform intra-community acquisition of goods in business activity via loans and credits. This can easily than 25% shares in a capital company from an Poland, be paid back to the borrower instead of capital that EU country, In case of dividends, licence dues and intangible ■ are recipients of services provided or goods de- services paid to affiliates, and to be taxed with livered by taxpayers having their registered seat, withholding tax (only if the tax exemption de- fixed place of business activity or place of resi- scribed above is not applicable), the tax has to dence outside Poland. Tax rates be paid within seven days following the month in which the tax obligation arose. This rule is how- Entities having their registered seat, fixed place of Income source Tax rate ever applicable only to those foreign affiliates/ business activity or place of residence outside Po- shareholders that are legal persons. In case of the land and who are subject to registration as a VAT 18% up to PLN 85,528 business activity (self-employed) unless the linear taxation affiliates/shareholders (taxpayers of WHT) that are payer in Poland are obliged to appoint a tax rep- 32% over PLN 85,528 is declared the natural persons the term is twenty days follow- resentative. This obligation does not concern enti- the tax credit amounts PLN 556.02 ing the month in which the tax obligation arose. ties from any EU member state, however they may - capital company income, optionally appoint the tax representative. - share in capital companies profits, i.e. dividends (withholding tax), III.2.2.2. Value Added Tax Entities that perform activities mentioned in the 19% - interests, ‘Subject of taxation’ are obliged to register as an - business activity (self-employed) – after the declaration of active VAT payer before undertaking the first tax- the linear taxation. The Value Added Tax Act (hereinafter referred to as able activity. From the first activity they have to is- ‘VAT‘) uses the following terms: sue invoices with the proper VAT rate, according to non-residents’ income due to licence dues special regulations. 20% (withholding tax) and intangible services ■ output tax – when resulting from a sale, a salesman is obliged to show an invoice and to pay to There is the possibility of not registering for VAT if - some incomes: the bank account of a tax office, an entity foresees that the volume of a total an- - donations, exemption ■ input tax – a tax that a buyer of goods or services nual turnover will be lower than 150,000 PLN. In - incomes of some entities. has to pay to a salesman, but has a possibility to this case, an entity is not obliged to tax its turnover,

100 101 Taxes Taxes

however is also not eligible to deduct input tax from count of a tax office within a time limit set forth III.2.2.3. practice is still important and is recognised as binding purchases. for tax declarations. In case of a surplus of input tax and valid (i.e. the technical and procedural aspects). the taxpayer can apply for VAT returns on his bank Tax on civil law transaction An intra-community acquisition and delivery are al- account or assign it to the next settlement period. The import of goods, such as raw materials from a lowed only for entities that are registered as an EU In case of an import of goods VAT showed in a non-EU country into the EU and eventually to Polish VAT payer. customs declaration should be paid within 10 days With respect to a business activity, the following trans- territory, creates an obligation to pay customs and VAT from the date of customs clearance. There are some actions amongst others are taxed with tax on civil law: in the country of customs clearance or country of des- Consignment stock possibilities to save the VAT obligation in case of the tination for supply. The procedure depends on obliga- import of equipment or factory facilities. Tax on civil law transactions should be paid within tions of the supplier and delivery procedure. A consignment stock is a warehouse where raw ma- 14 days from the date of a transaction. terials moved by a supplier – who is a VAT payer in VAT return from tax office Excise tax another EU state than Poland – from its warehouse Activity Tax rate in another EU state than Poland are stored. The con- VAT may be recovered by two methods – indirect The act of Excise Tax regulates production and trad- signment stock is located in Poland and managed and direct. - loans granted by a ing of of excise-duty goods such as: electrical prod- by a Polish VAT payer. shareholder of partnerships ucts, electricity, alcohol, tobacco products (includ- The indirect return of input tax is the most common - contribution to a new 0.5% ing dried tobacco), motor fuel, heating oil and gas This procedure is a simplification that allows sup- method for companies which have monthly sales company and capital and passenger cars. pliers not to register for VAT in Poland, because all and expenses on a constant level. A VAT payer may increase formalities connected with taxation and tax reports recover the input tax via deduction from output tax. Taxable person: are completed by a Polish VAT payer. The direct tax return means the refund of VAT by - loans granted by shareholder exemption money transfer from the tax office in the amount of capital companies ■ a legal person, Obligations VAT paid during the purchasing process. This meth- ■ an organisational entity without corporate per- od is common for the start-up phase, like industri- - donations sonality, 2% A VAT payer has an obligation to submit a monthly alisation or purchasing of assets, when input VAT is - sale of a property ■ individuals that carry out transactions taxed by tax declaration until the 25th day of the month fol- accumulated. The return of VAT is generally made excise tax. - sales of some financial rights, lowing the month in which the VAT obligation arose within 60 days under the condition that Tax Office 1% or, in the case of ‘small’ VAT payers, before the 25th will not suspend this period because of control in a including shares Subject to taxation: day of the month following the quarter in which the VAT payer company. The VAT act also governs the VAT obligation arose. In a VAT-declaration, a VAT shorter term of 25 days for refund, but only under ■ production of excise-duty goods, payer has to show the difference between output certain conditions. All the above mentioned dead- ■ taking out excise-duty goods from a tax ware- tax resulting from sales, and input tax resulting from lines may be easily extended by the tax office during III.2.2.4. house, purchases. In case of a surplus of output tax, a VAT the tax control. ■ sale of excise-duty goods in Poland, payer is obliged to pay this surplus to a bank ac- Custom and excise tax ■ import of excise-duty goods, ■ intra-community acquisition of excise-duty goods. Custom Tax Tax rates are expressed as percentage of the value Since 1 May 2004, Polish territory became part of of goods or on a volume basis (fixed rate per prod- Tax rates the Customs Union, a fact which caused significant uct unit). changes in customs clearance regarding import and Activity Tax rate export goods to and from Polish territory. Any existing customs barriers between Poland and EU member III.2.2.5. Duty-free zones all besides below mentioned 23% states disappeared. The transfer of goods between the EU member states is realised by intra-community some goods and services specified in the Act 5% and 8% acquisition and supply of goods as well as services. A duty-free zone (DFZ) is a separate entity not in- Additionally on 1 January 2008 Poland joined the habited as part of a larger customs area, which is - export of goods Schengen zone, which resulted in the abolition of treated as a foreign territory and for which a uni- - intra-community delivery of goods 0% border check points between Poland and its EU neigh- form customs system applies. All entries and exits - international transport bour countries. within DFZ are under customs supervision.

- some used goods The transfer of goods between Poland and non-EU The advantage of a DFZ is that foreign merchan- exempted - financial services countries is still governed by the Customs Code and dise (other than from EU or EEA) brought in are sold is classified as import-export. All regulations related to without import duties, excise tax and VAT. customs clearance, customs rates and obligations are governed on the EU level, although the local country

102 103 Taxes Taxes

The duty-free zones in Poland are located on the from EU or EEA) may be stored, manipulated or un- ■ non-arable lands, ecological arable lands, exclud- all its income is taxed in this country regardless of main communication routes (airports, harbours, dergo manufacturing operations without payment ing used for business activity the country generating it), border crossings): or duty under bond and in the joint custody of the ■ an individual. importer, or his agent, and the customs officers. It Vehicle tax: Map of duty – free zones in Poland may be established and managed by the state or by According to the Polish Personal Income Tax Act, all private enterprise. In the latter case a customs bond ■ historical vehicles individuals are liable to tax their income by PIT, but must be posted with the government. ■ as a reciprocity rule – vehicles possessed by for- depending on their residence status, the tax liabil- Gdynia eign embassies, consulates and other missions, ity can be unlimited and limited. The first of these Świnoujście Gdañsk The main advantage of a customs bonded ware- that use diplomatic privileges and immunity upon refers to the worldwide income of a resident – an Szczecin house is that all payments connected with a goods acts, agreements or customs individual who has his centre of economic or vital Bydgoszcz import (import duties, excise tax and VAT) are post- interest in Poland or stays in Poland for longer than Warszawa poned until the moment of their withdrawal for Forest tax: 183 days in a calendar year. The second concerns consumption within Poland. a non-resident’s income that arose or was sourced Poznañ Mszczonów ■ forests with woods no older than 40 years in Poland. £ódź ■ forests registered individually in the register of his- Wroc³aw III.2.2.7. Local taxes torical monuments Subject of taxation

Gliwice Agricultural tax: Polish regulations define a lot of income sources. As Rzeszów Kraków Tax rates or exemptions in the property tax and ■ arable lands of the lowest quality a rule, profit from each source is calculated sepa- vehicle tax are determined by a commune council, ■ lands for a new farm up to the area of 100 hec- rately. Profit is an amount of surplus between rev- but they cannot be higher than limits given by the tares – on certain conditions enues and tax-deductible costs, received in a fiscal legislator. year. If the amount of tax-deductible costs exceeds the amount of income, the difference is a loss. If a Source: JP Weber, 2013 Examples of exemptions established by the legislator: III.2.2.8. Stamp duty taxpayer incurs a loss, he can reduce the profit in next following five years by the amount of this loss, Property tax: but the reduction cannot be higher than 50% of III.2.2.6. Stamp duty is collected from state administration the loss in one year. It does not apply to loss pay- ■ real estate used by associations to conduct a stat- agencies’ activities that are specified in regulations, i.e.: able on disposal of items, properties and rights con- Customs bonded warehouse utory activity among children and youth nected to properties. ■ lands and buildings registered individually in the ■ registration for VAT: PLN 170.00, The Polish legislator excluded some income and A customs bonded warehouse is a building or other register of historical monuments – on certain con- ■ giving a power of attorney: PLN 17.00, costs from the taxation subject; therefore they secured area in which dutiable goods (other than ditions ■ certificate that an entity has no overdue taxli- cannot be taken into consideration by calculating abilities: PLN 21.00. the profit. Additionally, in some cases regulations For the entrepreneurs, the most important local taxes are: of double treaties, of which Poland is part, can change the status of an individual, and therefore the country of taxation of some income sources, Kind of tax Scope Tax base III.2.3. Taxation or reduce tax rates, e.g. for dividends, interests or - land used for business activity purposes, licence dues. - building or its parts, - for land and buildings – area, Property tax of individuals - structure or its parts used to conduct a - for structures – value. The definition of revenues includes, among others, business activity. due revenues, even if they are not received, excluding payments in advance, and free and partially free - lorries over 3.5 tons, - admissible total weight of a benefits. Vehicle tax - trailers, vehicle for lorries and trailers, III.2.3.1. Personal Income Tax - buses. - number of seats – for buses. The deductible costs for people who do not run a business activity are strictly defined in the Act, e.g. - number of hectares resulting from the register Forest tax - activity conducted with using a forest. Entity of taxation: of lands and buildings. ■ 50% of income for activities related to exploiting - for farms – amount of hectares taken for ■ individual (natural person) that is a partner in a copyrights, however the total tax deductible costs - arable land, calculation purposes, depending on a quality limited partnership or registered partnership, in the fiscal year cannot exceed the amount of Agricultural - aree- and bush-covered land on arable land, of a land, ■ a company without corporate personality that has PLN 42,764, tax - excluding lands used for business activity - for other lands – amount of hectares resulting its place of residence or board of directors in an- ■ the annual lump-sum cost, that in 2013 amounts other than agricultural. from the register of lands and buildings. other country (but only if according to the laws to PLN 1,335 for employees, of this country, it is treated as a legal person and ■ 20% of income for civil law agreements,

104 105 Taxes Taxes

■ social insurances, Individuals who receive any income from abroad are III.2.3.2. ■ expenses for rehabilitation purposes. obliged to calculate and pay monthly tax advances themselves. Inheritance and donation tax Obligations Tax rates The tax year for all individuals is the calendar year. Entity of taxation are individuals. During the year, income tax payers are obliged to Married couples and sole parents are entitled to tax pay a tax advance before the 20th day in the month their income individually or jointly, if certain condi- Subject of taxation following the month in which the tax obligation tions are met, excluding the case in which one of arose or, in the case of ‘small’ taxpayers, before them is taxed by the linear rate. Acquisition by individuals of ownership of items lo- the 20th day of the month following the quarter in The PIT Act allows a number of exemptions or lower cated in Poland or of property rights exercised in which the tax obligation arose. Additionally, a tax- tax rates for income/profit generated by non-resi- Poland due to: payer is obliged to submit an annual tax declaration dents in Poland. Therefore, a non-resident’s place of before April 30th following the year in which the tax residence and regulations of double tax treaties, of ■ inheritance, legacy, obligation arose. which Poland is a part, should be taken into consid- ■ donations, eration when settling the final tax rate. ■ the gratuitous cancellation of joint ownership. In the case of the remuneration of employees, an employer is obliged to calculate, deduct and pay the Tax base monthly tax advances to a competent tax office. Value after the deduction of debts and burdens calculated according to the condition of an item or a Income source Tax rate property right on the acquisition date and market prices on the tax obligation date. - employment contracts, - civil law agreements, Tax rate - 18% up to PLN 85,528 - activity performed personally (e.g. members of board of directors), - 32% over PLN 85,528 - business activity (self-employed) – unless the linear taxation is Depends on the personal relation of a receiver to a - the tax credit amounts PLN declared, person, from whose items or property rights were 556.02 - rental, acquired. As a rule, the further relation between - other. these, the higher the applicable tax rate. This ranges between 3% and 20%. The tax is calculated as - business activity (self-employed) – after the declaration of the the surplus in taxable base over the tax allowance linear taxation, - 19% amount, with the use of the above tax rates from - capital gains, interests. the scale.

- non-residents’ income due to licence dues (withholding tax) and The legislator foresees some exemption from inher- - 20% intangible services. itance and donation tax, e.g.:

- some income, ■ the acquisition of property or property rights by - return of business trip costs, like per diem, travel and the members of the closest family: spouse, suc- accommodation expenditures, cessor, ascendant, stepchild, siblings, stepfather, - expenses paid by an employer for education and enhancement of exempted stepmother and after fulfillment of additional qualifications of his employees, conditions otherwise the taxation in accordance - the value of some benefits paid by anemployer due to an with the general rules mentioned above, accommodation of employees. ■ the acquisition of a flat or a block of flats – for the amount of 110 m2, but only after the fulfilment of certain conditions, ■ the acquisition of an item or a property rights from one person during the last five years – up to total amount of PLN 9,637, depending on the personal relation between a receiver and the person from whom items or property rights were acquired.

106 107 III.3. Investment incentives

Business opportunities for Poland can be consid- Programmes. The three most important Operational ered attractive. Due to a solid base of economic Programmes are: Infrastructure and Environment, growth over the past years, Poland has not been Smart Growth and Knowledge, Education and De- hit by the global financial crisis in the same way like velopment. Furthermore, each region has its own other countries. There are multiple reasons for this, specific Regional Operational Programme. the most important of which is that Poland is still targeting a GDP growth for 2009 with a positive Financial support will be provided partly as invest- outlook for the upcoming years. ment aid and partly as other types of aid, among others: The banking sector is stable, the main indicators for FDI´s are excellent and local government investment ■ R&D activity grants, is at a high level. Furthermore, the structural funds ■ environmental grants, from the EU will underline this tendency and keep ■ training grants. the investment volume on a high or even increasing level. Investment support will be granted mainly in the form of the repayable financial instruments. Non- Public aid for FDI is ensured mainly through the legal repayable support in the form of grants will go to acts constituting the Special Economic Zones (SEZ). conducting R&D works, purchasing R&D equipment The opportunities are highly interesting for long- and to the most innovative investments (related to term direct investment. It is possible to combine R&D works implementation), which will enable different instruments of public aid, but this cannot generating new technologies, new products and exceed the admissible intensity of regional aid. services.

