Foreign Investment Department - PAIiIZRīga, August 27, 2008
Distribution channels and business opportunities in Poland
Business in Poland - introduction Basic principles for LatvianentrepreneursPolish-Latvian Economic CooperationForms of conducting businessForms of conducting business activityactivityTaxationTaxation ((entrepreneursentrepreneurs))Location for Your businessPurchasePurchase ofof realreal estateestate by by foreignersforeignersLabour CostsDistribution channelsInvestment Incentives in PolandAbout PAIiIZInformationPoland - strenghts
Warsaw
Business in Poland - introductionArea: 312 th. km2 - 9th in Europe, 63rd in
the world
Population: 38.5 million - 8th in Europe, 30th in theworld
Number of students: 2 million
Currency: Polish Zloty (EUR 1 ≈ PLN 3.2)
• Large domestic market
• Young and well-
educated workforce
• Central location in
Europe
• Perspectives for
dynamic economic
development
• International legal and
business standards
Equal treatment for domestic entrepreneurs & nationalsresiding or established in the territory of the European Economic Area (EEA)
Foreign investors from EU, EEA and EFTA member states are authorized toconduct economic activity under the same regulations as
Polish entrepreneurs
Basic principles for Latvian entrepreneurs
Polish-Latvian Economic Cooperation
Latvia – 21 on the list of Polishexport partners (0,78%, share)
Poland is 5th import partner of Latvia !!!(7% share)
Latvia 47 on the list of Polish import partners (0,1% share)
Export to Latvia
Source:Ministry of Economy - Poland
Import from Latvia
(2006)
(2006)
Polish-Latvian turnoveris growing !!!
Turnover (in mln EUR)
8,7 mln EUR – total worth of Polish FDI in Latvia in 2007 (Bank of Latvia)
1,4 mln EUR – total worth of Latvian FDI in Poland in 2007 (Bank of Latvia)
Foreign Direct Investments:
Source: Ministry of Economy - Poland
Forms of conducting businessForms of conducting business activity activity Companies:
– Limited Liability Company– Joint-stock Company
Partnerships:– Registered partnership (only EEA)– Professional partnership (only EEA)– Limited partnership– Limited joint-stock partnership– Civil partnership (only EEA)
Entry in the Business Activity Register (Private enterprise) (only EEA)
Representative OfficeBranch Office
Limited LiabilityCompany(Spółka Z.o.o.)
established by one or more individuals or legal persons/shareholders are not liable for the company’s obligations, they bear a risk up to the value of shares contributed/minimum capital: 50 000 PLN (15 600 EUR)
Registeredpartnership(Spółka jawna)
minimum of two individuals or legal persons/each partner is liable without limitation to the extent of his or her entire property/no minimum capital
Entry in theBusiness ActivityRegister (Wpis do ewidencji działalności gospodarczej)
Individual founder/ for small business/ entrepreneur is liable for his or her debts and obligations with his or her entire property/Entry in the Business Activity Register maintained by the head of a commune (wójt), the mayor of a town or the president of a cityno minimum capital
RepresentativeOffice(Przedstawicielstwo)
advertising and promoting the business/ entry in the Register of Representative Offices of Foreign Entrepreneurs (Ministry of Economy) Entry fee: 6 713 PLN (2 000 EUR)
Branch Office(Oddział)
Part of a foreign company. No own legal personality; May conductbusiness activities from the moment of entry into the National CourtRegister. 1000 PLN registration fee + 500 PLN publication cost inOfficial Commercial and Legal Gazette
Selected forms of conducting business (SME)
EstablishingEstablishing a business a business activityactivity-- stepstep--byby--stepstep
Signing the company’s Statut (only for limited liability company and joint-stock company) and arranging for an official adress of the company
Registration of the company in the National Court Register - KRS(registration should be effected the District Court which has jurisdiction over the district in which the company will have its official address); 14 days; PLN 1000 registration fee + 500 PLN publication cost in Official Commercial and Legal Gazette (Monitor Sądowyi Gospodarczy)
Application to the Central Statistical Office for Statistical Identification Number –REGON; 1 day; no charge
Application to the Tax Office for the Taxpayer Identification Number – NIP(Tax Office appropriate for the company’s official address) 3-4 weeks; 21 PLN (stamp duty for the NIP number certificate)
