Investor’s Guide – Poland How to do Business Edition 2009 www.paiz.gov.pl www.jpweber.com LEGAL NOTICE EDITION 2009 This guide presents an overview of the Polish ISBN: 8-60049-69-6 legal system and business environment. We intended it to provide a general outline of the © Copyright by PAIiIZ and JP Weber Dudarski Sp. k. topics mentioned above and believe that all the information is correct on the day of writing and Polish Information and Foreign Investment printing. Please bear in mind that Polish law Agency (PAIiIZ) is changeable, especially taxation regulations (Polska Agencja Informacji i Inwestycji once in a fiscal year. Zagranicznych SA) ul. Bagatela 12 We would like to emphasise firmly to the 00-585 Warsaw readers that the information in this guide is not tel.: +48 22 4 98 00 professional advice and should not be treated fax: +48 22 4 99 99 as a substitute for legal, tax or business advice. [email protected] The investor should seek professional advice www.paiz.gov.pl before making any legal, tax or investment decision. JP Weber will be pleased to discuss JP Weber Dudarski Sp. k. specific problems. Member of JP Weber Group ul. Rynek 9/40 JP Weber Group companies, Polish Information 50-102 Wroclaw and Foreign Investment Agency and the co- tel.: +48 71 6 99 60 authors in person reserve that they cannot be fax: +48 71 6 99 69 held responsible or liable for any damages (or [email protected] losses) that may arise with regard to action www.jpweber.com taken or not taken in accordance with the information presented in this guide. 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 investors and entrepreneurs wishing to 16 years. Its mission is to increase Foreign directly invest within Poland. Throughout the Direct Investment (FDI) by encouraging investment process, we offer professional international companies to invest in Poland. support for international companies and senior PAIiIZ guides investors through all the necessary decision makers ensuring that their corporate administrative and legal procedures along the responsibility is maintained throughout their way to setting up their business. activities in Poland. Agency: Boasting more than ten years of investment experience, our proven track record has enabled helps investors to enter to the Polish market, us to evolve into a trusted business partner provides quick access to the complex for numerous demanding customers. Cultural information relating to economic and legal awareness is a cornerstone of our business environment, strategy, enabling our team to fully integrate helps in finding a convenient investment with our customers, ensuring that customer location and obtaining investment experience remains a positive benchmark incentives, for JP Weber. Our teams are comprised of advises in each phase of the investment interdisciplinary and multilingual experts, process, specializing in fields such as law, tax, financial helps finding the appropriate partners and accounting and project management. suppliers as the new locations, supports firms already active in Poland. JP Weber´s core competencies comprise: Agency’s mission is also to create a positive JP Weber Investments JP Weber Advisory image of Poland across the world, to promote Direct Investments Legal Services Polish goods and services abroad by organizing Merger & Acquisitions Tax Advisory conferences, seminars, exhibitions, workshops Corporate Finance Financial and study tours for foreign journalists. Accounting In order to provide the investors with the best Within GMN International, we work with possible service a network of Regional Investor world renowned accounting firms from over 35 Service Centers has been established across countries globally, enabling JP Weber to gain Poland. Their goal is to improve the quality of best practice leaning´s, as well as benefits from a region’s investor services as well as to provide a solid base of international professionals. an access to the latest information - such as, the investment offers and regional micro-economic data. These Centers hire professionals that have been trained by PAIiIZ and are financed by local authority funds. 