The following table illustrates operational programmes available in Poland (presented budget III.3.1. distribution may be modified as it is a subject of negotiation with European Commission):

EU structural funds Operational Programme - Infrastructure 2014−2020 and Environment (IaE OP) Considering needs regarding transport, the environment and other types of infrastructure, 35.75% of the total Structural Funds will be distributed for this From 2014 to 2020 Poland will gain EUR 72.9 bil- programme from sources of the European Regional lion of EU Structural Funds support. This sum will be Development Fund (ERDF) and the Cohesion Fund. increased owing to necessary domestic contribution The aim of IaE OP is to support an environmentally- from the Polish Government. Financial support will friendly, low-emission economy strengthening territo- be provided within the framework of Operational rial and social cohesion. Issues connected with bal-

108 109 Investment incentives Investment incentives

Name % of total funds Amount in EUR billions* The KED OP contains five priorities: of economic development, poorly developed, in- adequate transport infrastructure and insufficient OP Infrastructure and Environment 35.75 24.158 ■ effective public policies for labour market, econo- growth factors. my and education, OP Smart Growth 11.28 7.625 ■ higher education for economy and development, The outreach of the OP EP covers the areas of in- ■ young people on the labour market, tervention of other programmes but it differs in OP Knowledge, Education and Development 4.73 3.197 ■ social innovations and international cooperation, that its scope is restricted to selected areas which, ■ technical assistance. because of the scale of activities and the expected OP Eastern Poland 2.96 2.00 long-term results, may have a special impact on the OP Digital Poland 2.88 1.946 Operational Programme – Smart Growth (SG OP) development process. This programme is an additional element of support under the EU Structural OP Technical Assistance 0.84 0.570 Financed from the EFRD. Funds which will enhance the actions of other programmes in Eastern Poland. 16 Regional Operational Programmes 41.56 28.890 11.28% of the total of the EU Structural Funds is allocated to the SG OP. It is assumed that the high- The Objective of the Operational Programme East- 100.00 67.585 est performance value indicators will be reached ern Poland is increasing competitiveness and inno- under this programme. The focus of the SG OP is vativeness of in Eastern Poland macroregion. The * Total presented budget amounts to EUR 67.585 billion (not to EUR 72.9 billion) as budget distribution between programmes to increase the number of innovations by increas- main objective of the programme will be achieved is still a subject to negotiations. ing R&D outlays, development of R&D institutions, through the implementation of specific objectives, development of cooperation between the science namely: and business, as well as diversifying entrepreneurship potential. The investment should be responsive ■ supporting innovativeness and R&D, anced development will also have a major importance Operational Programme - Knowledge, Education to the needs of the EU Single Market. ■ supporting competitiveness of enterprises, espe- due to the following streams of investment in the and Development (KED OP) cially in the area of internationalization, energy sector. The necessary investment in the diversi- The programme supports innovation at a national ■ increasing effectiveness of provincial cities and fication of traditional energy sources is to be achieved Financed from the European Social Fund (ESF). level. Innovation at local or regional levels is sup- their functional areas transport systems, using market mechanisms, investing in renewable ported and promoted through the Regional Op- ■ increasing inner cohesion of the macroregion. energy, reducing demand for energy and otherwise In the view of the scale of social problems, 4.73% of erational Programmes. The main goal of the Smart environmentally friendly projects. Investments of key the EU Structural Funds is being allocated to the im- Growth Operational Programme is the develop- The OP EP contains five priorities: supra-regional importance concerning the social infra- plementation of projects which will be co-financed ment of the Polish economy based on innovative structure (health care, culture and higher education) by the European Social Fund. A substantial part of enterprises. The programme’s detailed objectives in- ■ innovative Eastern Poland, will be complementary to these areas. The expected these funds under that programme is focused on clude: increasing the innovativeness of enterprises, ■ entrepreneurial Eastern Poland, value of these indicators of expenditure on the imple- the implementation of the EUROPA 2020 goals. enhancing the competitiveness of Polish science, ■ modern transport infrastructure, mentation of the EUROPA 2020 goals will be reached The programme is concentrated on the following creating better, sustainable jobs and increasing the ■ supra-regional rail infrastructure, by concentrating the EU funding on the activities for areas: employment, education, social inclusion, use of ICT in the economy. ■ technical assistance. the conformity of the national transport system with development of the mobility and adaptability of the European system, mainly the development of the workers and enterprises as well as issues connected The SG OP contains three priorities: Operational Programme – Digital Poland (OP DP) transport infrastructure of transnational outreach with with the development of human resources in rural respect to the principles of balanced development. areas. It creates an efficient and effective public ■ increasing the R&D potential for the development The Operational Programme Digital Poland (OP DP) administration at all levels, implementing a good of Poland, is financed from the European Regional Develop- The IaE OP contains eight priorities: governance principle and health promotion in hu- ■ increasing the scientific-innovative potential of ment Fund. OP DP focuses mainly on the implemen- man resources. The overall goal of the programme Polish companies, tation of smart growth priority. 2.88% of the struc- ■ promotion of renewable energy sources and en- is to optimize Poland’s human resources potential ■ technical assistance.. tural measures will be dedicated to ICT projects, ergy efficiency, through increasing employment, the adaptability of broadband networks and e-services. OP DP also ■ environment protection, including climate change the enterprises and employees, raising the level of Operational Programme – Eastern Poland (OP EP) contributes to achieving the objectives of the Digi- adaptation, education in society, reducing areas of social exclu- tal Agenda for Europe, which is one of the seven ■ development of environmentally-friendly and signifi- sion and supporting the development of the state’s The Operational Programme Eastern Poland (OP “flagship initiatives” of the Europe 2020 Strategy. cant on a European scale transport infrastructure, administrative structures. EP) is financed from the ERDF. The reason for the The programme is intended for administration of- ■ increasing the availability of European transport continuation of this programme is the lack of com- fices and their units, as well as telecommunications network, The combination of all areas supported by the ESF petitiveness and innovativeness of the five most dis- operators. OP DP will support public administration ■ development of energy security infrastructure, and resources are concentrated on one central pro- advantaged regions: Lubelskie, Podkarpackie, Pod- especially in provision of public e-services. ■ protection and development of cultural heritage, gramme and on regional operational programmes, laskie, Świętokrzyskie and Warmińsko-Mazurskie. ■ strengthening strategic health care infrastructure, resulting from the need to ensure a consistent system These voivodships are characterised by: low work In accordance with the strategic documents, OP DP ■ technical assistance. for the implementation of ESF in Poland. productivity, low living standards, a low dynamic should provide support in three areas:

110 111 Investment incentives Investment incentives

■ universal access to broadband Internet, ■ an analysis of requirements to be met by the ben- economic and social cohesion. In order to operate investors). CIT exemption is provided only for profits ■ content and services available through the net- eficiary and the project (whether it would be eligi- within an SEZ and benefit from the aforementioned earned from activities conducted within an SEZ. work, ble for co-financing or not), exemption, the investor must obtain a special per- ■ digital competence development. ■ an analysis of the technical and financial aspects mit which is issued by SEZ authorities. In the SEZ permit, the investor must provide invest- of the project. ment outlays, the intended level of employment, the Regional Operational Programmes Special Economic Zones in Poland date of commencing business and the deadlines for Regardless the type of a programme, one has to fulfilling all obligations mentioned in the permit, which For the Regional Operational Programmes 41.56% take the following facts into consideration: is usually valid by the end of a given SEZ’s existence. of EU Structural Funds for the 2014-2020 Perspec- tive have been allocated. ■ the financing authority will not assign any funds Sopot It takes between three and four months to complete S³upsk Suwa³ki until it is presented with a coherent, logical and Olsztyn all the requirements needed to obtain the SEZ permit The justification for the preparation of the 16 ROPs complete project, and to start business activity entitled to CIT exemp- is the decentralisation of the programming of re- ■ development of a project requires considerable tion. The SEZ management collects an annual fee for gional development, an increased effectiveness of expenditure of time and money, Kostrzyn administrating the SEZ. the provision of development activities by the public ■ not all projects will be granted support (failure to administration, the strengthening of the civil and meet the criteria or comply with the procedures Legnica £ódź self-government dimensions, as well as the effective will result in project rejection), Kamienna Góra Starachowice use of structural measures for the period of 2007- ■ the project must be addressed to a clearly speci- Wa³brzych III.3.3. 2013 by regions under the Regional Operational fied group of beneficiaries and respond to docu- Katowice Tarnobrzeg Programmes. mented needs, Mielec System of financial ■ the project must be in line with the beneficiary’s The objectives of the ROPs are on the one hand set statutory objectives and individual strategy, by voivodships in compliance with regional devel- ■ the project should contain a detailed timetable of support for opment strategies, while on the other hand they actions - a cost estimate, as well as a system of are also compliant with the goals of EUROPA 2020 promotion, monitoring and evaluation, Source: PAIiIZ, 2013 investment projects strategy. All ROPs have a similar structure, but their ■ the project costs must be fairly calculated, based contents and financial resources are specified at the on the actual costs incurred, with the account be- The map above shows the main headquarters of important for national regional level. The need to harmonise the list of ing removed from any unexpected circumstances, each of the 14 SEZs (source PAIiIZ). In addition to activities implemented under regional programmes ■ a beneficiary should ensure the sustainability of these, there are many subzones to help the investor resulting from a number of premises, of which the a project for a minimum of five years, or, in the place their project in the most suitable location. The economy most important is to ensure the consistency be- case of SMEs (small and medium enterprises), a combined area of all the SEZs is currently exceeding tween the regional approach and goals and priori- minimum of three years following the project’s 15.000 ha, although the total area of the SEZs can- ties of the national and European strategies, as well completion. not exceed 20,000 ha. as taking into account activities concerning state aid A governmental system of financial support for infor the SMEs sector (uniform criteria for the grant- The conditions for conducting business within an vestment projects considered important for the na- ing of aid are laid down at the national level). SEZ are as follows: tional economy, was passed by the Council of Min- III.3.2. ■ investment expenditure should amount to at least isters in July 2011 and provides earmarked subsidies General rules for project development EUR 100,000, for new investment projects from the state budget. ■ the entrepreneur’s own share should be at least Before applying for EU Structural Funds the follow- Incentives in Special 25%, This subsidy is granted on the basis of an agreeing key issues should be defined: ■ investment must be maintained for at least five ment between the investor and the Minister of Economic Zones years from the investment completion date (three Economy. Before the agreement is signed each ■ the project’s objective, years for SME), investment udergoes an assesment process on the ■ the expected effect and benefits to be derived ■ newly created workplaces must be maintained basis of defined criteria. The cash grant subsidy from the project, for at least five years from the employment date may not be combined with other forms of support ■ the starting and closing date of the project, as well A Special Economic Zone (SEZ) is a particular area (three years for SME). engaging public aid, such as SEZ exemtions or EU as the duration of each project stage, defined by the legal acts issued by the Ministry of Grants unless additional criteria are met. ■ the project’s implementation path, Economy for each SEZ. Such areas are specially ear- Investment sites located currently outside of a SEZ ■ the people involved in the project, marked with local infrastructure support, in which area may be incorporated into a SEZ under certain The investment has to be maintained for at least 5 ■ the costs involved, business activity can be conducted on preferential conditions. The incorporation process lasts from 6 to 9 years from the date of its completion (3 years in the ■ the limitations and threats to project implementa- terms (corporate income tax exemption). The pri- months and is started after an interested enterpreneur case of SMEs), and each newly created job has to be tion, mary objective of providing public aid within an submits an application to the relevant SEZ. CIT ex- maintained for a period of at least 5 years from the ■ an analysis of financial sources, SEZ is to assist in the reduction of development emption can be utilised by the timeline of permission date of its creation (3 years in case of SMEs). disparities between regions, thereby strengthening or given SEZ’s existence (currently 2026 for the new

112 113 Investment incentives Investment incentives

This kind of support constitutes ‘ad hoc state aid’ The regional state aid in this form is related to the trepreneur for the equipment or retrofitting newly (aid not granted within any scheme previously ac- III.3.4. Real estate tax new investment or new workplaces (created as the created workplace for its targeted unemployed. cepted by the European Commission). All state aid consequence of the new investment). Refund concerns all or partial costs of creating a has to be notified to the Commission as regional exemption new workplace (including costs of suitable assets, investment aid pursuant to Article 87 (3) (a) of the equipment, license, programs etc.) for up to 6 - ECT. Approval from the European Commission is re- times the average wage per one workplace creat- quired (obligation of notification); hence no aid may III.3.5. Labour market ed. It has to be noted, that previously unemployed be paid out before obtaining such approval. Real Estate Tax Exemption is a form of regional person has to be employed on the newly created state aid. It is available in Communes which have workplace for a period of minimum 24 months. The system focuses on supporting foreign direct adopted resolutions concerning the possibility of instruments investment in sectors “of particular importance to exemption from real estate tax. 4. On the job training - Based on this program, the the national economy,” which include: employer may apply for a job training organisation, The maximum tax rates for entrepreneurs in 2014, In order to hire unemployed people companies in which Labour Office delegates a person to on ■ automotive, for the subject of taxation in real estate tax and may approach the local Labour Office, which can the job training, without the employer having to ■ aviation, related to business activity, are: 23.03 PLN/m2 for support entrepreneurs using various labour market conclude an employment contract with this per- ■ biotechnology, buildings, 0.89 PLN/m2 for land and 2% of the ini- instruments. Main forms of assistance include fol- son. However, the employer has to enter into an ■ IT and electronics, tial value for the structures. lowing measures: agreement with the prefect of the district. Such a ■ business process outsourcing, work experience lasts for a period of minimum 3 ■ research and development. In each commune, the tax rates are set by local au- 1. Assistance in the process of recruiting employees months up to 12 months maximum. While filling thorities, however they cannot exceed the maximal with required qualifications - The assistance can an application form, the employer may indicate the Grants will be awarded by the Ministry of Economy, amounts as set forth above. be given on various levels. Initially, Labour Office exact person whom he wishes to have trained. The and will be payable in annual tranches for up to five collects and disseminates job advertisements. Af- selected person is not being paid by the employer, years. terwards, it provides entrepreneurs with informa- yet receives a scholarship from the prefect of the tion about potential candidates. Subsequently, La- district. Consecutively to the end of the training Support for new investment (investment grant) bour Office organises meetings of employers and period, the employer is free to enter into an em- unemployed who fulfill designed requirements. ployment agreement with selected candidates. Eligible costs of the Moreover, Labour Office organises various events, Amount of aid Sector New jobs new investment in which both - unemployed and employees are 5. Financial support for training programmes for (% of eligible costs) (m PLN) free to participate, such as career expo or labour all potential employees who may acquire new exchanges. Assistance in the process of recruit- qualifications or vocational skills through practical priority sectors 50 160 2 - 12,5 ment is also carried out by career consulting ser- work performance at a given post. vices, which are provided in order to define the 200 750 2 - 12,5 significant investment in other sectors profile of candidates or job advertisements. What 6. The reimbursement of social security contribu- 500 500 2 - 12,5 needs to be pointed out, is that Labour Office is tions in case of the employment of an unem- usually being informed about the current situa- ployed person delegated by the Labour Office. R&D 35 500 up to 10 tion on the local labour market, as well as about The reimbursement of social security contribu- planned changes to the local labour market. tions up to 300% of the minimum monthly salary in Poland is based on the contract concluded be- 2. Intervention works - This kind of program provides tween the prefect and the employer. The amount Support for creation of new job places (employment grant) subsidised jobs to unemployed people based on can be reimbursed only after the fulfilment of an agreement between the Labour Office and an two conditions: that the person delegated by the Eligible costs of the Amount of aid per employer. The program is targeted at unemployed Labour Office is employed in a full-time position Sector New jobs new investment one job (PLN) people who are in particularly difficult situation within the next 12 months and that the employee (m PLN) on the labour market. Labour Office reimburses is still employed after this time. wage costs of people hired under such a program 7. Vocational training of adults - is an instrument of automotive, electronics, aviation, 250 40 to employers. The duration of this scheme and the mobilisation in the form of (a) a practical train- biotechnology amount reimbursed depends on the target group. ing lasting from 12 up to 18 months or (b) ap- Depending on the decision of the district Labor prenticeship training which lasts from 3 to 6 modern services 250 1.5 from 3 200 to 15 Office, intervention works can take up to 6, 12, months. Trainings are carried out without having 600 (~EUR 800 - R&D 35 1.5 18, 24 months or even up to 4 years. to conclude an employment contract with the EUR 3900) employer, on the basis of an agreement between 200 750 3. Refund of costs incurred for preparations of new the employer and the prefect. Training is based on significant investment in other sectors workplace for an unemployed person - Labour a program involving acquisition of practical skills 500 500 Office may reimburse the costs incurred by an en- and theoretical knowledge, and it ends with an

114 115 Investment incentives

exam. Employers interested in creating a place of more than one country and so linked that they might adult vocational training shall file a motion in the coordinate their operations in various ways. relevant Labor Office. The employer may receive reimbursement of expenses incurred for each par- The guidelines cover business ethics on employment, ticipant in the amount specified in the contract, human rights, the environment, information disclo- up to a maximum of 2% of the average salary sure, combating bribery, consumer interests, science for each full month of the program. Moreover, and technology as well as competition and taxation. the employer may be granted a one-time bonus for each full month of adult vocational training According to the OECD Council, each adher- of each participant if that person completes the ing country must set up a National Contact Point program with a successfully passed exam. (NCP). The NCP is an entity responsible for the promotion of the guidelines on a national level. An 8. It should be noted, that Labour Office also offers NCP handles all enquiries and matters related to the a specific support for employers of people with guidelines in that specific country, including inves- disabilities, such as: reimbursement of costs of tigating complaints about a company operating in, hiring a disabled person, reimbursement of costs or whose headquarters are based in that country. of training disabled employees, reimbursement The Polish OECD NCP is located at the Polish In- of workplace equipment developed for disabled, formation and Foreign Investment Agency (Polska reimbursement of costs incurred for adaptation Agencja Informacji i Inwestycji Zagranicznych S.A). of buildings and equipment, as well as for special purchase of equipment and software. The guidelines contain, among other things, the following rules: Entrepreneurs interested in gaining support from labour authorities should contact the right Labour ■ enterprises should respect the rights of their em- Office, prepare and submit application required, as ployees to be represented by trade unions and well as appropriate and documentation, depending other bona fide representatives of employees, on the type of support required. and engage in constructive negotiations, either individually or through employers’ associations, with such representatives with a view to reaching agreements on employment conditions, ■ enterprises should, within the framework of laws, III.3.6. regulations and administrative practices in the countries in which they operate, and in considera- OECD guidelines tion of relevant international agreements, principles, objectives, and standards, take due account for multinational of the need to protect the environment, public health and safety, and generally to conduct their enterprises activities in a manner contributing to the wider goal of sustainable development, ■ enterprises should not directly or indirectly offer, promise, give or demand a bribe or other undue OECD Guidelines for Multinational Enterprises are advantage to obtain or retain business or other annex to the OECD Declaration on International In- improper advantage, vestment and Multinational Enterprises. They contain ■ when dealing with consumers, enterprises should recommendations, providing voluntary principles and act in accordance with fair business, marketing standards for responsible business conduct for multi- and advertising practices and should take all rea- national corporations operating in or from countries sonable steps to ensure the safety and quality of adhered to in the declaration. The guidelines are le- the goods or services they provide. gally non-binding. The business community, labour representatives and non-governmental organisations were all engaged in the developing of these guidelines. A definition of multinational enterprises usually Thespian, comprises companies or other entities established in Wrocław

116 III.4. Accounting & Finance

III.4.1. In situations which are not regulated by the Ac- Accounting and counting Law, proper standards can be used. Also there is an allowance, for a specified group of financial regulations companies, to do so according to International Fi- nancial Reporting Standards. Companies listed on the Warsaw Stock Exchange are obliged to prepare consolidated financial statements in accordance The Polish accounting regulations are very similar with International Financial Reporting Standards. to other systems and are constantly being synchro- Furthermore, the subsidiaries of such companies nised with the International Accounting Standards may choose financial statements in accordance with and EU regulations, to make them comparable. EU and International Financial Reporting Standards if they prefer. Law Regulations Accounting facts Polish accountancy law is constituted by the Ac- countancy Act of 29 September 1994 and the Accounting records must be maintained in both the Polish Generally Accepted Accounting Principles – Polish language and currency. Amounts denominat- GAAP (which so far constitutes seven standards). ed in foreign currencies are converted into Polish at The provisions of the Accounting Law apply to the the average exchange rate set by the National Bank entities whose registered offices or place of execu- of Poland. In general, all accounting documents tive management are located in Poland. The Act should be in Polish apart from source documents, enumerates foreign people, foreign companies though it should be remembered that these should operating through branch offices or registered sub- be translated into Polish at the behest of the tax sidiaries, obliging them to maintain full accounting authorities and auditors. records in compliance with Polish law. The accounting period lasts 12 months, and is usu- The Accounting Act does not differ considerably ally the same as a full calendar year. Of course, the from International Financial Reporting Standards, company may choose different dates, but the Tax which were adopted by the EU and are harmonised Authorities must be informed about this change. with regulations resulting from EU Directives. The Bookkeeping can be done internally by a qualified amendment dated March 2008 implemented regu- employee or externally by an accounting office. lations from the 2006/46/WE EU Directive. Among Documents and accounting books must be kept in others, it is concerned with consolidating financial the company’s head office, as well as in an account- statements and extends to a scope of obligatory dis- ing office. Documents for each year must be kept closures presented in statements. It also introduced for five years, payroll documentations for longer pe- to the management of the entities the responsibility riod and financial statements permanently. to prepare and publish their financial results.

