Investing in Polish Special Economic Zones

The 14 special economic zones in Poland (SEZ) attract investments and investors in Poland through income tax exemption for business activity.

A Polish Special Economic Zone is an uninhabited, separate part of territory within the country where business activities may be performed under preferential conditions.

The purpose of the Special Economic Zones is to:

• -       accelerate the economic development of different regions in Poland;
• -       create new jobs;
• -       attract foreign investors in Poland; 
• -       manage post-industrial property and infrastructure.

The first Special Economic Zone in Poland was initiated in Mielec in 1995. The 14 existing SEZs differ in area, location, nature, development conditions, infrastructure and technical and telecommunication networks.

How to enter in a SEZ

In order to benefit from specific tax exemption applicable in a SEZ, investors must have a permit to operate in that special economic zone. The investor must check if the planned activity qualifies for a permit. Some examples of activities that do not qualify for the special benefits offered by a SEZ are: manufacturing of explosives, tobacco and alcoholic products, gambling centres, etc.

The four basic steps for starting a business in a Polish Special Economic Zone are:

• -       select a location;
• -       obtain a SEZ permit;
• -       launch and implement the desired investment; and finally
• -       generate income and use the tax exemption.

Income tax exemption in SEZs

The main advantage of investing in a Special Economic Zone in Poland is the possibility to obtain a corporate tax exemption. The corporate income tax in Poland is 19% and the maximum income tax exemption is calculated according to the value of state aid available for investors for a particular project. There are several factors that determine the value of the state aid: the location of the investment, the size of the company and the amount of investment expenditure.

The value of the state aid is calculated as below:

• -       30-50% of eligible costs for large companies;
• -       40-60% of eligible costs for medium companies;
• -       50 to 70% of eligible costs for small companies.

Medium sized companies have less than 250 employees and an annual turnover lower than 50 million euros. Small companies have no more than 50 employees and more than 10 million euros annual turnover or annual balance.  

According to the location of the company in Poland, maximum aids vary between 30% and 50%.

Real estate tax exemption in a SEZ

Investors that run their businesses in a SEZ in Poland may receive a real estate tax exemption based on a resolution issued by relevant local authorities. An investor must make investments in that area and create jobs in order to qualify for a real estate tax exemption. Also, investors must:

• -       communicate their intention to apply for aid to the authorities before beginning the investment;
• -       maintain the investment in that region for at least five years.

Our company formation experts in Poland are qualified to advise you regarding the best Special Economic Zones to invest in Poland, according to the particular needs of your business. Contact us if you want to open a company in Poland.