4 Investor’s Guide – Poland How to do Business 7 INDEX I. Introduction 17 II. Preparing for Business 19 – the most underlining facts about Poland II.1. Political & Legal Stability 21 II.1.1. Political system 21 II.1.1.1. The Parliament 21 II.1.1.2. The President 22 II.1.1.3. The Supreme Chamber of Control 22 II.1.2. Government administration 23 II.1.3. Poland International 25 II.1.3.1. Poland in the European Union 25 II.1.3.2. Poland´s Single Market 25 II.1.3.3. Poland and the Monetary Union 26 II.1.3.4. International organisations 26 II.1.4. System of justice 28 8 9 INDEX II.2. Domestic Market 31 II.5.2. Stock exchange and capital market regulations 70 II.2.1. Population and language 31 II.5.2.1. Warsaw Stock Exchange 71 II.2.2. Macroeconomic Indicators 32 II.5.2.2. Financial Supervision 72 II.5.2.3. Acquisition of material blocks of shares 73 II.2.2.1. Gross Domestic Product 32 II.5.2.4. Venture Capital Funds 74 II.2.2.2. Consumer Price Index 34 II.5.3. Insurance Regulations 74 II.2.2.3. Foreign trade 35 II.2.2.4. Local cost effectiveness 37 II.2.3. Tourism 38 II.6. Infrastructure 77 II.6.1. Transport 77 II.3. Resources & Industry Clusters 43 II.6.1.1. Road System 77 II.3.1. Geographic location and climate 43 II.6.1.2. Railways 78 II.6.1.3. Air transport 79 II.3.2. Natural Resources 44 II.6.1.4. Waterways 80 II.3.2.1. Coal & lignite 44 II.6.2. Telecommunication 80 II.3.2.2. Oil & Gas 46 II.3.2.3. Other deposits 46 II.6.2.1. Telecommunications Systems 80 II.3.2.4. Crops & Livestock 48 II.6.2.2. Density and connection lease market 81 II.6.2.3. Data transmission system and density 83 II.3.3. Energy Sector 49 II.3.4. Industry Clusters 50 III. Setting up business 87 - get to know about the first steps to be taken II.4. Labour Market 55 II.4.1. Education 55 III.1. Incorporation 89 II.4.1.1. The education system 55 III.1.1. Conducting business activities 89 II.4.1.2. Special education 59 III.1.2. Limited Liability Company 90 II.4.1.3. Teachers 59 II.4.1.4. Scientific and R&D 60 III.1.3. Joint-stock Company 92 III.1.4. Other corporate entities 93 II.4.2. Human resources 61 III.1.4.1. Civil partnership 93 II.4.2.1 Employment and Labour force 61 III.1.4.2. General partnership 93 II.4.2.2 Unemployment 63 III.1.4.3. Limited partnership 93 II.4.2.3 Salaries 65 III.1.4.4. Professional partnership 94 III.1.4.5. Limited joint-stock company 94 III.1.4.6. Sole proprietorship 94 II.5. Financial Centre 69 III.1.4.7. Branch office 94 III.1.4.8. Representative office 94 II.5.1. Banking and financial institutions 69 III.1.4.9. European Company 95 II.5.1.1. The National Bank of Poland 69 III.1.4.10. European Economic Interest Grouping 95 II.5.1.2. Commercial banks 70 III.1.5. Establishing and registering an entity 95 10 11 INDEX III.2. Taxes 99 IV.1.2.1. Warehouse & industrial market 144 IV.1.2.2. Office market 145 III.2.1. General Overview 99 IV.1.2.3. Retail and commercial market 146 III.2.2. Taxation of company 100 IV.1.3. Acquiring real estate 147 III.2.2.1. Income Tax 100 IV.1.4. Investment process 150 III.2.2.2. Value Added Tax 104 III.2.2.3. Tax on civil law transaction 106 IV.1.4.1. Analysis 150 III.2.2.4. Custom and Excise tax 106 IV.1.4.2. Step-by-step investment process 150 III.2.2.5. Duty-free zones 107 III.2.2.6. Customs bonded warehouse 108 III.2.2.7. Local taxes 109 IV.2. M&A 155 III.2.2.8. Stamp duty 110 IV.2.1. The Polish M&A market 155 III.2.3. Taxation of individuals 110 IV.2.2. Regulations governing M&A 156 III.2.3.1. Personal Income Tax 110 III.2.3.2. Inheritance and donation tax 112 IV.3. Public Private Partnership (PPP) 157 IV.4. Important Regulations 161 III.3. Investment Incentives 115 IV.4.1. Polish trade regulations 161 III.3.1. EU Structural Funds 2007 - 2013 115 IV.4.1.1. Import/export licensing 161 III.3.2. Special Economic Zones (SEZ) 120 IV.4.1.2. Customs tariffs 161 III.3.3. Labour market instruments 122 IV.4.1.3. Customs procedures 162 III.3.4. OECD Guidelines for Multinational Enterprises 123 IV.4.2. Currency and exchange controls 163 IV.4.3. Competition law 163 III.4. Accounting & Finance 127 IV.4.4. Regulations for entering into contract 165 III.4.1. Accounting and financial regulations 127 IV.4.5. CO2 Emission Allowances 165 III.4.2. Financial statements 128 III.4.3. Audit and publication 129 IV.5. Securing Business 169 IV.5.1. Property rights 169 III.5. Employment of Staff 131 IV.5.1.1. Patent legislation 169 III.5.1. Employment of workers 131 IV.5.1.2.