118 119 Accounting & Finance Accounting & Finance

The responsibility for fulfilling these obligations in cial statements and notes and explanations. Entities correct, and whether they give a true, fair repre- the field of accounting falls entirely on the Manager which are a subject to annual audits also prepare a sentation of the property, financial position and the of a company. The scope of this responsibility was statement of changes in equities and a cash flow financial result of the audited entity. extended and emphasised in the implemented regu- statement. For financial statements, an annual relations of the 2006/46/WE EU Directive. port of company activity should be included. The Some entities that maintain their accounting re- report covers information about events having sig- cords and undergo a mandatory audit of annual Entities are required to apply all accounting princi- nificant influence on company’s activity, and also financial statements are required to publish their ples included in the Accounting Law, to truly and presents the company’s achievements and projec- financial statements. fairly present their financial position and financial tions. All documents must be prepared in both the results. The economic substance of transaction is Polish language and currency. Polish accounting Law is often changing, due to a base for recognising events, including business the application of solutions from the International transactions, in the books of accounts and a pres- The entity’s manager ensures the preparation of the Financial Reporting Standards and EU accounting entation in the financial statements. The company financial statements within three months from the regulations. can apply some simplifications within its accounting date of the balance sheet, as well as its presentation principles, provided that it has no significant nega- to the relevant authorities. The aim of the implementation of these interna- tive impact on the presentation of their financial tional regulations is to equalise the competitiveness position and its financial results. The approval of the statements shall take place of enterprises. The harmonisation of accounting within six months after the date of the balance regulations will have an effect on increasing the sheet. quality and comparability of information given by the companies. It also effects the improvement in III.4.2. the reliability of financial data in front of business partners and financial institutions. Financial statements III.4.3. Audit and publication

Entities shall prepare the financial statement on the last day of the financial year referred to in article 12, paragraph 2 of the Accounting Law. Principles for The obligation of auditing and the publishing of the measurement of assets, liabilities and equity and the financial statement refers to consolidated state- the determination of the financial result should be ments of capital groups, joint stock companies, applied respectively as specified in chapter 4 of the banks, insurers and entities which operate on the Accounting Law. basis of regulation on trading in securities and regulations on investment funds or pension funds. Issuers of securities admitted to or intending to file for admission to or issuers of securities pending ad- Other companies are obliged to be audited if they mission to trading in one of the regulated markets have met at least two or three of the following con- of the European Economic Area may prepare their ditions during or preceding the accounting year: financial statements in accordance with Internation- al Financial Reporting Standards. ■ the average number of employees converted into full-time employment is equivalent to at least 50 Another group of companies allowed to use the people, International Financial Reporting Standards regu- ■ the total assets as at the end of the financial lations are entities which are members of capital year were at least the Polish zloty equivalent of groups, in which a parent company prepares con- 2.5 million EUR, solidated financial statements under International ■ the net revenue from the sales of goods for resale Financial Reporting Standards. and finished goods and the financial transactions for the financial year was at least the Polish zloty These decisions can be made only by the approving equivalent of 5 million EUR. body of such companies. The aim of the audit is expression by a statutory Financial statements consist of a balance sheet, a auditor with a written opinion. The audit contains profit and loss account, an introduction to the finan- a report on whether the financial statements are

120 121 III.5. Employment Legislation

The Labour Code lists various forms of employment III.5.1. contract:

Employment of ■ for a probation period - This kind of contract may be concluded only once between a given workers employee and employer. Its purpose is to check the employee’s suitability to perform duties for an extended period of time. The trial period shall not exceed three months, Every investor who wishes to start and develop their ■ for a fixed period - This kind of contract is defined business activity in Poland must take into account by a specified date. The applicable law does not the employment of workers. Polish law describes regulate the maximum duration of such an agree- and regulates various possibilities of employment. ment, but terms of the contract should be reason- The main legal form of employment is the employ- able. However, there is a limit to the number of ment relationship regulated by the Polish Labour such contracts which can be concluded with one Code from 26 June 1974. The employment rela- employee. In accordance with Polish law, a per- tionship is connected with the system of guaran- manent employment contract must follow after tees and rights of employees. In accordance with two consecutive contracts for a fixed period, the Labour Code the employee has a right to: ■ for an indefinite period, ■ for a period of absence of another employee (i.e. ■ receive the remuneration for his work, the finan- a replacement employment contract). cial conditions of which are defined in the employment agreement and the employer is obliged The employment contract must define parties, to pay it regularly to an employee. The employee stipulate working hours, financial conditions, type may not earn less than the minimum monthly re- of work and place of its performance. Moreover muneration which in 2013 is PLN 1,600.00 gross it should be concluded in writing. Asides from the for full-time work, employment contract, the employee should receive ■ use their holiday leave time - The employee has from the employer a written information concern- the right to an annual paid leave, the length of ing the employment within 7 days counting from which depends on their seniority, but in general the day when the work has started. The employee every employee is entitled to 20 or 26 days of paid is obliged to perform work in the hours specified in annual leave. The employee is not allowed to re- the contract, as well as to carry out the instructions nounce their leave and the employer is obliged to of their supervisors and act in the best interest of pay the equivalent to an employee for unused the employer. leave, ■ receive sickness allowance, Apart from the employment relationship regulated ■ working time rules, by the Labour Code, there are other forms of em- ■ special protection of some employees’ groups, ployment based on the Civil Code – known as civil ■ procedure of termination of employment. law contracts. These contracts give more latitude

122 123 Employment Legislation Employment Legislation

in formulating the content of legal relationship be- ate legal document which permits the worker to only if the premiums of employees, which supply contract concerning the provision of services, to tween the parties without any minimal guaranties stay in Poland. the system, are delivered in an amount sufficient which according to the Civil Code are applied reg- which result from the Labour Code. The parties may for the payment of present pensioners. Thanks to ulations about contractor contracts or individuals decide on such matters as the amount of remunera- Because quite the recent changes in applicable Pol- obligatory premiums of 12.22% of gross salary, who cooperate with these people, tion or working time because these factors are not ish regulations concerning legalisation of work and people acquire pensionable rights that aren’t in- ■ people on parental leave or who receive maternity regulated by the Civil Code. The most common con- residence of foreigners in Poland, the procedure herited. benefits. tracts under the Civil Code are as follows: connected with obtaining a work permit in Poland has been simplified. Various types of work permits ■ 2nd Pillar (OFE) – is also an obligatory element of Sickness insurance ■ Task contract – This kind of contract is also called were implemented but now there is no ‘promise’ the social security system, the capital fund. The as agreement of result. The employee receives to grant work permits anymore. A company which premiums, deducted from salaries, are written The social security system, obligatory sickness insur- defined tasks which must be carried out in or- is intending to employ a foreigner receives a work from the individual account of the insured person. ance concerns the following people: der to achieve specified results and the employer permit after submitting a complete application with Open pensionable funds belong to the 2nd pillar of is obliged to pay the salary for the realisation of the required documentation. With the work permit, the social insurance and are managed by private tasks according to the provisions stipulated in the the foreigner can receive a visa in order to perform investing firms (Public Pensionable Associations) ■ employees, contract. work or a permission to have temporary residence that invest premiums into financial markets. ■ members of agricultural production cooperatives in Poland. The last step is signing a contract be- and cooperatives of agricultural circles, ■ Service contract – Based on the contract, the em- tween the foreigner and the employer according ■ 3rd Pillar (IKE) – is a free capital pillar, which is or- ■ people who perform substitutionary services. ployee receives defined tasks and activities which to the conditions mentioned in the work permit. It ganised as an investing fund. The insured people must be realised by the employer. The employee should be noted that newly implemented law stipu- choose the insurance company (associations of Voluntary sickness insurance concerns the follow- performs the work by himself because there is no lates severe penalties for employing foreigners who the mutual insurance, insurance associations). ing people, covered by obligatory pension able and subordination or work performance under some- have not obtained indispensable permits. After reaching a pensionable age the pensioners rental insurance, on their own application: one’s management, which is characteristic of an (from 2013 the pensionable age is for women employment contract. born after 30.09.1973 65 years, for man born after 30.09.1953 67 years.) get pensions from ■ people who perform casual work, The contract expires automatically with the end of III.5.2. the Social Security Institution (ZUS) and the Open ■ people who perform the job on the base of agen- the term or when a given task or activity has been Pensionable Fund (OFE) through an Agent Com- tive contracts, contractor contracts or another completed. An employment agreement may be ter- pany, and the eventually payment from the free contract concerning providing services, which minated upon a mutual agreement of both parties Polish social 3rd pillar. according to the Civil Code apply to regulations (at any time and regardless of the type of contract), about contractor’s contracts or individuals who by one of the parties upon prior notice (at the end security system Obligatory social insurance contributions paid by cooperate with these people, of a specified notice period), or by one of the parties the employee and the employer ■ people running non-agricultural activities or indi- without prior notice (if a serious breach on the side viduals who cooperate with them. of the other party occurs or if employment cannot According to the Act from 13 October 1998 regard- be continued for certain reasons). The notice period Pillar I, II & III ing the social security system social insurance in Po- In general, the yearly base for social insurance in depends on the type of contract concluded by the land includes: the following calendar year can’t be higher than the parties and the actual duration of the employment. amount relative to 30 times the proposed average While choosing which agreement to conclude with In 1999 a reform of social insurance was carried ■ pensionable insurance, monthly salary in the national economy for the given an employee, the employer should bear in mind that out, which was based on the co-financing of premi- ■ rental insurance, calendar year. As of 2013, this is 111.390,00 PLN. a legal relationship in which there are elements of ums by the employer, the employee and three pil- ■ insurance in case of sickness leave or maternity the employment relationship can not be regulated lars – one repartition and two capital pillars. leave, known as sickness insurance, The employer spends 9.76% (financed by the em- by a civil law contract. ■ insurance in case of accidents at work and occu- ployer) of the gross salary on pensionable insur- The social security system in Poland is based on pational diseases, known as accident insurance. ance. The other contributions for the social security three pillars: institution (ZUS) regard the following insurance: In general (there are many exemptions in Polish law), According to above mentioned Act regarding the rental, sickness, accident, health insurance, Labour foreigners who are going to perform work in Poland ■ 1st Pillar (ZUS) – obligatory and common. Premi- social security system, obligatory pensionable and Fund and the EAG Fund. are obliged to obtain a work permit. The need to ums, deducted from salaries, are written from the rental insurance concerns physical people, who in obtain the work permit concerns non-EU citizens individual account of an insured person. The in- Poland are: Social security contributions (13.71%), income tax who are going to work in Poland as an employee. In stitution which manages the 1st pillar is the Social and health insurance are also deducted from the case of citizens of non-EU countries who are mem- Security Establishment. Pensions, received from ■ employees, gross salary. bers of the management board in legal entities in the 1st pillar, are based on the repartition system, ■ people running non-agricultural activity or people Poland, Polish law provides a simplification. Namely, which has the character of the generation con- cooperating with them, The employer must also pay part of any social secu- they are allowed to perform work in Poland for a tract. This means that payments of pensions are ■ people who perform casual work, rity contributions (16.93%-20.12%). period not exceeding 6 months, within 12 months financed from the contribution of the people who ■ people who perform a job on the basis of agen- without a work permit, after receiving an appropri- currently work. The system functions efficiently tive contracts, contractor contracts or another For example:

124 125 Employment Legislation

Gross salary Employee Employee Net Employer Total Income agreed in Social Health Care to be Social employer Tax contract Contribution Contribution paid Security cost

4,000.00 548.40 310.64 287.00 2,853.96 829.60 4,829.60

3,000.00 411.30 232.98 199.00 2,156.72 622.20 3,622.20

EU Regulation 1408/71 and 883/2004 that the employee of a Polish company might be delegated according to EU regulations only if just Since 1 May 2004, after Poland joined the European before this time they were liable to Polish social in- Union, regulations concerning the rules of liabil- surance for a period of at least one month. ity for social insurance (included in EU Regulation 1408/71) have become obligatory. According to EU The delegated employee (according to union regula- regulations, people moving across the European Un- tions) is a person who is sent by their employer to an- ion for the purpose of increased earnings are liable other EU country and a direct relationship between to legislation from only one of these countries. the two parties still exists.

The new EU regulations concerning the delegation It is also acceptable to hire an employee in order to of employees to work in other European countries delegate them. came into force on 1 May 2010. The delegation period can last up to 24 months. These are the following orders: no 987/2009 from The new regulations refer also to employees who 16 September 2009, which concerns the perfor- began a period of delegation before 1 May 2010. mance of the order (WE) no 883/2004 in the matter of coordinating systems of social protection, and no Decision A2 stipulated that the next period of del- 988/2009 from 16 September 2009 as well as no A2 egation cannot begin earlier than two months from from 12 June 2009 from the administrative board of the end of the previous period of delegation. social protection, which concerns the interpretation of article 12 of order no 883/2004. The document which confirms the delegation of employees is still undergoing a process of transition The general rule has remained, however, accord- from E101. This document will be replaced by the ing to which, employees are liable to social insur- A-1 form and, ultimately, by the A003 electronic ance only in the country in which their work was form by 2012. performed. According to the new rules, the right for paying col- There are a couple of exceptions to this rule which lections for an employee’s place of living depends anticipate insurance in the sending country, includ- on the performance of their work. If the person ing: keeping the relation between employer and works for two foreign employers, neither of which employee and not exceeding the maximum periods has a head office in their place of living, their place of delegation. of living will be adequate for paying collections.

The employer must operate their activity in Poland. It is very important that since 1 May 2010 any em- For this purpose, it is the object of the company’s ployees hired in two countries report this fact to the activities, such as the administration of the com- suitable jurisdiction for their place of living. The insti- pany, which is taken into consideration rather than tution will then be obliged to point out the appro- its internal activities. priate insurance system for this employee. Any temporary legislation passed on this matter will become Order no 987/2009 introduced a rule that an em- final two months from the date that the appropriate Municipal Office, ployee is liable to the legislation of the delegated institution was informed about the situation. country just before the delegation itself. This means Siechnice

126 I V. Doing Business - from Start-Up to performing a direct investment

128 129 IV.1. Greenfield & Brown- field investments

IV.1.1. Activities requiring licenses, concessions or permits

The general law stipulates that the undertaking and conducting of business activities is free. However, Pol- ish law also states some exceptions to this general rule. It means that the undertaking and conducting of certain activities is limited and requires the consent of the Polish authorities or entry into the register of regulated services. We can divide the above-mentioned activities into four main groups:

■ activities which may be undertaken and conducted freely, ■ activities which may be undertaken and conducted on the basis of a concession, ■ activities which may be undertaken and conducted on the basis of a license or permits, ■ activities which may be undertaken and conducted upon registration into the register of regulated activities.

Furthermore, Polish law states that certain professional services may be conducted only by people who have an appropriate certificate (e.g. tax advisors, lawyers, real estate, appraisals, architects, accountants or financial advisors).

To conduct certain types of activities (e.g. bank or insurance funds, pension funds) Polish law requires

130 131 Greenfield & Brownfield investments Greenfield & Brownfield investments

the establishment of a specified legal form (e.g. ■ tourism agencies, joint-stock company). ■ private investigation and detective services ■ conduction of business in special economic zones, Concessions ■ the operation of banks, insurance companies, brokerage agencies, investment funds or pension A concession is issued for a period of time between funds, five and 50 years and is stipulated for business ac- ■ wholesale trade and manufacturing of alcoholic tivities which have a significant importance for the beverages, casinos, lotteries and gambling. interests of the State (e.g. national security, public safety and major public interests). Registration for the register of regulated activities

Licenses and permits Such activities may be conducted when the entrepreneur fulfils their statutory requirements and Polish law also states other types of administrative upon registration into the register of regulated ac- decisions which are mandatory in order to under- tivities. Polish law states twenty types of regulated take and conduct business activity. When the entre- business activities. Below are some of the business preneur fulfils the statutory requirements stated by activities which require entry into the register of law, they may apply for an administrative decision regulated activities: (e.g. a permit or license). Polish law states that for almost thirty types of business activity you are re- ■ the archiving of employees and personal docu- quired to obtain a permit or license. Below you will mentation, find some of the business activities which require ■ storage enterprises, such administrative decisions: ■ telecommunication, ■ the manufacturing of alcoholic beverages, ■ national and international road transport (includ- ■ detective services, ing goods and passengers), ■ work agencies, ed the market from the creation of a Real Estate ■ forwarding agency, ■ the organising of horse races. IV.1.2. Real estate bubble, which has already been developing quite ■ railway stations, market strongly in the housing market. Poland is now going through a phase of consolidation but in a third wave we do expect the following The Polish real estate market has been strongly domi- market developments: Authorities responsible for issuing concessions nated in the past years by the outstanding position of the Polish capital Warsaw as the centre for major ■ more selective choice of attractive locations investment activities. In a second wave within the last (while new well located objects have lost within Activity requiring a concession Authority five years other cities as Wrocław, TriCity (Gdansk, the crisis from 7,5%–15% of the boom-value, the Gdynia, Sopot), Poznań, Katowice or Łódź have also price decrease of 2nd and 3rd choice locations will Searching, Exploration of minerals; underground developed a strong position. Not only have they exceed 20% or 25% due to higher vacancies and storage of substances and waste in rock masses Minister of Environment attracted Industrial, BPO- or logistics investments, more competition on the market), or in underground mines in addition they have become serious markets for ■ focus on investments and growth in less de- The manufacturing of and trading in explosives, international developers and investors, which have veloped Cities with 100.000–500.000 inhabit- ammunition, weapons and other items and invested in local commercial and housing projects. ants (Lublin, Rzeszów, Kielce, Białystok) – third Minister of Ministry of the Interior technology for military or law enforcement wave after Warszawa, and other top polish cities purpose The financial crisis, which limited or partly blocked (Poznań, Wrocław, Tri City (Gdańsk, Gdynia, So- access to financial sources led to a generalized pot), Kraków, Katowice, Łódź), Manufacturing, processing, storing, delivering, “high risk classification” of Poland within the CEE ■ the role of build quility will grow and become President of the Energy Regulatory Authority distributing and trading of fuels or energy countries on one level with Hungary, Ukraine or more crucial for the valuation of the real estate. the Baltic countries. After the first wave of panic, Security services for persons and property Minister of Ministry of the Interior international investors have stated that the Polish The polish market is becoming more mature and economy is stable. The European Commission ex- with limited access to financing it can now be con- President of the National Broadcasting Au- pects Poland to grow by 1,5% in 2013. This aspect sidered a “Buyers Market” which offers investors Radio and television broadcasting thority of stability is attracting new potential investors to the opportunity to verify some options longer than Poland. Nevertheless, the adjustment in the strong before during an uncontrolled “time to market” Air transportation President of the Civil Aviation Authority growth of real estate prices has probably prevent- acting.

