Poland flag Poland: Investing in Poland

Foreign direct investment (FDI) in Poland

FDI in Figures

Poland figures among the most attractive countries in Europe in terms of FDI. According to UNCTAD's 2021 World Investment Report, FDI inflows to Poland remained stable in 2020, reaching USD 10 billion, in line with the USD 10.8 billion recorded a year earlier, despite the outbreak of the Covid-19 pandemic which caused a contraction of 42% of global FDI. Total investment stocks in the country stood at USD 236.5 billion in 2020. Poland ranked fifth globally in terms of the value of greenfield projects announced in the same year, for a total of USD 24.3 billion (UNCTAD). Major projects include the construction of a cloud region in Poland by Google for USD 1.8 billion. Poland is the first largest recipient of FDI inflows in Central Europe. The majority of stocks are held by the Netherlands, Germany, Luxembourg and France, with investments directed mainly towards the manufacturing, financial and insurance activities, wholesale and retail, and real estate sectors. In addition, data from the past few years showed a high percentage of investors coming from China and South Korea. According to the latest figures from OECD, in the first half of 2021 FDI inflows to Poland totalled USD 12.3 billion, up by 27.4% compared to the same period one year earlier (when FDI inflows stood at USD 9.6 billion).

Poland’s main assets are its strategic position, a large population, its European Union membership, economic stability, cheap skilled labour costs and a fiscal system attractive to businesses. Moreover, Poland has a number of dynamic Special Economic Zones, and the government founded the Polish Investment and Trade Agency (PAIZ) to improve conditions for FDI. Under the 2021-2027 EU budget, Poland will receive USD 78.4 billion in cohesion funds as well as approximately USD 27 billion in grants and USD 40 billion in loan access from the EU Recovery and Resilience Facility. However, Polish law limits foreign ownership of companies in selected strategic sectors and restricts acquisition of real estate, especially agricultural and forest land. Furthermore, a new law came into force giving the President of the Office for Competition and Consumer Protection the authority to review FDIs by non-EEA and non-OECD investors on the grounds of public security, order and health. Overall, the Polish business climate is good and the World Bank ranks Poland 40th out of 190 countries in its latest Doing Business ranking, seven positions lower compared to the previous edition.

 
Foreign Direct Investment 201820192020
FDI Inward Flow (million USD) 15,99610,85310,080
FDI Stock (million USD) 229,527234,925248,732
Number of Greenfield Investments* 445448465
Value of Greenfield Investments (million USD) 18,22024,46224,299

Source: UNCTAD, Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 
Country Comparison For the Protection of Investors Poland Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 7.0 7.5 7.0 5.0
Index of Manager’s Responsibility** 2.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 9.0 6.8 9.0 5.0

Source: Doing Business, Latest available data

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

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What to consider if you invest in Poland

Strong Points

Strong points for FDI in Poland:

  • Growing economy
  • Central geographical location in the heart of Europe
  • Multilingual workforce, qualified, able to export trades (at a low cost) and whose productivity is growing rapidly
  • Stable banking sector and a controlled currency
  • A healthy and resilient economy even during economic crises
  • Unlike other Central European countries, its population does not face over-indebtedness.
Weak Points

Disadvantages for FDI in Poland:

  • Rigidity of the labour market
  • Slow administrative procedures (120th country for the speed of starting a business according to the World Bank)
  • Current account in deficit 
  • The adoption of the euro initially planned for 2012 has been jeopardised by the financial crisis, thereby delaying its beneficial effects on the economy.
  • The relatively unstable political landscape slows down the implementation of necessary reforms.
Government Measures to Motivate or Restrict FDI
Poland’s well-diversified economy reduces its vulnerability to external shocks, although it depends heavily on the EU as an export market. Poland is one of the most attractive locations for foreign investments.

Regional aid is the most popular type of aid for companies carrying out investment projects in Poland. It is granted only for “initial” or “new” investments, which are generally defined as investments related to: setting-up of a new establishment; extension of the capacity of an existing establishment; diversification of the output of an establishment into products not previously produced. The maximum level of aid a project can receive depends on the size of the company and where in Poland the project is to be located.

Regional aid available in Poland can be granted in different forms, such as corporate income tax (CIT) exemption in so-called special economic zones (SEZ), government grants (support from domestic budget) and cash grants or loans from EU funds.
The government grant (Multi-Annual Support Programme – MASP) is a regional aid scheme financed by the Polish government and dedicated to supporting large investments in the so-called “priority sectors”: automotive, electronics, aviation, biotechnology, modern services (particularly IT centres, BPOs and telecommunications) and R&D;
In the case of companies registered in Poland, cash grants from EU funds can be obtained for R&D, including: Innovative new investments, which use new technologies; Energy efficiency projects; Production of energy from renewable sources.
State aid can be granted for R&D projects that carries out fundamental research; industrial research or experimental development. Entrepreneurs conducting activities in the area of research and development may benefit from an income tax relief.

Poland does place limits on foreign ownership and foreign equity for a limited number of sectors.  Polish law limits non-EU citizens to 49 percent ownership of a company’s capital shares in the air transport, radio and television broadcasting, and airport and seaport operations sectors.  Licenses and concessions for defense production and management of seaports are granted on the basis of national treatment for investors from OECD countries. The Law on Freedom of Economic Activity (LFEA) requires companies to obtain government concessions, licenses, or permits to conduct business in certain sectors, such as broadcasting, aviation, energy, weapons/military equipment, mining, and private security services.

In May 2020, the Polish government approved regulations aimed at making it difficult for investors from outside the European Union to take over at low cost companies that Poland considers strategic to its economy. The regulations are part of a government rescue package worth more than PLN 300 billion to help the country survive the new coronavirus pandemic and the resulting economic crisis.

The Polish Investment and Trade Agency (PAIH) supports both the foreign expansion of Polish business and the inflow of FDI into Poland.
Bilateral investment conventions signed by Poland
Poland has signed more than 60 bilateral investment treaties. For more details consult this link.

Find out more about Investment Service Providers in Poland on GlobalTrade.net, the Directory for International Trade Service Providers.

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Latest Update: May 2022

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