Why Poland?
Michal Mierzwa
Head of Trade and Investment Promotion Section
Polish Embassy
Cairo
Poland
•
Source: Wikipedia
Agenda: Poland from business perspective
I.
Poland at the glance
People, finance & economic performance
II.
FDI trends
III.
Global acknowledgment
IV.
Relations with Egypt
V.
Incentives system
Cooperating with Poland?
• People
• Stability
• Market
Location
EU & NATO
Infrastruct
ure
Finance
• Value
chain
People: 38 m (6th in EU)
•
•
•
•
Median age
Labour force
Unemployment
Labour force/occupation
37 y
17 m
10 %
5% agr./31% serv./54%ind.
 20 m young people
 almost 2 m students
 more than 430 thous. graduates every year
Finance
• Average wage (monthly) $920 net, $1,300 gross
• Statutory min. wage (monthly gross) 1,386 PLN ($470)
• Social security by employer ca. 20%
• PIT
18-32%
• CIT
19%
• VAT
0-8-23%
• Inflation
4%
• Repo
4.5%
Investment incentives
• 2007-2013: EUR 90 bn into economic projects, innovation,
infrastructure & HR
• 14 Special Economic Zones
• Grants for priority sectors
• EUR 24 bn- 2012 European Football Championship
Economic stability
•Main driver of economic growth:
–
–
•
•
•
•
•
•
domestic demand – 4.5%
overall consumption – 2.9%
GDP (PPP): total $754,097 bn (20th)
Per capita: $19,752 (40th)
GDP (nominal): total $468,539 bn
Per capita: $12,300
GDP/sector: 4.6% agr./28.1% ind./67.3% serv.
IMF 2011-2016 GDP growth projections :
3.8%-3.6% (4.5% 1993-2010)
1.7%-2.1% (2%)
1.2%-6.5% (5% 1993-2010)
FDI
Stock: $180 bn
Inflow: $10-13 bn p.a.
Polish outward investment: $ 25 bn
Key factors :
1.Rapidly expanding domestic market
2.Size of the domestic market
3.Flexible & skilled labour force
4.High quality/cost ratio
FDI stock in Poland (EUR bn)
Cumulative value of FDI
160
140
121,1
120
116,4
128,8
Geographical sources of FDI
EU
89,7%
136,4
95,4
EUR bn
100
80
Other
countries
10,3%
76,7
63,5
60
40
20
Geographical sources of FDI inflow
(in EUR bn, cumulative since 1993)
0
2004
2005
2006
2007
2008
2009
2010
22.9
the Netherlands
20.8
Germany
14.3
France
11.1
Luxembourg
8.4
USA
6.4
Sweden
Italy
Source: National Bank of Poland 2011
5.2
Austria
4.7
Great Britain
4.7
FDI by industry
Manufacturing 31%
Finance 20%
Others 15%
Trade & repairs 17%
Real estate & accounting 17%
Great Story to Tell (1)
Services and Manufacturing Hub in Poland
Automotive
White goods
Electronics
Great Story to Tell (2)
Services and Manufacturing Hub in Poland
Aviation
BPO
R&D
Investors confidence
Investment attractiveness of Poland – strenghts
Source: AmCham, KPMG 2010
Investment attractiveness of Poland – weaknesses
Support from
government
institutions
Simpicity of tax
system
0,00
-0,20
-0,40
-0,60
-0,80
-1,00
-1,20
-1,40
Source: AmCham, KPMG 2010
Red tape
Quality of railway
system
Quality of road
system
Exports 2010
$160 bn (+17%)
Leatheri
0.4 %
Stone &
Ceramics 2%
Textiles 4%
Minerals 4%
Wood products 5%
Divers 6%
Base Metals 11%
Foodstuffs 11%
Chemicals & Plastics 13%
Machinery & Equipment 43%
Imports 2010
$178 bn (+19%)
Leather
%0.5
Stone&Ceram
ics% 1.5
Divers 2%
Wood Products 4%
Textiles 5%
Foodstuffs 8%
Metal Products10%
Mineral Products 12%
Chemicals & Plastics 17%
Machinery & Equipment 38%
Polish Exports to Egypt
$233 m
Leather
0.01%
Textiles 0,3%
Divers 0,5%
Stone& Ceramics 3%
Wood Products 7%
Mineral Products 11%
Chemicals & Plastics12%
Foodstuffs 14%
Metal Products 22%
Machinery & Equipment 30%
Geographical export distribution
Germany
26%
Egypt
0,15 %
Italy 7%
France
7%
Turkey
1,5%
China
1%
UK 6%
EU=80%
RU 4%
Czech
6%
Polish imports from Egypt
$50 m
Divers
1%
Leather 1%
Wood Products
1%
Stone & Ceramics
2%
Mineral Products 2%
Metal Products 4%
Machinery & Equipment 5%
Foodstuffs 22%
Chemicals & Plastics 25%
Textiles 37%
Geographical import distribution
Egypt
0,03%
Germany
22%
Italy 7%
France
4%
Turkey
1.2%
Czech
4%
UK 3%
EU=60%
China
10%
RU 9%
Major Polish exporters
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Bel Group, cheese +machinery
Contractus, milk powder+machinery
FTK, tobacco
GSK Parmaceuticals
Geofizyka, exploration
KGHM, copper
Ciech, chemicals
Debica, tyres
Purcell Systems, TT enclosures
Apator Metrix, gas meters
Befared, motor reducers
Gemalto, digital security, electronic passport
ABB, electric motors, transformers, electricity grids
Hepam, disconnectors
Philips Lighting
Major Polish importers
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Ciech, chemicals, plastics
GSK Pharmaceuticals
Tesco
C&A, branded apparel
Defalin Group, twines+ropes
Andropol, home+industrial fabrics
Pirelli
CDM, wooden windows, doors
Hart-SM, tempered glass
BRW, kitchen fronts, furniture
DS Smith, recycled packaging+ office products
Farm Frites, fresh frozen vegetables