132 133 Greenfield & Brownfield investments Greenfield & Brownfield investments

activities within the whole country. After this first have been analyzed exactly and the requirements investment wave like in other CEE Capitals, War- for professional facility management and equip- saw has become one of the most expensive office ment of buildings have risen significantly in order markets in the world. Presently the modern office to deliver the required quality. In order to close new 2 WIELKOPOLSKA stock reached almost 6 mln m , which 67% is locat- bigger rental contracts Rent free periods have been REGION WARSAW ed in Warsaw. Despite 9% vacancy rate, 1 mln m2 extended to attract bigger customers with more is under construction, where the majority will be than 1.000 m2 in rental area. delivered in Warsaw. CENTRAL DOLNOŚL¥SKIE POLAND REGION Source: Poland & Forecast Report 2013 Colliers International IV.1.2.3. Retail and

ŚL¥SKIE REGION Within the last years a wave of foreign BPO and commercial market specific local Investments with high quality requirements in towns like Krakow, Poznań or Wrocław have had a strong impact on the development of After Russia and the Ukraine, Poland is the biggest modern office space in these regions. These- mar consumer market in CEE and the biggest within the kets had been dominated previously by local office new EU accession countries. This fact was already supplies with low quality. This was unsuitable for clear in the beginning of the transition process and Major developers have established their projects in global players who invested in BPO or other ser- it is one of the reasons why the retail market is now 10-20 different locations. Rental costs for those mod- vices. Meanwhile, after a certain quality level was the most mature and developed real estate market ern-standard warehouses are between 2 – 5,5 EUR set, local Polish developers have entered the market in Europe. depending on location of warehouse and time of and created local brands for smaller and medium contracting. size offices, which are also accepted by foreign cus- From the beginning of the 90´s big French retail tomers. groups as Carrefour, Auchan, Géant and E.Leclerc IV.1.2.1. Warehouse Industrial factories are either developed in BTS had already started trading in Poland with big hy- (build-to-suit) solutions on a minimum of 7 - 10 Top 7 cities. Supply and asking prices - 2013 permarkets to meet the significant demands of the & industrial market years financial leasing-/rental- contracts or mainly population’s quickly growing market. Today´s mod- 2 built by industrial companies themselves. These Warsaw ern retail supply exceeds more than 9 mn m , with industrial companies invest directly in individual 12 27 50% share in total market and is again dominated The Development of modern warehouse space in locations because of specific location requirements Kraków 12 15 by Warsaw and the other remaining top 7 Cities. 2 Poland exceeded in 2012 more than 7mln m with (often high unemployment, high availability of Wroc³aw 11 16 vacancy rate 9%, which has been built mostly workers, closeness to customers / suppliers or raw The retail market already passed certain stages. The amongst the major industrial centers such as War- materials, etc.). Those peripheral locations are usu- Tricity 13 15 first basic satisfaction through the creation of big saw, Katowice or Poznań and among existing or ally chosen in order to keep investment and produc- Poznañ 14 16 hypermarkets and malls, the change of focus from planned Polish highways. Two famous logistics tion costs low and to achieve the highest possible £ódź 11 13 hyper- to supermarkets and the establishment of locations in Poland are Piotrków Trybunalski and level of workforce availability. A well developed pe- discount markets mostly in rural regions in order Stryków (next to Łódź), which profit from their ripheral plot offered by a local municipality or the Katowice 11 13 to substitute little local shops. Now, the trend is to precise central position and the fact they have al- Agricultural Property Agency – ANR* for a Green- minimize the distance from customers living areas 10 12 14 16 18 20 22 24 26 28 ready attracted global players into their portfolio. field investment can cost around 25 to 40 PLN / sm instead of forcing them to travel long distances to 2 Logistics, FMCG and key investments in electronics (within a SEZ usually more), while a medium devel- EUR/m the suburban hypermarkets and malls. Investors are and white goods are the drivers for new warehouse oped private plot in a top logistics region can be now more open to enter municipalities which have developments. Beside that, Poland often plays a offered for between 100 and 200 PLN / sm. Source: Poland & Forecast Report 2013 Colliers International between 50.000 – 100.000 inhabitants for super- strategic role as a server market for further expan- markets or for discount markets with a minimum sions to Eastern markets. Based on that approach it The rents paid in 2012 in Warsaw oscillate between of 15.000 inhabitants. Polish retail is still relatively can be assumed that future development will be fo- IV.1.2.2. Office market 17 and 27 EUR/m2 in central locations, while out- shredded - the top 10 retailers have 30% market cused closer to the eastern border of Poland. Today side central locations, rents vary between 12 and 17 share. we can define five major Clusters for Warehouse EUR/m2. In the secondary cites rents are not exeed investments in Poland: Between 1990 and 2000 the Warsaw Office mar- 16 EUR/m2. The market of shopping malls in Poland has grown ket was in the centre of the first investment wave, very strongly within the last few years. Insufficient ■ Śląskie voivodship around Katowice, which started during the transition process. During Concluding pre-lets agreements is intensifying trend existence of coherent and developed shopping ■ Central Poland around Łódź, this process almost all global players, consulting and represents 35% of total transaction volumes. streets or city areas have initialized developers to ■ Warszawa and Mazowieckie voivodship, companies and banks installed their head offices build big shopping malls, which have been integrat- ■ Wielkopolskie voivodship around Poznań, in Warsaw to communicate the necessary pres- Leasers have started to look for savings as well in ed into the cityscapes or built just outside the cities. ■ Dolnośląskie voivodship around Wrocław. ence in the market and in order to start business the rental side costs. Service charges of 4 – 5 EUR/m2 Warsaw owns 6 objects with 59,000 to 110,000 m2,

134 135 Greenfield & Brownfield investments Greenfield & Brownfield investments

a similar picture can be found in Wrocław or in Łódź ■ mortgage, tory land tax. The fee is calculated with respect to tion from a grid operator (in case of all utilities) for with the prestigious Manufaktura. ■ lease. land value and cannot be changed more than once limitations in property use related to the presence a year (for special types of land this period can be of transmission facilities. Prices for commercial rents are falling with ad- Ownership extended to five years). Because of fee perpetual ditional space on the market. Prime locations will usufruct is recognized to be more expensive than Another right to real estate not lose attractiveness, but older objects with in- Full ownership gives the widest scope of rights re- regular ownership. sufficient service and quality will either have to lated to real estate and can be restricted only un- The Polish Civil Code also recognises the right to use adapt their pricing to new market conditions or go der certain circumstances, which are defined by Ownership vs. perpetual usufruct real estate in the form of lease, without ownership through redevelopment processes to be state-of the the Civil Code (neighbour or zoning regulations), rights. Any legal entity, including a foreign company art for more demanding customers. Today smaller administrative law or wiliness of the owner. Owner- A substantial difference between perpetual usufruct or natural person, may lease land without any special prime objects with a maximum of. 200 m2 oscil- ship rights are the most complete and have a full and ownership is that in the perpetual usufruct the permit from the Ministry of Interior and Administration late between 50–80 EUR/m2 while bigger leasers scope of the usage of the property of land or build- building is a separate object of ownership from the or any special conditions from local authorities. The pay around 20–50 EUR/m2 for good locations. Over ing. The right of ownership is protected against land, and acts as a second object. After constructing a freeholder may give his right to use and additionally 1,000 m2 an average rent can be found on a level all third parties, who are trying to act against the building, the perpetual usufructee becomes its owner to gain profit from the property to a third party. The of 8–12 EUR/m2 down to 5 EUR for hypermarkets, owner. The ownership rights are not time limited. with full ownership rights. In case of the termination of Polish Civil Code recognises two types of lease con- which are the major players for object operators. The government or public offices do not have any the perpetual usufruct, the usufructee has the right to tracts: umowa najmu (where only its use is possible) right to influence the ownership, except the zoning obtain an equivalent market value of the building from and umowa dzierżawy (for use and profit gain). and taxation regulations. In some cases properties the State Treasury or a local government, which is part may be expropriated with compensation for the of the property held in the perpetual usufruct. According to the above property rights and contrac- IV.1.3. construction of a public road. tual rights related to usage by third parties, the law Usufruct recognises so-called sales and leases back contracts. Perpetual usufruct These allow a foreign company or natural person to Acquiring real estate Usufruct is a qualified property right established get long-term rights for property use. Perpetual usufruct is established with respect to by the owner or perpetual usufructuary in a notary land owned by the State Treasury or local govern- deed. Usufruct allows for both using the real estate Real estate acquisition ment authorities. It is usually created for 99 years and gaining benefits therefrom. Usufruct can be Legal entitlement to real estate (the minimum period is 40 years) and may be ex- either payable or free of charge, However in case Real estate acquisition is regulated by the provisions tended. The perpetual usufructee is allowed to use of the latter it may be subject of additional taxa- of the Polish Civil Code. Property transfer may be Entitlement to real estate is regulated by the Pol- the land in the same scope as the owner. However, tion. The usufructuary is also obliged to incur costs based only on a sales agreement, which stipulates ish Civil Code from 23 April 1964. Real estate is the purpose of land use is defined by an agreement related to the real property maintenance. Usufruct all the parties’ rights and obligations. Both real es- understood to be grounds with premises, includ- and should be recognised before purchasing the is non-transferable, and it can’t be transferred onto tate and perpetual usufruct transfers become valid ing facilities such as apartments, and houses etc., right of usufruct. This is because the owner (State any other natural or legal person. through a sales agreement, which is obligatorily which are separate subjects of property in accord- Treasury or local government) may terminate the signed in front of public notary in the form of the ance with Polish Law. Full ownership gives the wid- agreement if the land is used in a way contradictory Real Estate easement notary deed. est scope of rights related to real estate and can be to the way defined in the agreement. The purpose restricted only under certain circumstances, defined is generally defined by development and zoning Real estate easement is a qualified property right, Pre-sales agreement by the Civil Code (neighbour or zoning regulations), regulations. Right to terminate the perpetual usu- under which the owner of a real estate may either administrative law or the owner’s will. Ownership fruct agreement is used by State Treasury or local use another real estate to a specified extent (de- Prior to the final transfer of rights, decision makers is the ultimate right to real estate and provides the governments only in exceptional circumstances fined in an easement contract), or possible actions may establish a so-called pre-sales agreement for owner with a complete range of usage. Ownership (continuous and flagrant violation of purpose). with respect to his/her property are limited in order selected land (or land with buildings). It is not nec- is legally protected against any third parties acting to increase usefulness of another real estate. Ease- essary but highly recommended to make the pre- against the owner. Ownership is not time-limited. The perpetual usufruct is transferred under the ments are established by contracts between prop- sales agreement in front of a public notary. In the Neither the government nor public offices have any same rules as regular ownership and property rights erty owners in the form of notary deed. Easements pre-sales contract it is possible to oblige the second right to intrude ownership, the only exceptions be- for real estate. No special permit from the owner shall be revealed in the land register. party to realise specific conditions related to the ing those presented in the zoning plan. (the State Treasury or local government unit) is re- property in question, such as clarifying legal status, quired (except when the transfer is carried out by Transmission easement the payment of mortgage and preparing for final The Polish legal system offers several types of rights foreigners). In most cases the perpetual usufruct sales. The pre-sales agreement may guarantee the to real estate: may be transferred to full ownership upon applica- Transmission easement is a qualified property right rights for future property transfers, even without tion and payment of the transformation fee. that can be established for a grid operator that in- any pre-payment or minimal amounts as pre-pay- ■ ownership, tends to construct or owns facilities used to trans- ment. ■ perpetual usufruct, Fee for perpetual usufruct mit electricity. The easement authorizes a grid op- ■ usufruct, erator to use the real estate to a specified extent, in Real estate and mortgage register ■ real Estate easement, Usufructees must pay the government an annual line with the intended use of transmission facilities. ■ transmission easement, fee (until 31 March 2009) separate from the obliga- The owner of the property may claim compensa-

136 137 Greenfield & Brownfield investments Greenfield & Brownfield investments

The above mentioned rules are binding for ownership controlled by similar naturals as members of govern- brownfield defines the basic scope of possibilities to plans are drawn up by communal authorities and or perpetual usufruct transfer. Both transactions differ ing bodies like Board of Directors). choose between the location advantages. in order to be effective have to be passed by com- in terms of when they actually come into force. In the munal council in the form of resolution. The proce- case of ownership transfer, the date of signing the final Exemptions for EEA companies Below is a short extract about the main location fac- dure related to the change of a zoning plan requires agreement is the day the buyer becomes the property tors which we must consider during the investment reconciliation with numerous authorities and public owner. Perpetual usufruct transfer requires (apart from The AARE classifies foreigners according to a- for process. consultation what makes it time consuming (mini- signing the sales agreement) entering the new usu- eign company’s registered seat or foreign natural mum time of nine months). fructee into the real estate and mortgage register kept persons place of abode when they are located both ■ greenfield vs. brownfield, by the proper court. As a consequence of the new en- within and outside the EEA. ■ the investment inside or outside the Special Eco- The zoning plan defines all conditions regarding try of the buyer, the perpetual usufruct is transferred. nomic Zone, prospective land use and the scope of business that When foreign companies and nationals are regis- ■ the distance, quality and time of logistics to the may be conducted on the properties located within Public purchase tered inside the EEA they are exempt from obtain- main customers, geographical limits, defined in the zoning plan. ing an acquisition permit. These entities do not re- ■ labour costs, availability and the quality of desired Zoning plan regulations are general and apply to all Purchasing real estate from public or government- quire any permit for the acquisition of shares/stocks blue-collar and white-collar workers, owners of real estates. controlled authorities entails a special procedure, or real estate, except agricultural land and a forest. ■ infrastructure and development costs (all media, which involves public tender or auction. Public or However, purchasing agricultural land or a forest roads, access and extension possibilities), Local authorities are empowered to create zoning government authorities guarantee equal conditions (12 years from 1 May 2004) or the so-called ‘sec- ■ the availability of required components suppliers, plans with respect to municipality development. to all potential buyers. ond house’ (five years from 1 May 2004 until 30 of ■ the appropriate contacts in local authorities. The municipality creates the zoning plan in accord- April 2009) still entails obtaining a permit, even for ance with voivodship and country zoning plans. Acquisition of real estate by foreigners foreigners registered inside the EEA. IV.1.4.2. Step-by-step Zoning plans may be changed by the municipality When on 1 May 2004 Poland became a member Procedure of permission process either in accordance with the owner’s application or state of the European Union and consequently joined investment process when the area is modified by the Government. The the European Economic Area, the real estate purchas- The standard procedure involves obtaining a permit latter situation is rather exceptional and takes place ing procedure was altered to become more attractive from the Ministry of Interior and Administration, when the modifications are related to public inter- for foreigners interested in investing in Poland. which takes on average three-four months of ad- Architecture Planning est (such as building roads and railways). ministrative procedures. Moreover, it is also neces- It should be noted that in case of special economic However, certain binding regulations of Polish Law sary to collect all required documents, which is a If the Start of Production (SOP) or other deadlines for zones all properties, located within a boundaries of defined by the Act from 24 March 1920 about the time-consuming process. an investment have been set up for a near date, the a special economic zone have a zoning plan passed Acquisition of Real Estate by Foreigners (further re- planning of buildings and other utilities must be pre- and effective. ferred to as the AARE), still states that foreigners A foreign businessperson may apply for a promise pared in advance. If the location has an official zoning with a seat registered outside the EEA intending to regarding a prospective acquisition. Such a promise plan passed (in the form of the resolution of a local Conditions for area development and construction purchase real estate in Poland must obtain a permit is in the form of a guarantee that he/she will obtain government), an architect can start planning without from the Minister of Interior and Administration. the permit without any special conditions or require- any delay. If there is no zoning plan the investor must A significant area of Polish territory has no zoning The required permission is issued in the form of ments. However, the promise is not an act that allows apply for Conditions for Area Development and Con- plans. This situation requires an application to the an administrative decision. This means that neither purchasing real estate or shares/stocks. In order to struction (CADC), which define the basic scope of the municipality for CADC. CADC is required for any a public notary nor a Polish court or Government close or transfer ownership, a permit is mandatory. buildings allowed to be constructed on the specific investment process of land development or new body can register or proceed with such action, and property. Depending on the complexity of buildings al- investment, such as the re-development of brown that the non-EEA entity will become neither owner lowed under CADC the procedure of obtaining CADC field sites.CADC may be applied for by an owner of nor usufructuary. decision takes from three to six months. a real estate or a third party. There can be multiple IV.1.4. different CADC issued for a single property (unlike Shares acquisition For the phase of architectural planning, a minimum zoning plan or building permit, where only one period of three-six months must be taken into con- document of that type may be issued and valid for This rule also applies to any acquisition of transactions Investment process sideration before a well-prepared document is sent to a single property). Depending on complexity and or other legal actions when the transaction concerns the architectural office to apply for a building permit. real estate features (like soil class), different external the shares/stocks (with the exemption of listed compa- Many companies often underestimate the volume of authorities may be engaged in the process of recon- nies) of a legal entity with a registered seat in Poland, official documents and procedures which must be ciliation of CADC. regarding the owner or perpetual usufructuary of the IV.1.4.1. Analysis prepared in order to start their operations in Poland. real estate. Permission from the Ministry of Interior and An application for a CADC should confirm specified Administration is required via acquisition or other le- Zoning plans conditions, e.g. that at least one adjacent plot is gal action. A Polish company becomes controlled by a The choice of location affects about 80% of the developed for a similar aim, has access to a public foreign company (which takes place when more than investment and follow-up costs (including devel- The property may be utilized only within the limits road and that the infrastructure is adequate for the 50% of votes on the Shareholder/Stakeholder Meet- opment costs, transport costs, wages, taxes and allowed in the zoning plan, regulated by the Act planned investment. Obtaining the CADC may take ing belong to a foreign entity or when a company is energy). The first choice between greenfield and from 27 March, 2003 on Zoning Planning. Zoning up to six months, depending especially on whether

