The Polish Investment Zone: Benefits for Investors

The Polish Investment Zone is a key tool in Poland’s economic development strategy. The aim of this project is to attract investment, both domestic and foreign, and to support entrepreneurship, innovation and technological development.

The Polish Investment Zone was established pursuant to the Act of 10 May 2018 on supporting new investments. Thanks to this support instrument, tax exemptions are available throughout the country, and not only in designated SEZ subzones, as before. Today, the entire country is divided into 14 areas governed by Zones. Thanks to this, the Responsible Development Strategy was implemented, which is conducive to the sustainable development of the entire country. Currently, the vast majority of Polish Investment Zone investments are located outside the former Special Economic Zones (SEZ).

Origins of Special Economic Zones

The history of Special Economic Zones dates back to the 1990s, when Poland was going through a process of economic transformation. The first SEZ Act was passed in 1994. Over time, this model has evolved, leading to the establishment of the Polish Investment Zone in 2018 – a modern instrument supporting investments on the Polish market.

The reasons for the creation of SEZs and their evolution within the Polish Investment Zone are multidimensional. The key objective was to attract foreign and domestic investors, stimulate economic growth and create new jobs.

The zones were established in order to accelerate the economic development of individual areas, in particular through the development of specific areas of economic activity, the development of new technical and technological solutions and their use in the national economy. The focus was on the development of exports, increasing the competitiveness of manufactured products and services, the development of existing industrial assets and economic infrastructure, the management of unused natural resources while maintaining the principles of ecological balance, as well as maintaining old jobs and creating new ones.

Originally, SEZs were intended to decentralise investments and rescue the Polish economy in the difficult period of political transformation by increasing Poland’s competitiveness in the international arena. The instrument, which is currently the Polish Investment Zone, thanks to the abolition of the “regionalization” of SEZ operations, allows investors to benefit from income tax exemptions anywhere in Poland. It provides for the possibility of granting tax exemptions for all investments in Poland for a period of 10, 12 or 15 years, provided that they meet certain eligibility criteria.

Tasks of Special Economic Zones operating within the Polish Investment Zone

The main tasks of SEZs within the Polish Investment Zone include attracting investments, developing infrastructure, creating conditions for the development of entrepreneurship and promoting innovation. They also focus on sustainability, committing to environmental protection and corporate social responsibility. In accordance with the Act on Supporting New Investments, SEZs operate indefinitely. They offer investors attractive investment areas, support in the investment process and post-investment care. 

Benefits for investors

In addition to geographical and economic factors, i.e. the possibility of obtaining an exemption from income tax throughout the country, the authors of the “Polish Investment Zone” report have diagnosed a number of other advantages that  investors can apply for under the Polish Investment Zone. These are:

• purchase of land prepared for investment;
• obtaining an exemption from real estate tax in some municipalities;
• extended income tax exemption period for locations covered by SEZs under the existing rules;
• the possibility of combining the main benefit of operating in a SEZ, i.e. income tax exemption, with other forms of support, such as government investment grants, subsidies from district labour offices or EU funds;
• the possibility of using the existing technical and scientific and research facilities, which are offered by SEZ managers in cooperation with local governments;
• the possibility of cooperation with other companies investing within the same SEZ;
• common access to an ecosystem that supports manufacturing companies with a similar profile, e.g. better coverage of a given location by companies involved in the recruitment of employees, suppliers and maintenance of machines, companies certifying production, etc.;

SEZ managers also offer their knowledge and assistance in the day-to-day functioning of entrepreneurs as part of the “decisions on support” issue

Sectors and impact on the economy

Special Economic Zones operating within the Polish Investment Zone cover a wide range of sectors of the economy. From manufacturing industries, through high-tech services, to modern fields such as research and development or renewable energy. As a result, these zones are conducive to the diversification of the economy, which strengthens its stability and competitiveness.

The activities of Special Economic Zones have a significant impact on the national and regional economy. The zones carry out the task set before them in the Act, which is  the decentralisation of investments, the development of local infrastructure and the creation of new jobs. Due to the fact that they operate throughout the country as part of the Polish Investment Zone, they also support its steady development.

Challenges and prospects

Despite the numerous benefits, investing in Polish Investment Zone also comes with some challenges. The need to maintain competitiveness (also in terms of acquiring and maintaining qualified workforce), effective management of the investment process and the need to prepare and implement a long-term strategy are issues that require attention. Nevertheless, the outlook is promising, and special investment zones can play a  positive key role in the country’s long-term economic growth.

Sources:

• Report „Polska Strefa Inwestycji” – Colliers International, PAIH, E&Y,
• Polska Strefa Inwestycji i Specjalne Strefy Ekonomiczne w Polsce – E&Y,
• Nowe Rozporządzenie regulujące działalność w Polskiej Strefie Inwestycji – Deloitte

Substantive consultation: Mirosław Odziemczyk, Plenipotentiary of the Management Board of the Polish Investment and Trade Agency for Cooperation with Special Economic Zones.