Kamis, condiments
Cenos, hulled rice , groats, peas, corn
Instanta, instant coffee
15 Polish sectors with potential for
export to and cooperation with Egyptian companies
1. Polish food specialties
2. Agroindustry
3. Automotive industry
4. Brown and white goods
5. IT and ICT
6. Biotechnological and pharmaceutical industry
7. Cosmetics
8. Production of medical equipment and measuring devices
9. Woodwork of windows and doors
10.Furniture
11.Construction industry- services and products
12.Mining machines and equipment
13.Apparel, accessories, leather articles
14.Health tourism
15.Yacht and recreational boat manufacturing
Major Polish investors
1. PGNiG, oil industry, Cairo
2. Can Pack Linco, packaging, Cairo
3. Magic Play, tourist village, Hurghada
4. Dolfinella for Touristic Hostelry, South Sinai
5. Sonata for Real Estate Investment, Red See
6. Cora Lo Mors, real estate, Red See
7. Ozis, socks manufacture, Ismailia
8. Hacon for Metal Industry, 6th of October
9. Halabanaha for Touristic Investment, Red See
10. Agaby for Touristic Facilities Management
and Real Estate Investment, Red See
11. International for Touristic Investment, Red
See
Incentives: Forms of regional aid
 Tax breaks
 CIT exemption in Special Economic Zone
 Real estate tax exemption
 Cash support
 Government grants through individual negotiations
 Cash grants available through EU Funds
Special Economic Zones
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A special economic zone (SEZ) is a designated area in which
manufacturing or distribution activities can be conducted on
preferential terms
The purpose of SEZs is to support regional development
Currently, there are 14 SEZs in Poland, each consisting of
several subzones
Total area of all SEZ – 20 000 hectares
SEZ will operate until 2020
Permits to conduct activities in SEZ are issued by the
authorities of each SEZ
Minimum investment: EUR 100,000
Possibility of including the land selected by an investor into
SEZ
Benefits from obtaining a permit to conduct activities in SEZ :



eligibility for income tax exemption – a form of regional aid
plot of land prepared for an investment project, available at a competitive
price
free assistance in dealing with formalities relating to the investment project
Priority sectors: Government grants
System of support of investments of considerable importance for Polish
economy
Production
Modern services
 automotive
 ICT
 electronics
 SSC
 aviation
 BPO
 biotechnology
 „big investment” in other sectors
R&D activity
Purpose of support
 development of innovativeness and competitiveness of Polish economy
Result of support
 50 programmes of total amount 13,5 bn PLN (since 2004 r.)
 33,7 thous. of new jobs
Source: PAIiIZ, Ministry of Economy
Government grants
Sector
New work places
and
Investment
outlays
Maximum
amount of
support
Support for new investment
Priority sectors
50
Large investment
500
in other sectors
PLN 160 m
PLN 1 bn
2% to 10.5% of
investment
outlays
Incentives available for manufacturing projects
Minimum requirements
Available instruments?
Investment
expenditures
New job
places
How much?
Investment grant
PLN 160 m
50
2-10.5% of investment
outlays
Employment grant
PLN 40 m
250
3,200
–
15,600
PLN/work place
EU grants
PLN 160 m
150
max. 30% of investment
expenditure
CIT exemption (SEZ) EUR 100,000
subject to
negotiations
To the maximum level of
public aid for the project
or to the end of
existence of SEZ
RET exemption
depends on the location
Measure 4.5, sub-measure 4.5.1
Poland, because: Competitive Advantages
Location & economic fundamentals
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


strategic location in continental Europe
part of trans-European transportation corridor
third fastest growing EU country in 2010
38 million consumers
1000 km radius
250 mn people
Labor force
 young, well-educated work force
 ca 11% of university students in the EU
 455 universities & high education schools
 language proficiency
 increasing labour productivity
Investment incentives
 tax exemptions in 14 Special Economic Zones
 grants co financed from the EU (EUR 90 m)
2000 km radius
550 mn people
Our mission: Enhancing trade & investment with Egyptian business
Our purpose: Helping make
the right choices
Awareness raising
B2B
Market penetration
Business dialogue
Our activity: Providing & supporting
intelligence & projects
•Trade & investment seminars
•PR
•State & business missions
•Fairs & exhibitions
•Contacts with GOP, GOE & business
•Business leads & referrals
•Intelligence on economy, sectors &
financial incentives
•Niche identification
•Consultancy & advice
•Advocacy
Thank you for your attention
www.cairo.trade.gov.pl