138 139 Greenfield & Brownfield investments Greenfield & Brownfield investments

the application presents the expected influence of contract a specialized company that supports an Building permit ing plan and informs owners of neighboring real the investment in the local community. investor in the EIA process. estates about the fact that building permit is about Building permit is an administrative decision ap- to be issued. Environmental decisions The EIA procedure is carried out by the local govern- proving the architectural design and entitles an ment (commune), reconciled with local and region- investor to start construction works. Building Per- Except architectural design a building permit appli- Before applying for a building permit an investor is al authorities and in some cases consulted publicly. mits are issued by a district construction authority - cation shall contain, obliged to conduct the environmental impact as- It can be divided into following key steps: Starosta. In largest cities building permits are issued ■ a copy of the zoning plan or CADC decision; sessment (EIA) for the planned investment. The aim by the city office. Some large and infrastructural ■ environmental Impact Decision, of the process is to define related environmental 1. An investor prepares initial documents and sub- investments (like sea ports or national roads and ■ declaration that an investor holds a legal title al- risks at the stages of investment planning, construc- mits it to the local government - commune: motorways) require building permit to be issued by lowing him to apply for a building permit, tion and operations and minimize negative impact. ■ in case of group I – requests authority to define a regional authority – Wojewoda. ■ documents confirming that the design was recon- The process of EIA ends with obtaining an environ- scope of the Environmental Report, ciled with all relevant authorities (like utility pro- mental impact decision (EID). ■ in case of other investment – provides general Building permits are issued upon application of an viders, administrators of public roads that provide information regarding the investment (on a de- investor. Before the building permit is issued an au- access to the real estate). EID imposes environmental conditions for planning, fined form) and requests for decision if Environ- thority verifies if architectural design and attached construction and operations of an investment. Ar- mental Report and Decision are required. documents are legally compliant with Polish Con- The building permit is valid for 3 years from the day chitectural design, building permit and other per- struction Law (authority is not entitled or allowed to it was issued and validated. Building permit may be mits have to be compliant with conditions set in 2. Local government gives initial ruling (after recon- check technical characteristics of the design), zon- transferred to other entities. EID. As EID defines level of noise and emissions it ciliation with other authorities if needed): has impact on future operations as well. ■ in case of group I – defines scope of the Envi- No zoning plan ronmental Report, As EID has to be attached to the building permit ■ in case of group II – decides that Environmental EIA application it has to be obtained first. In case there Report and Decision are required, Preliminary is no zoning plan and an investor applies for CADC in other cases – decides that no EID is required application ■ and Reconcilliation Draft environmental decision needs to be obtained be- – an Investor receives an official confirmation, proceedings fore CADC. EIA is usually carried on simultaneously that should be attached to building permit ap- Design - Roads, with the design process, as the architectural design plication. - Utilities; - Land Use; and building permit need to be compliant with EID. EID The most important legal acts the EIA process are 3. An investor prepares Environmental Report and the Act of 3 October 2008 on the Provision of Infor- submits it to the local government – commune. mation on the Environment and its Protection, Pub- CADC lic Participation in the Environmental Protection and 4. Local government analyses the report, reconciles Zoning plan present Conditions for area development and construction Environmental Impact Assessments and The Regu- it with relevant authorities and issues the EID (or lation of the Council of Ministers of 9 November may refuse to issue EID). 2010 on types of projects likely to have a significant EIA impact on the environment. On stages 2 and 4 local government may decide to application Reconcilliation and Reconcilliation start public consultations of the EIA process or re- Architectural - Utilities; - Utilities; proceedings - Roads; Architectural The above act define three types of investment pro- quests amendments or complimentary information. Design - Roads; - Permits; Design jects with reference to EIA procedures: An investor may be requested for amendments or - Other; - Permits; complimentary information by local reconciling au- EID - Other; ■ always having a significant impact on the environ- thorities which are: local office of the National Sani- ment (group I), tary Inspection (Sanepid) and Regional Authority for ■ may potentially have a significant impact on the Environmental Protection (RDOS). environment (group II, Building Permit ■ cases in which modifications of civil structures are EID process is one of the more complex and time classified as projects from group I or group II. consuming stages of the permitting process and depending on investment complexity and environ- Appointment of Legal regulations list what types of investments mental impact takes from four to six months. If no Informing construction site manager Obtaining Construction Log should be qualified into group I or II. If an invest- EID is required official confirmation should be re- (and inspector if required) local construction inspectorate ment is not on the list no EID is required, however ceive from 2 to 6 weeks upon application. this must be confirmed by relevant authority. EID is valid for 4 years from the day when it be- As the EIA process requires significant amount of comes validated, EID can be transferred to a differ- Start of Construction data and expertize it is strongly recommended to ent entity.

140 141 Greenfield & Brownfield investments

Validation procedure protects interests of entities ■ approvals and certificates for built-in materials, that may be influenced by an administrative decision, equipment and machines, such as building permit or EID. After a decision is is- ■ protocols of checks and approvals for all relevant sued a notification with a copy of a decision is sent to installations (electricity, fire protection, water, gas); all engaged parties (neighbors, relevant authorities), ■ approval of technical inspectorate for certain which have 14 days to officially raise claims from the built-in machinery and equipment (lifts, tanks, day they receive a copy of a decision. Notifications boilers, cranes), are usually sent via regular mail what means that vali- ■ document confirming energy characteristics of dation time takes 14 days + time required to deliver the building, a letter with notification. If there are no objections or claims raised a decision receives a validation stamp. Following steps are required:

Before construction works are started an investor 1. Collect all above documents (Document confirm- needs get “validation stamp” on the building per- ing energy characteristics may be added in step 3). mit and receive a construction log, inform local con- 2. Inform local firefighting authority and local office struction inspectorate (Powiatowy Inspektor Nadzoru of the National Sanitary Inspection that the con- Budowlanego) 7 days before construction works are struction works were finished. Both authorities planned to be started and appoint an official construc- are entitled to check the construction site and all tion site manager (and works inspector if required). documents within 14 days after the information was received. In case they do not react within the In case of less complicated investments or some abovementioned time an investor may proceed redevelopment works a less complicated procedure to further step. of “construction works notification” may be used. In such case an investor submits a simplified design If one or both authorities decide to check con- (with relevant attachments) to a district construction struction site and documents an investor has to authority. If an authority does not raise any objec- receive a written positive approvals to proceed tions within 30 days construction works may be further (if any authority raises objections to the started without further formalities. construction site or documents improvements have to be made to receive approval). Use and operations permit 3. After approvals are issued (or above authorities After the construction works are finished an invest- do not react) an investor shall officially inform lo- ment needs to obtain the usage permit before op- cal construction inspectorate, which checks con- erations are started. In case of less complicated construction site and all documents again. If there structions it is enough to inform a local construction are no objections the usage permit is issued. The inspectorate about the fact that construction works building may be officially used after the usage were accomplished, if the inspectorate does not permit is validated. raise any objections within 21 days from the day it received the information an investor may start to use Additional procedures the building. Building permit defines if an investment requires a usage permit or only notification. Although not needed to obtain the usage permit there are some other permits related to environ- In both cases the following documents needs to be ment protection that should be obtained before delivered to construction inspectorate: operations are started:

■ declaration of construction site manager (and con- ■ emissions permits – approving start of operations struction inspector if required) that all works were of all installations emitting pollutants to air and accomplished, carried out compliant with the de- water, sign and the construction site with surrounding ■ approval of Environmental Inspectorate – if an in- area is cleared from construction remnants, vestment required an EID an investor shall check ■ construction log, and notify Regional Environmental Inspectorate ■ as-built geodesic map, (Wojewódzki Inspektor Ochrony Środowiska) Agora SA, ■ approvals of connections issued by all relevant about planned start of operations with 30-days utility operators and road administrators, advance. Warsaw

142 IV.2. M&A

After certain requirements are met, it is possible to IV.2.1. take over an entity operating within the special economic zone, which may relate to a further reduction The Polish M&A in operating costs.

market Privatisation processes which still involve a relatively significant percentage of Polish state-owned companies make it possible to find interesting targets for takeovers. One of the natural methods of implementing projects in Poland is to take over existing business enti- It should be noted that the intention of selling a ties. Nowadays, the following reasons for transac- company via such a process includes taking part tions in Poland can be identified: in public tendering procedures organised by the Ministry of State Treasury. It is crucial to prepare ■ good business opportunities resulting from the the appropriate documentation professionally as weakening of business entities due to the global indicated in the freely available, detailed tender financial crisis, specifications. ■ taking over businesses in order to obtain preferences resulting from operations in special eco- Undoubtedly, the initial signs of market improve- nomic zones, ment will cause investors to return to standard ■ the privatisation of state-owned companies, transactions between intact companies in condi- ■ looking for strategic partners to enable further- tions which justify a company’s purchase or sale. growth while financial markets are frozen. In case of a takeover, it is necessary to plan the The financial crisis, although not as devastating as whole process in an appropriate way, which usually in other countries, has caused certain companies consists of the following elements: (especially those operating in sensitive branches or incurring losses due to investments in currency ■ the choice of an investment adviser/partner look- options), to face bankruptcy proceedings. In many ing for entities to be potentially taken over, such cases, however, capital support and appropri- ■ initial negotiations, ate reorganisation may begin to cure the business ■ due diligence – extensive legal, tax and business and lead to the restoration of its profitability. There- analysis of the entity concerned, fore, such situations are constantly monitored by ■ final negotiations, according to results of due dili- organisations active in the mergers and acquisition gence, field in Poland. ■ closing the transaction – executing a contract.

A definite advantage of takeovers in Poland is the What makes the transaction easier, and sometimes use of entities enjoying preferences related to op- determines its success, is the choice of the right ad- erations in special economic zones. visers/partners that will find the right entity to be

144 145 M&A M&A

taken over and will obtain an appraisal beneficial The mergers have an effect on the territory of Po- for the buyer. IV.2.2. land, and the turnover of the involved enterprises that exceed a certain amount is covered by the ini- A crucial element of a successful transaction is the Regulations governing tial control of the President of the Office of Compe- appropriate performance of due diligence, which re- tition and Consumer Protection. quires cooperation with highly competent legal advis- M&A ers, tax advisers and business consultants. These people will conduct the necessary analyses and describe all circumstances crucial to the analysed company in a final report. The above actions are necessary to iden- The rules of the mergers and acquisitions of the tify the legal and tax hazards in the company’s opera- companies have been included in the Polish code of tions and to validate future business plans. commercial companies.

The representation of the parties constitutes part of Companies may merge with other companies or the investment contract (purchase contract for shares), partnerships; however, a partnership may not be which includes the basic agreements of the parties, the bidding party or the newly formed one. Part- representations and promises of the present owners, nerships may merge with other partnerships only contractual penalties and conditions precedent. through formation of a company.

Entities which perform the most takeovers in Po- A merger may be effected through the: land include: ■ transfer of all assets of a company or partnership ■ private equity funds, to another company in exchange for the shares ■ companies based in the EU, that the bidding company issues to the sharehold- ■ companies based outside the EU, which expand ers or partners of the target company or partner- into the EU market, ship (merger by takeover), ■ Polish business entities which increase the scale of ■ formation of a company to which the assets of their operations. all merging companies or partnerships devolve in exchange for shares of the new company (merger The most commonly encountered barriers for inves- by formation of a new company). tors during company takeovers, which often prevent the implementation of expansion plans, include: The target company, partnership or companies or partnerships merging by formation of a new com- ■ insufficient knowledge about the local market, its pany will be dissolved, without conducting liqui- structure and entities operating on it (difficulties dation proceedings, on the day in which they are in finding potential entities to be taken over/part- removed from the register. ners for cooperation), ■ insufficient knowledge of the legal and tax reali- It should be noted that a plan of the merger of the ties in the target investment country, companies requires a written accord between those ■ insufficient knowledge of solutions which allow merging companies. more profitable acquisitions of business entities with the use of companies already operating in As of the day of merger, the bidding company or the Special Economic Zones, the newly formed company takes all rights and du- ■ ignorance of the specific negotiation process and ties of the target company or partnership merging local business culture resulting from cultural dif- by formation of a new company. In particular, the ferences. bidding company or the newly formed company will take over any permits, concessions and reliefs granted to the target company or partnership or any of the companies or partnerships merging by formation of a new company (unless otherwise provided in the commercial companies code or the decision on granting the permit, given consent or relief).

146 147 IV.3. Public Private Partnership (PPP)

Public-private partnerships (PPP) are institutions, local government (including other central or local over which state (local) authorities can work to- state legal entities created under separate legisla- gether with private investors to achieve common tion for the purpose of performing public tasks), goals in an effective, accelerated and simple way. with the exclusion of enterprises, banks and commercial companies. PPP`s promote growth, because more investment projects can be completed at the same time. PPP Act has maintained the possibility of the gratuitous assignment of real property to a private A Legal act, which sets out the rules of cooperation partner or a PPP company for the duration of a PPP between public authorities and private institutions, project. Moreover, the PPP Act has introduced im- is an Act on Public-Private Partnership dated 19 De- provements concerning administering of real prop- cember 2008. This act has become part of the tools erties, such as: which already function in the Polish legal system, creating a cohesive whole. ■ the possibility of the assignment of a property to a private partner or special purpose vehicle with- The PPP Act regards the bodies, which may be con- out holding a tender of the Act on Real Property sidered as public entities in Art. 2 Sec. 1, to be: Management), ■ the possibility of sale with a discount. ■ a public finance entity as defined by the regulations on public finance, In order to carry out an investment project under ■ other legal person (defined in the PPP Act). the PPP formula, a public entity and private partner may establish a capital based company, a lim- Taking the above into consideration, we can enu- ited partnership or a limited joint-stock partnership merate some of the entities that fulfil the require- (Public Private Partnership Company). This is a spe- ments of the statute to be regarded as public en- cial purpose vehicle, the scope of which is provided tities including: the organs of public authorities, in the PPP contract of the PPP Act). Due to this fact including organs of government administration; any amendments to the contract or of the articles state control, law enforcement bodies and their of associations which must fall within the scope are associations; municipality; country and provincial set out in the PPP contract. authorities; entities financed by the state; and the

148 149 Public Private Partnership (PPP)

An exemplary model of cooperation between public and private partners:

PRIVATE PARTNER

PROPOSITION OF THE PPP PROJECT

PERMISSION FOR MINISTER PUBLIC ANALISYS OF THE REALIZATION OF FINANCE PROJECKT OF THE PPP PROJECT PARTNER

INFORMATION ON THE PPP PROJECT (14 DAYS)

MINISTER OF ECONOMY

Sky Tower, Wroclaw

150 151 IV.4. Important regulations

of Hygiene (Narodowy Instytut Zdrowia Publicznego IV.4.1. – Państwowy Zakład Higieny).

Polish trade Once approval has been granted, the goods may be imported to Poland. However, if a license has al- regulations ready been issued in another EU country, the document is valid in every state, that is a member to EU.

As consequence of accession to the EU structures, IV.4.1.2. Customs tariffs Poland has been required to follow European trade regulations and to replace its domestic regime in regard to the trade regulations. The Customs Service (Służba Celna) has an official Tariff Browser (a module of the Integrated Tariff Sys- tem - ISZTAR), that provides information on tariffs of IV.4.1.1. Import/export goods in international trade. The Browser contains data from the TARIC system (goods nomenclature, licensing duty rates, restrictions, tariff quotas, tariff ceilings and suspensions) as well as national provisions (VAT, The most common questions in reference to the excise tax, restrictions and non-tariff measures). The import and export of goods to/from Poland are li- Browser is maintained by the Customs Department censes that might be required, unless it is not local of the Ministry of Finances within the framework import. For the purpose of this section, local import of the Integrated Customs Tariff Information Sys- means import within the European Union states. tem - ISZTAR2. The Browser provides also detailed information concerning the commodity turnover to CAP (Common Agricultural Policy) import licenses Customs Administration and to all those concern- are required for several products imported from ing that issue. ‘third countries’ into any country within the EU. Such import licenses, often referred to as the AG- RIM Certificates, are issued in Poland by the Agri- IV.4.1.3. Customs procedures cultural Market Agency (Agencja Rynku Rolnego).

