Invest in Poland

Investment climate for foreign investors

Mieszko Pilecki Business Development Manager Foreign Trade Office in Mumbai 31 October 2018

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Polish Investment and Trade Agency (PAIH) One-stop-shop for all FDI needs

Considering of investment • Marketing campaigns, investment seminars,

work-shops, study tours

• Direct presence on foreign markets through Trade Offices

• Cooperation with Polish Embassies

Long list of countries • Dedicated project manager’s assistance

• Location Advisory (including site visits)

Short List • Assistance in obtaining financial support from

the state government

• Cooperation with SEZs, data base of agencies (real estate, HR, legal), business partners and suppliers

• Database of agencies (real estate, HR, legal), business partners and suppliers

Investment • Post-investment services

• Ombudsman for foreign investors

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PAIH’s Foreign Trade Office in Mumbai One-stop-shop for Indian import-based and distribution-based businesses for Polish products & services

Country-specific information • Information on products available

for import to India

• Information on the regulations governing import of goods and services from Poland

Finding a right partner • Dedicated assistance associated

with finding right trade partners

• Partner’s verification services

• Facilitation services

Foreign Trade Offices of the Polish Investment and Trade Agency (PAIH) at a glance: • global, constantly developing network • responsible for providing support for Polish

exporters and investors who look for new business opportunities overseas

• focused on distant markets of rapid growth with the biggest business potential for Polish companies

• currently over 60 locations of PAIH’s Foreign Trade Offices in the world

• Mumbai’s Foreign Trade Office expected to launch by Q1 2019

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Why Poland? Highlights of the presentation

Highly skilled and young labor force 26.5 million inhabitants under the age of 55

Healthy unemployment level of 5.9%

Quickly developing infrastructure Over 1100 km high-speed roads under construction

4th longest road network in Europe

Business friendly environment 1st place in the CEE region –

the most attractive country to establish operations

Katowice SEZ - best free zone in Europe in 2015, 2016 and 2017 Łódź SEZ best free SMEs zone in Europe in 2017 Poland has advanced in Doing Business ranking by 47 positions since

2012

Big internal market 6th biggest country in the EU (area, population)

Unlimited access to the EU market of 510 million inhabitants

Academic hub 1.35 million students and

365 thousand graduates each year

Attractive incentives system Poland: Investment Zone Government Grants for strategic projects

50% public aid intensity in Eastern Poland

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Source: National Bank of Poland, Central Statistical Office, May 2018

Strategic location in the heart of Europe Basic information about Poland

Warsaw

Bratislava

Budapest

Prague

Berlin Kiev

Vilnius

Minsk

GDP per capita (PPP)

27 764 USD

CIT 19% PIT 18%, 32% VAT 0%, 5%, 8%, 23%

Tax rates

Polish Zloty (PLN) 1 EUR ~ 4.3 PLN 1 USD ~ 3.7 PLN 1 GBP ~ 4.9 PLN 1 PLN ~ 16-19 INR

Currency

Population 38.5 mn (6th in EU)

Area 312 700 sq km (6th in EU)

2nd Lowest median age in CEE (39.6)

6 Source: Transparency International; Corruption Perception Index; 2011-2016; Doing Business 2012-2018, World Bank

Simplifying doing business According to Transparency International & World Bank

Hungary, 57

Lithuania, 38

Czech Republic, 47

Poland, 29

Bulgaria, 75

Slovakia, 54

Romania, 57

United States, 18

France, 23

10

20

30

40

50

60

70

80

90

2009 2010 2011 2012 2013 2014 2015 2016 2017

Ran

k in

th

e C

orr

up

tio

n P

erce

pti

on

s In

dex

74

45

27

50 48 45 39

31

20

6

0

10

20

30

40

50

60

70

80

Poland 2012 Poland 2014 Poland 2017 Bulgaria Hungary Romania Slovakia France Germany USA

+47

7 Source: MoED

Polish economy is still improving its potential for further growth

23.6

13.2 12.5 13.0

17.2

22.6

9.4

0.0

5.0

10.0

15.0

20.0

25.0

Poland Czech Republic Hungary Bulgaria Romania Slovakia EU (28)

2009-2016 accumulated GDP change in %

Transparent macroeconomic policy:

• in 2016 GDP growth was driven mostly by a steady increase in private consumption, improvement of the situation on the labour market and favourable consumer sentiment

• after August 2017, the budget has recorded almost PLN 5 bn of surplus which translates into a much lower deficit

• Poland is set to be the largest beneficiary of EU funds in 2014-2020: 11% of EUR 960 bn, total of EUR 105.6 bn

• government has to respect domestic fiscal rules and the EU 3% threshold for general government deficit

-7.3

-4.8

-3.7 -4.1

-3.5

-2.6 -2.4 -2.9

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

2010 2011 2012 2013 2014 2015 2016 2017f

General government deficit to GDP ratio remains under 3%

34.6

53.1

34

39

44

49

54

2005 2007 2009 2011 2013 2015 2017

Share of exports in GDP is on the rise

+18,5%

8

Source: Central Statistical Office of Poland

Human Resources – population in numbers

POLAND 39%

Romania 21%

Czech Republic

11%

Hungary 10%

Bulgaria 7%

Slovakia 6%

Lithuania 3%

Latvia 2% [CATEGORY NAME] 1 %

Poland is the biggest country among the CEE members of the EU

64% of the population is under 49 years of age

10.4 m Poles are under the age of 25

Second-lowest median age in CEE – 39.6 y/o

Population of CEE countries

9

Source: GDP annual growth rates, Eurostat, March 2017

Translating education into innovation

• 24 mn people aged 49 and less (64%)