Notifying the Social Insurance Institution i.e. ZUS. 1 day, no chargeSuch an obligation arises after employment of the first employee
Receiving required permissions or licenses
Registration in the Tax Office as a VAT remitter 1 day; 170 PLN (stamp duty for the VAT registration)
Notifying the National Labour Inspectorate 1 day; no charge
Notifying the Chief Sanitary Inspectorate 1 day; no charge
Opening an account at a Polish bank (according to Polish law, every business entity must have an account at a Polish bank) 1 day
Nature of Procedure (2006) Duration in days
Notarize company agreement 1Deposit capital at the bank 1Apply for REGON number 1Register for tax number 24Register for VAT 1*Register at Register of Entrepreneurs 14*File amended application for "REGON" number 1
Register for National Work Inspection 1Register for national sanitary inspection 1Register for social security 1Total: 31* This procedure runs s imultaneous ly with previous procedures . Source:World Bank, Doing Business 2008
Short time needed to start a business
05
101520253035404550
Estonia Latvia Lithuania Russia Poland Spain
31 days
Efforts to implement‘one-stop shop’ policy
TaxationTaxation ((entrepreneursentrepreneurs))Corporate Income Tax (CIT) 19%
Personal Income Tax (PIT) 19% 30%40%
Value Added Tax (VAT)-basic rate – 22%-reduced rates – 7%, 3%-export rate – 0%
RET Max. tax limits in 2008 are: 19.01 PLN/sq.m. for buildings, 0.71 PLN/sq.m. for land and 2% of construction value. In each commune tax rates are set by local authoritiesRoad vehicle tax Imposed only on trucks and buses
15%19% 21% 22% 24% 25%
0%5%
10%15%20%25%30%
Lith
uani
a
Pol
and
Cze
chR
epub
lic
Est
onia
Rus
sia
Ukr
aine
Starting from January 1 2009 the tax rates will be as follows:18% up to income in amount of 85.528 PLN32% above 85.528 PLN
Location for Your business
0 50 100 150 200 250 500 1000 3000 5000
Population per 1 sq km by poviats Big cities & academic centres
Industry in Poland
coal miningenergymetallurgy machinerychemicalconstructionwood/wooden productsfood-stuffs
Population - 38,5 mln
42 cities of over 100 000 inhabitants
14 Special Economic Zones
PurchasePurchase ofof realreal estateestate by by foreignersforeignersType of real estate Entrepreneurs from European
Economic Area (EEA) countriesEntrepreneurs from outside of European Economic Area
Land for business activity
No permit required permit of the Ministry of Interior and Administration required (with exeptions)
Farmland and forests Permit required until 1st May 2016 (unless the person is a leaseholder for 3-7 years and personally conducts agricultural activities)
permit of the Ministry of Interior and Administration required
Second house Permit required until 1st May2009 (unless living in Poland for 4 years or owning "second house" for business activities in tourism)
permit of the Ministry of Interior and Administration required
Self-contained apartment No permit required no permit required
Taking over a company owning/leasing a real estate
No permit required permit of the Ministry of Interior and Administration required
Source: Central Statistical Office
Average wages in PLN (June 2008)
Mazovian (Warsaw) Wielkopolskie (West)Lubelskie (East)3934PLN
(1200 EUR)2713PLN(840 EUR)
2922PLN(913 EUR)
Regional breakdown (chosen voivodships)
National3215 PLN
(1000 EUR)
Labour Costs
Wages comparing with Western European standards createcompetitive advantage
Source: Eurostat
Average nominal wagegrowth (in %) - forecast
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004 2005 2006 2007 2008
PolandCzech RepublicSlovakiaHungary
Source: EIU
Wages in Poland grow slower than in neighbouring countries !!!
SocialSocial security systemsecurity system
Type of insurance % premium Breakdown of premium
Employer Employee
Retirement 19.52% of remuneration 9.76% of -remuneration
9.76% of remuneration
Disability 6% of remuneration 4.5% 1.5%
Accident - from 0.67% to 3.60% of remuneration depending on occupational risk in a given industry
0.67% - 3.60 %
Sickness 2.45% of remuneration - 2.45%
Additional contributions:Labour Fund 2.45% of remuneration 2.45% -
Guaranteed Employee Benefit Fund
0.10% of remuneration 0.10% -
Total Between 17.48% -20.41%
13,71%
Distribution channels
•Supermarkets, hypermarkets and discount chains have failed to assume a dominating role in the sector, but they have advantage in terms of logistics and know-how.