An example of another certificates are approvals The principal roles of the Customs Service include: that must be issued prior to the introduction of goods to the Polish market. This applies to the im- ■ exercising customs control on the international porters of products that are new to the Polish mar- commercial exchange, ket, who must request product approval from the ■ calculating and collecting customs duties and National Institute of Public Health – State Institute taxes,

152 153 Important regulations Important regulations

■ undertaking steps against smuggling and coun- of the Council of Ministers on 2 February 1999. This conclusion of illegal competition-restricting agree- decisions issued pursuant to appeals against the de- teracting customs fraud. considers the procedure and operating principles for ments (Art. 6) by: cisions of the President, are published in the Official Customs Authorities for withholding goods in the Journal of the Office. While performing these roles, the Customs Service case of the suspected violation of provisions of in- ■ directly or indirectly fixing prices, must fulfill a series of duties, the most important, tellectual, commercial and industrial property. As a ■ limiting or controlling production or sales, sharing The administrative decisions of the President of the apart from the fiscal function, is the protection of: result of EU accession, EU customs laws apply directly sales or purchase markets, Office related to competition law may be appealed to Poland. In particular the Council Regulation (EC) ■ applying burdensome or dissimilar terms and con- against to a special court set up within the struc- ■ national industry - against goods which would 1383/2003 of 22 July 2003, concerning customs ac- ditions in equivalent contracts with other trading tures of the Regional Court of Warsaw (the Com- adversely affect the conditions of competition in tion against goods suspected of infringing certain parties, thereby differentiating the conditions of petition and Consumer Protection Court). Appeal the country, intellectual property rights and the measures to be competition for these parties, applications must be filed within two weeks of the ■ natural environment - against entry of hazardous taken against goods, were found to have infringed ■ making the conclusion of contracts conditional date of receipt of the relevant decision. substances and micro-organisms, such rights. upon the acceptance or rendering by the other ■ world fauna and flora - against illegal predatory parties of supplementary performance, which has The Competition and Consumer Protection Court circulation of endangered species, nothing to do with the subject of the contract and decisions may be further appealed to the Supreme ■ consumers - against the entry into the market, has no customary relation thereto, Court, whatever the amount involved, but only for goods which are substandard with relation to Pol- IV.4.2. Currency and ■ restricting access to, or eliminating from the mar- questions of law (in Polish, kasacja). The appeal must ish norms or whose period of use has expired, ket enterprises not covered by the agreement, be filed within 30 days following the date of receipt ■ society - against the entry of goods, items or ap- ■ agreeing terms and conditions of bids by enterpris- of the ruling of the Court. pliances which are hazardous to life, health and exchange controls es entering the tender or by those enterprises and safety of citizens or would jeopardise the country’s the party organising the tender, in particular with A system of fines is imposed by the President of the security (e.g. weapons, paralyzing gases etc.), respect to the scope of the works or the price. Office for failure to comply with competition law. ■ the State - against the loss of cultural heritage (primarily against the exportation of goods with The main purpose of foreign exchange law is to abusing a dominant market position (Art. 9), in par- The penalties are discretionary and may range from: cultural value), protect the so called ‘foreign exchange interest‘ of ticular by: ■ authors, artists, industrial and commercial rights the State. After the turmoil of the past decade and ■ up to 10% of the total annual revenues of an en- owners - against infringement of intellectual the spate of currency crises occurring almost simul- ■ directly or indirectly imposing unfair (excessively tity in case this entity enters into agreements which property rights, trademark and patent rights etc. taneously in different parts of the world, protecting high or unjustifiably low) prices, aim to prevent, restrict or distort competition; this interest should mean being able to prevent any ■ limiting production, sales or technical development, abuses its dominant position; or proceeds with and control the area of: negative trends which could result in a crisis. Anoth- ■ counteracting the formation of conditions necessary a merger before obtaining a clearance decision er function of foreign exchange law is to introduce for the creation or development of competition, from the President of the Office, ■ the State’s customs policy instruments, regulating mechanisms which, if a crisis does happen, create ■ imposing burdensome terms and conditions of ■ the PLN equivalent of 1,000 EUR to 50 million EUR, the targets and volumes of international trade (e.g. administrative barriers to capital outflow. contracts, resulting in unjustified profits for the if no information or incorrect information was pro- monitoring the execution of customs quotas), enterprise. vided during the merger or anti-monopoly inspec- ■ the enforcement of national and international After the revision of law in Poland at the beginning tion proceedings, regulations relating to prohibitions and restric- of 2009, the parties can choose their contract of Source: Official homepage of Office of Competition and ■ the PLN equivalent of 500 EUR to 10,000 EUR for tions in the international trade, the enforcement payment in a currency other than Polish zloty. This Consumer Protection uokik.gov.pl each day of delay in compliance with a decision of regulations regarding permissible load of ve- is an important difference between the old regula- of the President of the Office or the ruling of the hicles to ensure proper use of roads by carriers, tions in Polish law, which stated that residents can Competition and Consumer Protection Court. and the enforcement of agreements concerning pay in a currency other than polish zloty only with customs prevention with Poland being a party, the approval of the Polish National Bank (NBP). In addition, competition law provides for penalties ■ foreign currency control, including combating so- which may be imposed by the President of the Of- called money laundering. In order to discharge fice, on a natural person acting as a manager or the above-described roles and responsibilities, being a member of a managing body of an entity the Customs Service co-operates with the other IV.4.3. or a group of entities (up to a maximum of 50 times State’s authorities, such as the Police, border the average remuneration), for breaching the law. control, general customs inspectorate and tax authorities. Also included in this are customs and Competition law Fines imposed by the President of the Office may be investigation services from other countries, com- appealed to the Competition and Consumer Pro- mercial organisations, research and scientific insti- tection Court. Such fines constitute the revenues tutes, universities and similar organisations. of the State budget and may be collected pursu- Competition law is based on the Act of 16 Febru- Competition law is enforced by the central admin- ant to executory administrative proceedings (these The import of infringing products may be blocked ary 2007 on competition and consumer protection. istrative body - the President of the Office of Com- proceedings consist of a forced seizure of assets, through cooperation with customs officials in special The most important actions forbidden through this petition and Consumer Protection (Prezes Urzędu and measures related to bank accounts and other procedures that were provided for by the Regulation law are: Ochrony Konkurencji i Kosumentów). The decisions properties of the debtor). and guidelines of the President, as well as courts’

154 155 Important regulations Important regulations

Polish competition protection legislation is efficient lowance Emission Trading Scheme will function as and its enforcement mechanisms function in a satis- IV.4.5. CO2 emission administrator. The Administrator will maintain the factory manner. EU regulations, which apply directly National Allowance Register and the list of busi- in Poland as of 1 May 2004, should further strength- allowances nesses participating in the system, in addition to en the effectiveness of the Polish competition pro- preparing the National Allocation Plans. Due to the tection authorities. This is due to the fact that the Directive’s provisions, the National Allowance Regis- President of the Office will closely cooperate with ter will be open to the public. Each year the Mem- the Commission regarding the enforcement of com- As of April 2010, Carbon dioxide (CO2) had a con- ber States shall submit a report on the application petition law within Poland and the EU as a whole. centration of 392,39 ppm (parts per million) within of this Directive to the Commission. the Earth’s atmosphere by volume. As a result of Directive 2003/87/EC of the European Parliament Under the Kyoto Protocol, countries with unused and Council, a greenhouse gas trading system was emission allowances may sell their unused allow- IV.4.4. created in the European Union, whereby the goals ances. This right to sell may also serve as an incen- set forth in the Kyoto Protocol could be more eas- tive to private business to invest in modern, envi- Regulations for ily achieved. This was approved by the Council in ronmentally friendly technology. An entity which

1997, following the conclusion of an inter-govern- emits CO2 into the atmosphere without having entering into contracts mental agreement in the same year. sufficient emission allowances has to pay a penalty amounting to EUR 100 for each allowance which The Directive creates the legal means with which it does not possess. The penalty is imposed by the to fulfil the Kyoto Protocol’s goal to decrease the Provincial Environmental Protection Inspector. Emis- emission of greenhouse gases, by implementing an sion allowances are valid only within a particular pe- Contracts in Poland are based on the rules of the effective European greenhouse gas allowance trad- riod of time. After its lapse, allowances are subject party’s autonomy. This is the main regulation for ing system. to annulment. contractual law in the Polish Civil Code. Contract law deals with promises which create legal rights The Polish parliament adopted a national green- The European Union Emission Trading System (EU and obligations. Polish law does not require the same house gas emission trading system (the ‘GGETS’) on ETS) is the largest multi-national emissions trading consideration as common-law systems. In the Pol- 3 December 2004. The emission trading system was scheme in the world, and is a major pillar of EU ish legal regime, all parties must agree the essential scheduled to come into effect from 1 January 2005, climate policy. The ETS currently covers more than terms, including the price and the subject matter of covering all aspects of industry in the energy, ther- 10,000 installations in the energy and industrial the contract. Nevertheless, parties are used to have mal, petrochemical and paper sectors. Pursuant to sectors, which are collectively responsible for close written agreements in order to avoid any future dis- the GGETS, the affected entities will be required to to half of the EU’s CO2 emissions and 40% of its putes and to protect their interests by searching for a apply for a greenhouse gas emission permit, which total greenhouse gas emissions. a ‘golden middle solution’. Contracts in Poland may will entitle each emitter to emit a defined amount be also made by the word of mouth. However, there of such greenhouse gases into the atmosphere. The Under the EU ETS, large emitters of carbon dioxide are exceptions to this rule, such as real estate sales or holder of a permit will be entitled to emit gases into within the EU must monitor and annually report the sale of shares in a company, which requires acting the environment up to its assigned limit. If such a their CO2 emissions, and they are obliged every year in front of the notary in public. holder so chooses, they may also sell any unused to return an amount of emission allowances to the

gas emission allowances on the open market to government, equivalent to their CO2 emissions in Other law sources other gas emitters likely to exceed their assigned that year. In order to neutralise annual irregularities

allowances. in CO2- emission levels that may occur due to ex- There are also many private international law regula- treme weather events (such as harsh winters or very tions that have been ratified and remain applicable in GGETS states that the individual allowances grant- hot summers), emission allowances for any plant Poland, e.g. the Council Regulation No 44/2001 of ed to each gas emitter will be determined by the operator subject to the EU ETS are given out for a 22 December 2000, the United Nations Convention National Allocation Plan (the ‘Plan’) prepared at sequence of several years at once. on Contracts for the International Sale of Goods - least three years in advance. The Plan establishes CISG of 11 April 1980 and the New York Convention the total number of allowances to be granted dur- of 1974 on the Limitation Period in the International ing a given time period, the number of allowances Sale of Goods. granted to each gas emitter, along with the criteria to be used in allocating the allowances. A gas Contracts between Polish and foreign companies are emission permit will be issued by either the county covered by the Act on International Private Law of 12 chief executive or provincial governor in response November 1965, however the Act, in regard to the to receiving an applicant’s motion. The Minister of law applicable, will most probable redirect the parties Environment Protection will supervise the trading to international regulation that Poland has ratified. system, while the National Administrator for the Al-

156 157 IV.5. Securing business

IV.5.1. The patent or protection right of a utility model gives the owner the exclusive right to exploit the invention Property rights on the territory of Poland while it is valid. This exclusive right cannot, however, be abused specifically by applying prohibited monopolistic practices. In particular, patent rights will not apply where its exploitation by On 22 August 2001 a new Industrial Property Law a third party is necessary to satisfy a domestic mar- came into force. This replaced the four previous ket need. Also specifically, when the public interest items of legislation (Laws on Inventive Activity, requires so and supply and/or quality of the product Trade Marks, Integrated Circuit Patents and on the concerned is insufficient, and/or its price is unduly in- Patent Office). The new legislation does not signifi- flated. This provision, however, does not apply in the cantly change the regulations applied to industrial first three years following patent registration. and commercial intellectual property rights. Abusing patent rights as well as preventing or eliminating a state of national emergency may be reason IV.5.1.1. Patent legislation enough to apply for a compulsory license. There are no special terms on licenses for this. The owner of a patent or exclusive license has the right to sue for Poland is a member of the Stockholm Text of the an injunction on account of profits and/or damages. Paris Convention on the Protection of Industrial Criminal penalties are foreseen for false marking and Property. Since 1990 Poland has also been a signa- infringement. Marking products with a patent num- tory to the Patent-Cooperation Treaty. The Industrial ber are commonly used but not obligatory. Property Law regulates the protection of inventions by patents and utility models. Applications are filed with the Polish Patent Office. Polish patent attor- IV.5.1.2. Trademarks neys must represent foreign applicants.

Registered patents are valid for 20 years from the Poland is a member of the Madrid Agreement date of filing. The protection right of a utility model (Madrid Agreement Concerning the International is valid for 10 years. To keep a patent or protec- Registration of Marks) on the registration of trade- tion right in force annuities are to be paid. Patents marks and the prevention of false or deceptive in- are granted after an examination as to whether an dications of a source of goods. Since 1991 Poland invention is new, involves original research and is has also been a member of the Madrid Agreement commercially viable. A utility model is to be new on the international registration of trademarks. It and useful and to relate to the shape, construction, became a member of the Protocol for this Agree- or arrangement of an object that has a durable ment in the spring of 1997. The following kinds of form. Applications are published 18 months from mark may be registered: the priority date.

158 159 Securing business Securing business

■ trademark, manufacturers amounting to a maximum of 3% of The value of the Polish public procurement market in years 2000-2012 ■ service mark, the sales income generated by these products. bn PLN ■ collective mark, 180 ■ mutual quality assurance trademark. The new law gives ground for more efficient pro- 160 cedures for enforcing copyright protection. Illegally A registered trademark is valid for 10 years from the obtained benefits may be confiscated and returned 140 date of filing unless it is proved that the mark has to the true owner. The law also envisages penalties 120 not been used for five consecutive years. The regis- for infringement of intellectual property rights by fines 100 tration may be renewed for the next 10-year period. and even prison sentences for up to five years. The 80 In the case of infringement, the proprietor or licen- new legislation has considerably strengthened copy- see can take legal steps. Protection is extended to right protection in Poland. It has also contributed to 60 names of geographical places and regions, where curtailing piracy. Meeting international standards 40 the name refers to a specific locality or area associ- in intellectual rights protection creates appropriate 20 ated with a particular product and where there is conditions for foreign investments making use of 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 a particular characteristic of the product associated property rights. with the name. Foreign applicants have to be repre- Source: The Annual Report of the Public Procurement Office for the year 2012 sented by a local patent agent in Poland.

IV.5.2. is placed by the producer on his product. The CE procurement law regulates the purchasing by pub- IV.5.1.3. Copyrights sign certifies that the product is consistent with all lic sector authorities of contracts for goods, works Product certification law requirements and safety standards. These re- or services. It concerns orders for construction quirements are based on over 20 European direc- work, supplies or the rendering of services which Copyrights in Poland are protected by the Law on tives, each of which regulates a policy for another are financed from the state budget or from mu- Copyrights and Rights in relation to 4 February product. The directives are implemented in Poland nicipalities. The Public Procurement law is designed 1994, which was substantially revised in June 2000. Product Conformity Certification, to use its full title, through the legal act of estimation systems from 30 to open up the EU’s public procurement market to The new law meets contemporary international is a process by which manufactured products are as- August 2002. It is important to notice that without competition, to prevent ‘buying national’ policies standards and corresponds to the principles of free sessed and verified as conforming to stated require- a CE sign, the product cannot be used across the EU and to promote the free movement of goods and trade in intellectual property. ments. This results in the issue of a statement or countries nor imported from outside the EU. services. The public procurement aspects are regu- certificate of conformity and, normally, approval to lated in the Act on Public Procurement Law of 29 The scope of copyright protection has been con- apply a mark indicating the conformity of the prod- Products with this mark can be used throughout the January 2004. The abovementioned act stipulates siderably broadened of late. The new law covers uct. Certification may be mandatory or voluntary. European Union and in Norway. the entities which are obliged to apply and fulfil all not only the protection of traditionally understood of its requirements. author’s rights, but also related rights. The law Mandatory certification applies when required provides for new rights and new owners of those by either national or international law. Voluntary In accordance with the annual report of the Public rights. They are now able to decide how the out- systems are being implemented by specifying or- IV.5.3. Public Procurement Office for the year 2012, the market come of their work is to be used and are able to ganisations in order to improve the build quality of value of the Public procurement amounts to PLN derive financial benefits from this outcome. The components that form an integral part of a larger 132,7 billion. Despite the decrease of the public new owners include producers of sound and video product. In simple terms, a mark on a product is procurement law procurement market in Poland in comparison to recordings, TV channels, radio stations and artist- a form of assurance that the product and system the peak year 2011, the public procurement consi- performers. The new law provides the protection of used to manufacture it all meet the regulatory re- tuted 8,32% of the national gross product in 2012. intellectual property in the area of science, technol- quirements and the relevant specifications. Marks The Polish public procurement legislation dates Therefore this part of Polish law has a significant ogy and manufacturing, including computer pro- in many different formats are used and some are back to 1994 when the first Act on Public Procure- role for Polish and Foreign entrepreneurs conduct- grams and industrial designs, etc. The protection mandatory. Others are not. ment was adopted. The Act was amended several ing business in Poland. mechanism of computer software is similar to that times over the following years, mainly with the aim used in EU countries. The underlying certification process may involve of clarifying its rules and definitions, broadening the The act does not apply to orders which do not ex- various tests and production quality assurance pro- scope of application and making the procurement ceed EUR 14,000 in value. The law also provides for a general compensation cedures and will vary in value and cost. Product cer- process more transparent. The adjustment of the mechanism of losses incurred by authors, perform- tification marks signal that a product conforms to a Polish procurement provisions to the EU require- Polish law provides several procedures for the ers, and producers due to uncontrolled mass repro- specification, so it is important to understand the ments was a major factor in the preparation of the granting of a public procurement order. However, duction for personal use (at home). Producers and content of the specification to fully appreciate the new legislation. The new Public Procurement Law two of these are applied in most cases, namely importers of VCRs, tape recorders, other audio and value of the mark. was adopted on 29 January 2004 to replace the Act unlimited tender bidding and limited tender bid- video equipment, as well as clean tapes, CDs, etc., of 1994. In April 2006 and April 2007 the Public ding. The unlimited tender bidding, apart from the must pay a surcharge to the artists, performers and In accordance with EU law, it is very important to Procurement Law was largely amended in order to limited tender, forms the basis of procedure. In this certify the product with the ‘CE sign’. This symbol implement the provisions of the EU directives. Public procedure, all the interested contractors may place