• Almost 1.35 mn students (2016/2017)

• More than 364,000 graduates annually (2016)

• Over 65,000 foreign students from 156 countries (5.15% of all students, 11% y-o-y increase)

• More than 90% of students speak foreign languages

• Population with higher education: 25% of the total, 37% of working population

• 438 higher education institutions:

• Growing percentage of science students – 24%

Poznan

Wroclaw

Warsaw

Krakow

Lodz

Szczecin

Gdansk

Katowice

Bydgoszcz/Torun

Bialystok

Olsztyn

Opole Kielce

Lublin

Rzeszow

Zielona Gora

201 > No. of students (thousands)

151 – 200 101 – 150 51 – 100 50 <

10

0

5

10

15

20

25

2004 2008 2012 2016

24.4

13.1 7 6.4 4.6 3.8

0

5

10

15

20

25

Poland Romania Czech Republic Hungary Bulgaria Slovakia

Source: Eurostat & Central Statistical Office, June 2018

Vast pool of young labour force

Unemployment rate: 5.8% (967 900 registered unemployed )

People of age 15-64 (Q1 2017)

11

Source: Central Statistical Office, May 2018

Unemployment levels

12

Source: Foreign Investments Department, Polish Investment and Trade Agency

Investment incentives relying on employment generation

• Endorsement of new investments – the government aid scheme (in form of income tax exemption granted for up to 15 years and up to 50% of the tax due)

• The government cash grants – dedicated to supporting large investments considered vital to the Polish economy (Investment & Employment grants)

• EU-funded cash grants focused on R&D projects, innovative new investments by SMEs, which use new technologies, energy efficiency projects, production of energy from renewable sources

and others …

13

Source: General Directorate for National Roads and Highways, European Union Road Federation

Rapidly developing highway infrastructure

Highway infrastructure in 1996 Today

existing

under construction

Poland has the fourth longest road network in Europe

31.5 bn EUR will be spent on road infrastructure in the years 2014-2025

1,100 km+ of highways and expressways under construction

81% of planned highways completed

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Source: Colliers International Poland, June 2017

Main CEE logistics hub

Construction costs in Poland €/m2

Purchase of land 5 – 70

Construction of an A-class warehouse ~280

Construction of a light manufacturing facility ~400

Office space as part of an industrial facility ~500-700

15

Source: Average electricity prices for medium-size industries - annual consumption between 2,000 and 20,000 MWh (net EUR per kWh), Eurostat, 2017

Competitive utility prices

0.5 – 1.5 EUR per 1m3 of potable water

0.75 – 2.0 EUR per 1m3 of sewage

0.96 EUR per 1 l of diesel – second lowest in the EU

0.071 EUR per 1kWh for medium-size industries

0.026 EUR per 1kWh for medium-size industries

0.0710

0.0000

0.0200

0.0400

0.0600

0.0800

0.1000

0.1200

0.1400

2008 2009 2010 2011 2012 2013 2014 2015 2016

European Union (28 countries) Bulgaria Czech Republic Hungary Poland Romania Slovakia

Note: all the above prices , except fuel, are provided without VAT

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Poland & India Finalised Indian investments in Poland

Significant Indian investors in Poland

• ArcelorMittal • Videocon • Escorts • Strides Arcolab • Reliance Industries • Ranbaxy • Essel Propack • KPIT Cummins • Zensar Technologies Ltd • Tata Consultancy Services

• HCL Technologies Ltd • Infosys • Wipro • Jindal Stainless • Berger Paints India • UFLEX • Glenmark Pharmaceuticals • Rishab Instruments (acquired Lumel) • CRISIL

Source: Indian Embassy in Warsaw, January 2018

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PAIH’s pipeline Currently served investments with potential for being finalised in Poland

Biggest investors Main sectors

US (57)

Germany (24)

Japan (14)

UK (12)

France (8)

Poland (7)

Turkey (6)

South Korea (5)

BSS (SSC+IT+BPO) (53)

Automotive (35)

R&D (17)

E-mobility (13)

Food processing (10)

White goods (8) and electronics (6)

Metal processing (5)

180 FDI projects

Total value of investments: EUR 6.74 billion

Total number of new workplaces: 51.3 thousand

Source: PAIH, August 2018

China (12)

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How can PAIH’s Trade Office in Mumbai assist Indian investors?

?

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Thank you on behalf of:

Polish Investment and Trade Agency

12 Bagatela Street

00-585 Warsaw

e-mail: invest@paih.gov.pl

Ada Dyndo (Chief of the Foreign Trade Office in Mumbai) Mobile: + 91 97 69 70 73 46

e-mail: ada.dyndo@paih.gov.pl

Mieszko Pilecki (Business Development Manager of the of the Foreign Trade Office in Mumbai) Mobile: +91 730 417 46 03

e-mail: mieszko.pilecki@paih.gov.pl

https://www.paih.gov.pl/en