•Integration of small stores
FMCG
Household appliancesElectronics
Construction materialsFurniture
Press
Wholesale firms http://www.hurtownie.net.pl/http://www.hurtownie.pl
Source: E-commerce report 2007 Internet Standard, Sklepy24.pl (Media&Marketing Apr 16, 2008)
Goods sold in Polish Internet (% of respondents)
1,75 % e-trade's share in Polish retail trade market(0,68% in 2005)
E-TR@DE
Investment Incentives in Poland
• Corporate Income Tax exemptions in 14 Special Economic Zones until2017, min. worth of investment – 100 000 EUR
• Real Estate Tax exemptions
• Instruments of Labour Market
• EU Funds (67 billion EUR) 2007-13
Regional Aid Limits
May be combined together but cannot exceed certain limit !!!
Regional Aid Limits in Poland
30%-50% of eligible expenditures
Eligible exenditures:
•Cost of land, buildings, licences etc.
or
•Two year labour costs of new employedstaff
Micro and small entrepreneurs –additional20% of supportMedium entrepreneurs – additional 10% ofsupport
The investment or each newly created job must be maintained for at least 5 yearsfrom the date of its completion/creation (for MSP only 3 years !!!)
ServicesServices Promotion of PolandPromotion of Poland InformationInformation
•PM team with sectoralexpertise•Network of regionaloffices (Regional Investor Assistance Centres)•Co-operation withSEZ’s, central, localauthorities•Testimonial visits withinvestors•After care services
•PM team with sectoralexpertise•Network of regionaloffices (Regional Investor Assistance Centres)•Co-operation withSEZ’s, central, localauthorities•Testimonial visits withinvestors•After care services
•Co-operation withPolish Embassiesabroad•Point of contact for information and advice
•Co-operation withPolish Embassiesabroad•Point of contact for information and advice
•Investment climate•Incentives system•Statistics•Sectoral statistics•Potential cooperationpartners
•Investment climate•Incentives system•Statistics•Sectoral statistics•Potential cooperationpartners
Govermental agency formed in June 2003 as a successor of theformer investment promotion agency PAIZ
Operations
Area of services
About PAIiIZ
Short list Short list of countries, choice of
locations, detailed legal and financial analysis, investment incentives system’s analysis,
negotiations with central and local authorities, finding the potential
partners
Investment decision
Long list of countriesAnalysis of macroeconomic, social and
political conditions of the countries, general legal and financial analysis
including investment incentives system, fact finding missions
Considering of investmentStrategic corporate decision regarding new
investment, destination of investment
• Project Managers assistance• Site visits offered to investors• Providing macroeconomic and sectoral data, information on financial incentives offered by central and local governments, Special Economic Zones and EU funds
• Assistance in obtaining financial support from the state government• Co-operation with Special Economic Zones• Date base of suppliers and business partners• Network of Regional Investor AssistanceCenters• Real estate data base
• After-care services• Ombudsman for foreign investors
• Promotion of Poland through marketing campaigns, investment seminars, work-shops, study tours• Investment marketing, company visits• Co-operation with Polish Embassies abroad
Investment process Agency’s offer
InformationPolish Chamber of Exhibition Industryhttp://www.polfair.com.pl/
Embassy of the Republic of Poland in LatviaEconomic Sectionhttp://www.poltrade.lv/tfpp.php
Polish Export Promotion Portalhttp://www.eksporter.gov.pl/ppe/glowna
Polish Information and Foreign Investment Agency (Incentives)http://www.paiz.gov.pl
The Polish Agency for Enterprise Development (EU Funds) http://en.parp.gov.pl/
Wholesale Portal http://www.hurtownie.net.pl http://www.hurtownie.pl
Poland - strenghts
We invite you to our website
Marta KokoszkaProject Manager
[email protected]. Bagatela 12
00 – 585 Warszawa