160 161 Securing business Securing business

their offer in response to a public advertisement. In actions taken during the procurement procedure. In inaccurate data having been furnished in the bank- the limited tender binding procedure the contrac- other situations there are no similar limitations and IV.5.4. Bankruptcy ruptcy petition. tors send an application for admittance to participa- the appeal may be lodged against any illegal actions. tion in the bidding. The offers may be sent only by In the case of an appeal being lodged, the awarding en- and restructuring Instead of liquidation, bankruptcy proceedings may contractors which have been invited to submit of- tity may not conclude a contract until the Chamber has be finalised by an arrangement between the com- fers. Furthermore, Polish law provides procedures as passed its judgment or decision which ends the appeal pany and its creditors. follows: negotiations with advertisement, negotia- process. The Chamber will examine the appeal within tions without advertisement, competitive dialogue, 15 days from the date of its submission to the Chair- The 2003 Bankruptcy and Restructuring Act estab- Another legal institution provided by the Polish order with restrictions, price enquiry, electronic bid- man of the Chamber. The Chamber will then issue a lished rules concerning the bankruptcy of entrepre- Bankruptcy and Restructuring Law Act are reha- ding. However, those procedures may be applied in judgement on the dismissal or admission of an appeal. neurs as well as settlement and restructuring pro- bilitation proceedings occurring in the event of a exceptional situations. ceedings aimed at preventing bankruptcy. threat of insolvency. An entrepreneur will be threat- The parties and participants of the appeal procedure ened with insolvency if, despite performing their The contractor or supplier who attends is basically may complain to the court against the Chamber’s rul- There are two types of bankruptcy that may be de- obligations, it is obvious that according to a reliable obliged to pay a tender deposit of no greater than ing. The complaint should be lodged with the district clared. Firstly, liquidation proceedings which result assessment of their economic situation they will 3% of the value of the procurement. The deposit court competent for the seat or place of residence in the sale of all assets and the deletion of the com- soon become insolvent. Such entrepreneurs may may be paid in cash. However, the bank guarantee, of the awarding entity. The court shall forthwith ex- pany from the National Court Register. Secondly, initiate and conduct proceedings aimed at reducing insurance guarantee, bill of exchange confirmed by amine the complaint, however not later than within bankruptcy with the possibility of entering into an debts or repaying them in instalments, as well as a bank and other financial guarantees are excepted one month of the day on which the complaint was settlement agreement with te creditors. securing the payment of their debts. The procedure from this rule. received by the court. The contract cannot be closed is supervised by a person indicated by the court, but so long as the appeal proceedings are not finalised. According to the Polish Bankruptcy and Restructur- is conducted by the debtor. Taking the above into The ordering party includes all of the essential ele- ing Law Act, a declaration of bankruptcy should be consideration, one can see that this procedure is ments in the specification which are necessary for An agreement between the ordering party and the issued in respect of a debtor who has become in- not compulsory. the precise description of the ordered products or contract with the best offer must be executed in writ- solvent. A debtor is insolvent if they are in default for carrying out a delivery. ten form on pain of validity. However, when Polish of their enforceable obligations. A debtor, which is law requires a special form (e.g. a notary deed), such a legal person, shall be deemed insolvent also when The best offer is chosen on the basis of criteria fore- an agreement should be closed also in this form. The their obligations exceed the value of their assets, seen in the specification. The best price, which is the agreement should be concluded in this way that the even if they should be currently in the discharge of IV.5.5. most common indicator, is not the only criterion used scope does not exceed the obligation under offer. these obligations. The court may dismiss a bankrupt- by Polish authorities. Very often, the quality, function- cy petition when the delay in the discharge of obliga- Renewable energy ality, application of the best available technology and The last amendment of the Public Procurement Act tions has not exceeded three months and the sum of its impact on environment may also be applied. came into force on 20th February 2013. the outstanding obligations is no higher than 10% support system of the balance-sheet value of the debtor’s enterprise. The public procurement law is an administrative law. The court will also dismiss a bankruptcy petition in However, based on the contracts closed upon a ten- which the assets of the insolvent debtor are not suf- der application, the Civil Code and Civil Procedure ficient to cover the costs of the court proceedings. Dependency of the sector Code are used. 27% 45% A bankruptcy petition may be filed by the debtor or The state of technology development and current The information about proceedings is published in by any of their creditors. A petition may also be filed, energy market conditions do not guarantee cost- the Public Procurement Bulletin on the website of in respect of legal person, by by the company’s rep- efficiency of power plants based on renewable en- the Public Procurement Office and the official Jour- resentative. The crucial thing is that a debtor shall, no ergy sources. To fulfill the National Overall Target for nal of the European Union. 28% later than within two weeks from the day on which the share of energy from renewable sources in gross grounds for the declaration of bankruptcy arose, file final consumption of energy in 2020 set by the EU, The contractor and participators of the public pro- a bankruptcy petition with the court. In the case of Poland implemented a Renewable Energy (RE) sup- curement procedure as well as others who have a a debtor being a legal entity, the aforementioned port system. legal interest may appeal from any action and omis- Supplies duty shall be attached to whoever is entitled to rep- sions which are incompliant with the procurement Services resent the company (individually or jointly with other The current system law. The appeal should be lodged with the National Construction work people). These persons are liable for any damages Appeal Chamber within 5, 10 or 15 days, depend- that may arise through the failure to file the petition The current support system for renewables in Poland is ing on the value of the order or contract. within the time limit indicated above (two weeks). based upon the Energy Law and regulations of particular ministries. The current form is a quota system func- If the value of the contract award procedure is less The debtor files, jointly with the bankruptcy peti- tioning on a basis of certificates of origin and different than a certain amount - specified in the appropriate tion, a written statement as to the accuracy of the kinds of tradable renewable energy certificates (REC). provisions of the Public Procurement Law - the appeal data contained therein. If this statement is inaccu- may solely be admissible against only some of the rate, the debtor is liable for any damage caused by

162 163 Securing business Securing business

The fundamental part of a quota system is a re- share of the renewable in the gross final electricity support system in an advantageous way for new newables obligation order (ROO) – an amount of consumption reaches 10.57%. investments. energy from renewable sources which energy traders are obliged to sell. In Poland the path for ROO Sales structure Main development directions: is set in the EU approved National Action Plan and ■ introduction of a technology differentiation by announced by the regulator. Every year the market regulator announces a renew- implementing corrective coefficients, ables obligation order that arranges the energy sales ■ precise definition of terms of validity for those co- Certain entities are obliged to buy the whole amount structure. Three different types of REC Yellow, Red efficients, of renewable energy directly from any RE power and Violet describe the share of electricity coming ■ change of the support estimation formula, plant or are forced to pay a replacement fee, a sort from cogeneration in certain chosen technologies. ■ clear efforts to prevent REC market crash, due to of penalty. Those entities also have to provide a grid Electricity available due to the increased energy effi- the excess of generated certificates, access for any plant using renewable technology. ciency is included by the White RECs. Green RECs are ■ expected recovery in sectoral dynamics with the the share of electricity from renewable sources. The Renewable Energy Act taking effect. Certificates of origin are used by the regulatory au- rest of the electricity sales called “Black energy” con- thority to monitor the fulfillment of obligations, espe- sists of conventional technologies and is been cre- cially the procurement of energy under the renewa- ated by simple demand and support equilibrium on bles obligation order by the obliged entities. Those the energy market without any mandatory quotas. certificates are not tradable but the property rights The following diagram shows the obligatory yearly bound to every certificate of origin are tradable goods sales structure of electricity for 2013. on the energy market – the Towarowa Gielda Energii (TGE). Electricity sales structure for 2013

Property rights are the central part of the whole support system. The financial aid for the renewables in Poland is generated by the sale prices of those rights, commonly 23.2% known as certificates (REC). There are couple sorts of tradable REC for different technologies and fuels. 0.9% 59,2% Renewables in Poland 12% 3.7% GWh 14000 1% 12000

10000 Red REC Violet Rec Green REC Yellow REC 8000 White REC Black energy 6000 Source: Governmental decrees, 2013 4000 2000 RECs on the market 0 Price for the RECs is been created on the market. With- out a differentiation between all the available technolo- 2005 2006 2007 2008 2009 2010 2011 2012 gies and because of the lack of certain market stabiliza- tion mechanisms the current system generates volatile Biogas Biomass Wind prices and endangers new investments. Newly experi- Hydro Coincineration enced REC price fall shows an acute need for modern Source: Energy market Regulator (URE), 2013 support system solutions.

Poland still generates about 85% of the overall The Renewable Energy Sources Act draft electricity from lignite and coal. Due to the EU regulations and the implemented support system for the Currently a new regulation for the energy sector renewable energy sources the share of the electric- is under development. This act is dedicated to the ity from renewables constantly increases. In 2012 renewable energy sources and changes the current

164 165 V. Sources of Information

166 167 V.1. Polish Information and Foreign Investment Agency

The Polish Information and Foreign Investment The services provided by PAIiIZ, according to its Agency (PAIiIZ) is a useful partner for foreign en- mission are free of charge. trepreneurs entering the Polish market. The Agency guides investors through all the essential adminis- In order to ensure the best quality of service, the trative and legal procedures that involve a project. Agency is divided into departments and buroeaus It also provides rapid access to complex information with defined responsibilities: relating to legal and business matters regarding investments. ■ the Foreign Investment Department is responsible for winning foreign investors and ensuring Moreover, it helps with finding the appropriate the best quality of services. The employees of this partners and suppliers together with new locations. department advise the companies in scope of the This Agency was established in June 2003 to co- best location and take part in the negotiations. ordinate the economic promotion of Poland, The Foreign Investment Department assists the stimulate the inflow of foreign direct investment, companies at the investment and also supports assist foreign companies in their investment pro- the firms which have already invested in Poland, cesses and promote Polish exports. It was created in a merger between the State Foreign Investment ■ one of the most important departments is the Agency (PAIZ) and the Polish Information Agency Economic Promotion Department. Promotional (PAI). Both institutions were established in order to activities of the department include organization support the development of Polish economy by rais- of seminars, conferences, economic forums for ing the inflow of foreign investments and promo- investors both in Poland and abroad as well as tion of Poland abroad. exhibitions abroad. It is also responsible for pub- lications and promotion materials on Poland and The Polish Information and Foreign Investment its economy. Agency provides professional advisory services for new investors in Poland, including: Since 2011 in PAIiIZ operates also China – Poland Economic Cooperation Centre as a “one-stop ■ assistance and support for finding the best loca- shop” providing comprehensive information on tion for investment, investment opportunities in Poland and offering ■ finding the potential cooperation partners and support for Chinese companies during the invest- suppliers, ment process. The Centre is responsible for: pro- ■ support concerning the investment incentives, motion of Poland as a location for FDI, identifying ■ assistance for the entrepreneurs during the whole sources of foreign direct investment, supporting the investment process. missions and delegations from China, preparing analysis & information, maintaining regular contact

168 169 Polish Information and Foreign Investment Agency Polish Information and Foreign Investment Agency

with Chinese companies operating in Poland, Go local authorities and Regional Investor Assistance Contact us to learn more about how your com- China Project. More information you can find on: Centres, which work on promotion and increas- pany can profit from the unique business potential www.gochina.gov.pl ing the FDI inflow into regions. of Poland.

Also since 2013 PAIiIZ is implementing the “Go ■ The Economic Information Department collects Contact details: Africa” programme. Its aim is to encourage Polish and analyses economical data, which can be entrepreneurs to invest in African countries and used by the Agency or interested companies. Polish Information and Foreign Investment Agency promote Poland in Africa. Therefore PAIiIZ has or- The scope of duties also includes monitoring for- ganized: fact finding missions to African countries, eign investment in Poland and Polish investment Foreign Investment Department participation of Polish entrepreneurs in fairs, con- abroad, establishing cooperation with domestic ul. Bagatela 12 ferences, seminars and workshops both in Poland and international business partners and research 00-585 Warsaw, Poland and in Africa. Furthermore the Agency has prepared institutions. The Economic Information Depart- tel: +48 22 334 98 75 publication on 4 African markets. More information ment is also responsible for maintaining Poland’s fax: +48 22 334 99 99 you can find on:www.goafrica.gov.pl OECD National Contact Point. e-mail: [email protected] [email protected] ■ Bureau for Eastern Poland Economic Promotion ■ Accountancy, financial, administrative and IT Programme is mainly responsible for realization of tasks belong to the Finance and Logistics Office. tasks within the scope of Eastern Poland Macrore- The employees of this department are respon- gion promotion in compliance with the Eastern sible for the organising of financial documents Poland Economic Promotion Programme (Meas- and monitoring of the financial condition of the ure I.4 Promotion and Co-operation, component agency. The Organisation and Personnel Office is Promotion, Development of Eastern Poland Op- responsible for organisational and HR issues as erational Programme). The Bureau is responsible well as trainings. for organization of participation of Eastern Poland entrepreneurs in fairs/exhibitions in Poland and ■ The Audit and Control Department is responsi- abroad; complex realization of outgoing and in- ble for the internal auditing of the Agency and of coming economic missions; organization of na- other companies resulting from legal regulations. tional/foreign theme conferences, seminaries and It also concerns the structural funds which are economic fora; preparation and complex service implemented by the Agency. of study visits of foreign journalists in Poland and Eastern Poland representatives abroad; prepara- Besides the National Contact Point, the Agency tion of information/ promotion materials and also maintains an Information Point for companies distribution of thereof during organized events; which are interested in European Funds. All of the supervision of promotional campaign process in Agency activities are supported by the aforemen- national and foreign media; coordination of PR ac- tioned Regional Investor Assistance Centres. Thanks tivities which inform about stage of realization of to training and ongoing support by the Agency, the the Programme; supervision and realization of the Centres provide complex professional services for contest for the entrepreneurs/ regional authorities investors at voivodship level. related to implemented promotion activities. Polish Information and Foreign Investment Agency ■ The Information and Communication Department is the best source of knowledge, not only for for- creates and implements the Agency’s information eign entrepreneurs but also for domestic compa- policy. It deals with national and international me- nies. dia and promotes positive image of PAIiIZ and its projects. The department is also responsible for On the website www.paiz.gov.pl the investor can organizing study tours for foreign journalists and find all the necessary information concerning key managing Agency’s web portals. facts about Poland, the Polish economy, legal regulations in Poland and all detailed information which ■ The Regional Development Department is respon- could be useful for any company wanting to set up sible for preparing investment offers for potential a business in Poland. investors. The Regional Development Department manages and actualises the database of investment offers (brownfield and greenfield). Therefore the RDD cooperates with Special Economic Zones,

170 171 V.2. Regional Investor Assistance Centres

Dolnośląskie Voivodship Kujawsko-Pomorskie Voivodship Dolnośląska Agency of Economic Cooperation Investor Assistance Centre Kujawsko-Pomorskie Voivodship Marshal’s Office ul. Kotlarska 42 Investor Assistance Centre 50-151 Wrocław pl. Teatralny 2 87-100 Toruń Contact: Contact: Małgorzata Chalabala E-mail: [email protected] Cezar Buczyński Tel.: +48 71 344 02 86 E-mail: [email protected] Tel.: +48 608 660 700 Tel.: +48 56 621 82 64; ex. 2531 fax: +48 71 344 02 85 Fax: +48 56 621 82 64; ex. 2401

Robert Śliwiński Marek Ryłow E-mail: [email protected] E-mail: [email protected] Tel.: +48 71 343 42 34 Tel: +48 56 646 20 23 Tel.: +48 71 344 02 87 Fax: +48 56 621 82 64

Tel.: +48 71 344 02 86 www.kujawsko-pomorskie.pl/coi/ fax: +48 71 344 02 85 www.dawg.pl

172 173 Regional Investor Assistance Centres Regional Investor Assistance Centres

Lubelskie Voivodship Łódzkie Voivodship Mazowieckie Voivodship Opolskie Voivodship

Lubelskie Voivodship Marshal’s Office Łódzkie Voivodship Marshal’s Office Agency for Development of Mazovia Opolskie Centre for Economy Development Investor Assistance Centre Promotion and Foreign Cooperation Department Investor Assistance Centre Investor Assistance Centre ul Stefczyka 3 Investor Assistance Centre ul. Brechta 3 ul. Spychalskiego 1A 20-151 Lublin ul. Moniuszki 7/9 03-472 Warszawa 45-716 Opole 90-101 Łódź Contact: Contact: Contact: Contact: Dariusz Donica Katarzyna Cesarczyk Sławomir Janecki E-mail: [email protected] Janusz Baranowski E-mail: [email protected] E-mail: [email protected] Tel. +48 81 537 16 11 E-mail: [email protected] Tel.: + 48 22 566 47 89 Tel.: +48 42 291 98 50 Iwona Święch-Olender Dorota Gardzała Marcin Szurmiński E-mail: [email protected] E-mail: [email protected] Marek Kudła E-mail: [email protected] Tel.: +48 81 537 16 21 E-mail: [email protected] Tel.: +48 22 566 47 83 Piotr Regeńczuk Tel: +48 42 291 98 50 E-mail: [email protected] Sylwia Kolbus Tomasz Wolff E-mail: [email protected] Izabela Kozłowska E-mail: [email protected] Adam Olbert Tel.: +48 81 537 16 21 E-mail: [email protected] tel. +48 22 566 47 85 E-mail: [email protected] Tel: +48 42 291 98 49 E-mail: [email protected] Tel.: + 48 22 566 47 60 Ewa Dudik Tel/fax: +48 81 537 16 21 www.biznes.lodzkie.pl Fax: + 48 22 843 83 31 E-mail: [email protected] www.invest.lubelskie.pl E-mail: [email protected] www.armsa.pl E-mail: [email protected] Tel.: +48 77 403 36 46 Małopolskie Voivodship Tel.: +48 77 403 36 47 Lubuskie Voivodship Tel.: +48 77 403 36 48 Małopolska Regional Development Agency Fax: +48 77 403 36 07 Regional Development Agency in Zielona Góra Investor Assistance Centre www.ocrg.opolskie.pl Investor Assistance Centre ul. Jana Pawła II 41 L (within the Regional Development Agency.) 31-864 Kraków ul Podgórna 7 65-057 Zielona Góra Contact:

Contact: Beata Górska-Nieć E-mail: [email protected] Justyna Śmielska-Saniuk Tel.: +48 12 620 91 40 E-mail: [email protected] Fax: +48 12 620 91 66 Tel.: +48 68 456 55 31 E-mail: [email protected] Daniel Chalecki www.marr.pl E-mail: [email protected] Tel.: +48 68 456 54 87 Fax: +48 68 456 55 70

E-mail: [email protected] www.coi-lubuskie.pl

174 175 Regional Investor Assistance Centres Regional Investor Assistance Centres

Podkarpackie Voivodship Pomorskie Voivodship Śląskie Voivodship Warmińsko-Mazurskie Voivodship Rzeszów Regional Development Agency Pomorska Development Agency Śląskie Voivodship Marshal’s Office Investor Assistance Centre Regional Investor Assistance Centre Investor Assistance Centre Warmia and Mazury Regional Development Agency ul. Szopena 51 ul. Arkońska 6/A3 ul. Ligonia 46 Investor Assistance Centre 35-959 Rzeszów 80-387 Gdańsk 40-037 Katowice Plac Generała Józefa Bema 3 10-516 Olsztyn Contact: Contact: Contact: Contact: Małgorzata Zajchowska Marcin Piątkowski Aleksandra Samira-Gajny E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Aleksandra Gajewska Tel.: +48 58 32 33 256 E-mail: [email protected] Małgorzata Patro-Zagaja Bogusława Kruczek-Gębczyńska E-mail: [email protected] Anna Kamińska E-mail: [email protected] Anna Kachel Tel.: +48 58 32 33 249 E-mail: [email protected] Joanna Augustyn E-mail: anna.kamiń[email protected] Marek Franczak E-mail: [email protected] E-mail: [email protected] Tel.: +48 89 521 12 50 Michał Kacprowicz Fax: +48 89 521 12 60 Michał Rzucidło Tel.: +48 58 32 33 240 Anna Rogowska www.wmarr.olsztyn.pl E-mail: [email protected] E-mail: [email protected] E-mail: [email protected]

Tel/Fax: +48 17 852 43 76 Wojciech Tyborowski Tel.: +48 32 774 00 68 E-mail: [email protected] Tel.: +48 58 32 33 240 Tel.: +48 32 774 00 68 Wielkopolskie Voivodship www.coi.rzeszow.pl E-mail: [email protected] Tel.: +48 32 731 34 21 www.invest.slaskie.pl Maria Przybylska The Association of Wielkopolska Municipalities E-mail: [email protected] and Counties Podlaskie Voivodship Tel.: +48 58 32 33 248 Investor Assistance Centre Świętokrzyskie Voivodship Al. Niepodległości 16/18 Podlaskie Voivodship Marshal’s Office Fax: +48 58 30 11 341 61-713 Poznań Investor Assistance Centre www.arp.gda.pl ul. Kard. St. Wyszyńskiego 1 Świętokrzyskie Voivodship Marshal’s Office Contact: 15-888 Białystok Investor Assistance Centre ul. Sienkiewicza 63 Łukasz Filipiak Contact: 25-003 Kielce E-mail: [email protected]

Borys Dąbrowski Contact: Tomasz Telesiński E-mail: [email protected] E-mail: [email protected] Piotr Żołądek Adam Borawski E-mail: [email protected] E-mail: [email protected] Tel.: +48 41 365 81 82 Anna Łohunko E-mail: [email protected] Tel.: +48 85 749 74 95 Tel.: +48 41 365 81 91, Fax: +48 85 749 74 40 E-mail: [email protected] Tel.: +48 61 854 19 73 www.wrotapodlasia.pl/coi Tel.: +48 61 854 14 72 Fax: +48 61 851 53 95

E-mail: [email protected] www.investinwielkopolska.pl

176 177 Regional Investor Assistance Centres

Zachodniopomorskie Voivodship Zachodniopomorskie Voivodship Marshal’s Office Investor Assistance Centre ul. Piłsudskiego 40/42 70-421 Szczecin

Contact:

Paweł Bartoszewski E-mail: [email protected] Tel.: +48 91 446 71 78

Jolanta Kielmas E-mail: [email protected] Tel.: +48 91 446 71 03

Małgorzata Saar E-mail: [email protected] Tel.: +48 91 446 71 02

Magdalena Woźniak-Miszewska E-mail: [email protected] Tel.: +48 91 446 71 56

E-mail: [email protected] Tel./Fax: +48 91 446 71 02 www.coi.wzp.pl

LOT, Headquarters Polish Airlines Warsaw

178 179 V.3. International schools in Poland

Warszawa The British School Early Years Centre ul. Jaroslawa Dabrowskiego 84 American School of Warsaw 02-751 Warszawa, Poland ul. Warszawska 202 Tel.: +48 22 646 77 77 05-520 Konstancin-Jeziorna Fax: +48 22 646 46 66 Tel.: +48 22 702 85 00 E-mail: [email protected]

Meridian International School Lycee Francais de Varsovie ul. Wawelska 66/74 ul. Walecznych 4/6 02-034 Warsaw 03-916 Warszawa Tel.: +48 22 822 15 75 Tel.: +48 22 616 54 00 Fax: +48 22 822 20 13 Fax: +48 22 616 53 99 Email: [email protected] E-mail : [email protected]

International American School Canadian School of Warsaw ul. Dembego 18 ul. Bełska 7 02-787 Warszawa, Poland 02 - 638 Warszawa Tel.: +48 22 649 14 40, Tel.: +48 22 646 92 89 Fax: +48 22 649 14 45 Fax: +48 22 646 92 88 E-mail : [email protected] Middle & High School ul. Stoklosy 3 International European School – Warsaw 02-787 Warszawa - Włochy ul. Wiertnicza 140 Tel.: +48 22 457 24 24 02-952 Warszawa Fax: +48 22 457 23 66 Tel.: +48 22 842 44 48 E-mail: [email protected] Fax.: +48 22 842 44 48 E-mail: [email protected] The British School Primary, Secondary and IB Diploma Programme European Bilingual Preschool ul. Limanowskiego 15 ul. Chłapowskiego 2 02-943 Warszawa 02-787 Warszawa Tel.: +48 22 842 32 81 Tel.: +48 22 644 15 14 Fax: +48 22 842 32 65 Fax: +48 22 644 15 14 E-mail: [email protected] E-mail: [email protected]

180 181 International schools in Poland International schools in Poland

“W stumilowym lesie” day care centre St Paul’s The British International school ul. Naprzełaj 5a of Warsaw 03-092 Warszawa Choszczówka ul. Zielona 14 Kraków Katowice Tel.: +48 697 202 509 05-500 Piaseczno Fax: +48 22 676 68 91 Tel.: +48 22 756 77 97 British International School of Cracow Silesian International Business School E-mail: [email protected] Fax: +48 22 756 26 09 ul. Smoleńsk 25 ul. Bogucicka 3 E-mail: [email protected] 31-108 Kraków 40-226 Katowice World Hill Academy - Szkoła Anglo-Amerykańska Tel.: +48 12 292 64 78 Tel.: +48 32 257 73 37 ul. Okrężna 83 Szkoła Japońska przy Ambasadzie Japonii Fax.: +48 12 292 64 81 [email protected] 02-933 Warszawa w Warszawie E-mail: [email protected] Tel.: +48 22 858 31 91 ul. Kormoranów 7A E-mail: [email protected] 02-836 Warszawa International School of Kraków Tel.: +48 22 643 54 74 Lusina ul. sw. Floriana 57 Łódź American English School S.A. 30-698 Kraków, Poland ul. Rogatkowa 50 Willy Brandt Deutsche Schule Tel.: +48 12 270 14 09 British International School 04-773 Warszawa ul. Chłapowskiego 1 E-mail: [email protected] Pomorska 161 Tel.: +48 22 615 76 49 02-787 Warszawa 90-273 Łódź Tel.: +48 22 644 10 44 Tel.: +48 504 262 731 Ecole Antoine de Saint-Exupéry Fax: +48 22 885 27 90 [email protected] ul. Nobla 16 Gdańsk 03-930 Warszawa Kindergarten and Primary School Tel.: +48 22 616 14 99 British International School Gdansk ul.Demokratyczna 85, Wrocław ul. Jagiellońska 46 93-430 Łódź Happy Montessori House-International 80-366 Gdańsk Tel.: +48 42 681 61 00 Pre-school Wrocław International School Tel.: +48 58 342-26-00 Fax: +48 42 681 61 01 ul. Rumiana 14 ul. Zielińskiego 38 [email protected] E-mail: [email protected] 02-956 Warszawa 53-534 Wrocław Tel: +48 697 06 05 04 Tel.: +48 71 782 26 26 High School no. 3 E-mail: [email protected] Fax.: +48 71 782 26 20 ul. Topolowa 7 E-mail: [email protected] 80-255 Gdańsk Gdynia Tęczowy Ogród Tel.: +48 58 341 06 71 ul. Miłobędzka 2 International School EKOLA Fax: +48 58 341 06 71 High School no. 3 02-634 Warszawa Fundacji Oświatowej EKOLA E-mail: [email protected] ul. Legionów 27 Tel.: +48 22 848 04 35 ul. Tadeusza Zielińskiego 56 81-405 Gdynia E-mail: [email protected] 53-534 Wrocław Tel.: +48 58 622 18 33 Tel./Fax.: + 48 71 361 43 70 Fax: +48 58 622 18 33 Francusko-Polska Szkoła Podstawowa E-mail: [email protected] Poznań E-mail: [email protected] “LA FONTAINE” ul. Wiertnicza 75 Polsko-Niemiecka Szkoła Podstawowa International School of Poznań The American Elementary and Middle School: 02-952 Warszawa ul. Wejherowska 28 ul. Taczanowskiego 18 ul. Lowicka 41, Tel.: +48 22 885 00 20 54-239 Wrocław 60-147 Poznań 81-504 Gdynia Fax: +48 22 885 00 20 Tel.:+48 71 798 26 00 Tel.: +48 61 646 37 60 Tel.: +48 58 664 69 71 E-mail: [email protected] Fax.: +48 71 798 26 01 E-mail: [email protected] Fax: +48 58 664 74 14 E-mail: [email protected] Francusko-Polskie Przedszkole “LA FONTAINE” Poznań British International School ul. Rolna 177 ul. Darzyborska 1A 02-729 Warszawa 61-303 Poznań Tel.: +48 22 885 00 20 Tel.: +48 61 8709 730 Fax: +48 22 885 00 20 Fax: +48 61 8768 799 E-mail: [email protected] [email protected]

182 183 VI. About JP Weber

supporting decision makers About JP Weber

Who we are...

For over 12 years, JP Weber has been supporting international investors in their Poland based 12 years investment-related operations as well as their day- experience in Investments & to-day tax and legal dealings. Moreover, we run a Transactions in Poland multi-language accounts outsourcing business. We support small and medium-sized enterprises, whose owners we assisted in getting a foothold on the Pol- ish market; we also provide services to big international companies. With our experts we guarantee an individual client-oriented as well as comprehensive approach to the Polish market’s business. International Focus with more than of our customers 90% Our philosophy… VI.1.

Single-provider solutions for decision makers are the essence of our philosophy, which constitutes an added value for our Clients while reflecting the Leading Advisor About JP Weber awareness we have of the work we do as well as to Asian Companies in Poland who our recipients are.

Values, way of work and substantive knowledge determine the character of long-term co-operation, which is underpinned by trust and partner-like at- titude guaranteeing individual but also comprehensive approach to issues on the Polish market. Trusted Partner for Polish Champions in Going Global JP Weber Team…

It is our employees who make JP Weber what it is. We take pride in having managed to build a large team of experts and managers who are at all times fully committed to performing their job to our Cli- More than 60 Lawyers, Advisors ents’ satisfaction. Our team consists of more than & Sector Experts in Wroclaw & 60 members, including attorneys at law, tax advi- Warszawa sors, project managers and business advisors. Ex- tensive expertise and experience as well as commitment of our team to find solutions are guarantee for high efficiency and quality of our services.

More than 20 German-speaking Lawyers & Advisors

187 Services Services

Legal Advisory M&A Corporate Finance

We maintain an active presence within international Your Personal Contact We offer cross-border support to buyers and sellers Your Personal Contact markets, building upon our solid reputation with of companies and participating interests, and of- foreign investors and polish companies. Top inter- Ph.D Marcin Dudarski fers accompaniment and support in the course of Grzegorz Piechowiak national standards and highly specialized lawyers Managing Partner splits, spin-offs, mergers, joint ventures and public Managing Partner enable our team to produce quality results for our Attorney at Law sector takeovers. Special importance is attached to Clients. Key success factors are integrity and personal the strategic concept, since it is a question of un- Tel.: +48 (71) 36 99 550 contact. We attach special importance to this, since Tel.: +48 (71) 36 99 559 derstanding unfamiliar markets for the buy-out of Email: [email protected] these two factors, together with clear communica- Email: [email protected] a company, or else of being optimally prepared to tion, are the key to long-term and close cooperation. negotiate a sell-out. We support the attainment of Our internationally experienced lawyers will advise public aid, equity financing as well as other forms Marek Doniec you comprehensively in the following areas: Ph.D Katarzyna Styrna-Bartman LL.M. of financing through extensive cooperation with fi- Project Manager Associate Manager nanciers such as banks, public investors and private ■ Mergers & Acquisition Attorney at law investors and through the professional preparation Tel.: +48 (71) 36 99 555 ■ Company Law of essential financial data. Our main services are: Email: [email protected] ■ Capital Markets Tel.: +48 (71) 36 99 543 ■ Real Estate Email: [email protected] ■ Financial Modeling ■ Labour Law ■ Equity Finance ■ Energy & Infrastructure ■ Local Debt Financing ■ Litigation ■ MBO/MBI/LBO ■ Public Procurement ■ Sell-Side Processes ■ Insolvency Law ■ Buy-Side Processes ■ Contract Law Tax & Financial Advisory Advisory

Tax and financial advisory is long term cooperation. Your Personal Contact JP Weber has established its professional roots via Your Personal Contact We prepare up-to-date implementable solutions for personally accompanying senior decision makers the clarification of tax-related issues. Cross-border in- Mirco Weber through the intricate and complex Polish invest- Jędrzej Piechowiak ternational issues are solved by us in close cooperation Managing Partner ment process and ongoing business activity. Loca- Managing Partner with our international partners. We work pro-actively tion planning, finalization of real estate transac- and clarify for you how to avoid possible double taxa- Tel.: +48 (71) 36 99 550 tions, strategic and operation advisory are standard Tel.: +48 (71) 36 99 550 tion in your individual case or when to prepare trans- Email: [email protected] services provided to our international customers. Email: [email protected] fer pricing documentation. In the course of financial Targets and alternative scenarios need to be clari- advisory, we see ourselves discharging two functions, fied at the outset before any objective decision can that of obeying the basic legal parameters and on the Ewa Czop be taken. We offer our services in the following Łukasz Czajkowski other hand, that of keeping the decision-maker in the Associate Partner main areas: Project Manager company informed at all times, which is of central importance from the companies’ point of view. Tel.: +48 (71) 36 99 550 ■ Strategic Advisory Tel.: +48 (71) 36 99 651 Email: [email protected] ■ Direct Investments Email: [email protected] ■ International Taxation ■ Transaction Services ■ Transfer Pricing ■ Interim Management ■ Tax Optimization Tomasz Gawron ■ Operation Advisory ■ Tax Litigation Associate Manager ■ Restructuring ■ Tax Compliance Tax Advisor ■ IFRS ■ Management Reporting Tel.: +48 (71) 36 99 568 ■ Accounting & Financial Advisory Email: [email protected] ■ Accounting Services We are member of international network M&A Worldwide ■ Payroll Services

188 189 Our focus Our focus

Language Desks Cross Practices

International Clients require international standards. Over 90% of our Clients run businesses involving for- Since 2001, we have supported decision makers in all phases of their Poland-based operation – from establish- eign capital. Due to that all of our departments operate within the framework of language-oriented teams, ment of the company, through comprehensive investments or transactions. which provide interdisciplinary services to our Clients. There are currently four Language-Desks at JP Weber, whose names reflect our most important Clients’ countries of origin: All of our projects are carried out within interdisciplinary teams specializing in tax, legal or business-related areas and matched to the industries. Our interdisciplinary fields of specialization entail the following:

Korean Desk German Desk

Many Korean companies choose to set up business In order to reflect the commercial relations between or outsource certain operations to Poland. Our Ko- Germany and Poland, we have expanded our ad- rean Desk is committed to support Korean produc- visory through German Desk. Our German Desk GRANTS & RESTRUCTURING REAL ESTATE tion companies to start and successfully develop consists of more than 20 interdisciplinary experts INCENTIVES their investment projects and also adapt to chang- who are partners in new investments, Mergers & ing market conditions. Acquisitions, but also in phases of the turnaround as well as in ongoing activities in Poland. Your Personal Contact Your Personal Contact Ph.D Marcin Dudarski Managing Partner Mirco Weber Attorney at Law Managing Partner

Tel.: +48 (71) 36 99 559 Tel.: +48 (71) 36 99 654 Email: [email protected] Email: [email protected] DOING BUSINESS PUBLIC–PRIVATE TRANSACTION IN POLAND PARTNERSHIP ADVISORY SERVICES

French Desk Polish Champions

Team members from our French Desk represent the Polish enterprises must also meet various chal- highest standards dedicated to our Francophonic lenges which are inherent in foreign expansion. In Clients, including local language knowledge or such cases, our many years’ experience with foreign long-standing experience in manufacturing & real companies allows us to effectively restructure and estate and such competencies as Mergers & Acqui- optimize Polish enterprises as well as support their ENERGY & MEDICAL & SERVICES & BPO sition and restructuring. international projects. INFRASTRUCTURE HEALTH CARE Your Personal Contact Your Personal Contact

Jędrzej Piechowiak Grzegorz Piechowiak Managing Partner Managing Partner

Tel.: +48 (71) 36 99 557 Tel.: +48 (71) 36 99 556 Email: [email protected] Email: [email protected]

190 191 Business News I Legal & Tax Regulations I EU Funds I Investment Opportunities Young, Educated and with Quality of Life

JP Weber Newsletter Invest in Wroclaw Always up to date with Poland Joint Promotion of economic development & Innovative Portal

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196 197 Investor’s Guide  Poland How to do Business

Investor’s Guide  Poland How to do Business

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2013