Currently, the Polish economy is one of the fastest growing in the European Union. Therefore, investments in Poland are of great interest to foreign businessmen. The Polish investment market opens up broad prospects for foreign investors, giving them the opportunity to invest in real estate, securities, precious metals or business projects.
Polish investment climate
The Polish economy has become one of the most dynamically developing in Europe, which is skillfully used by experienced foreigners specializing in investment. The main benefits of investing in Poland in 2021 include:
- favorable geographical position of Poland (between the CIS countries and the European Union);
- EU membership, thanks to which political and economic stability in the country is ensured;
- the majority of the Polish population is well educated;
- production and wages in Poland are cheaper compared to other EU countries, but the work is done with high quality;
- low level of corruption;
- financial assistance from the state under certain conditions (creating jobs, introducing new technologies, saving the environment, etc.);
- Poland's membership in the World Trade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD);
- tax incentives in free economic zones, of which there are 14 in Poland;
- equal treatment of domestic and foreign investors, in accordance with the requirements of the OECD;
- popularity of the country among foreign tourists.
Most of all foreign investors invest in production - 42%, financial services - 22.7%, and motor vehicles and communications - 12.1%.
Requirements for foreign investors
Polish law does not contain any special requirements for foreign investors. To get the opportunity to invest in the Polish economy, it is enough:
- be at least 18 years of age;
- have a foreign passport;
- have business experience.
Business people who come to Poland from abroad have the right to invest under the same conditions as Poles. At the same time, you can be either a 100% owner of the investment object, or have only a share in it.
In addition, there is a possibility to choose any field of activity.
At the same time, Poland's investment policy in Special Economic Zones (SEZ) requires compliance with a certain number of conditions.
FEZ (Specjalne Strefy Economiczne, SSE) are parts of the territory of Poland allocated by the government, in which investors are entitled to tax incentives (exemption from income tax, and in some zones - from real estate tax), as well as state financial support. The purpose of creating favorable conditions for investors in Special Economic Zones is to attract foreign capital and new technologies.
In order to receive financial assistance from the state and conduct business in the FEZ, a foreign investor must:
- obtain a special permit;
- engage only in the type of activity that is specified in the permit;
- preserve jobs if the investor applied for state assistance, which was provided in connection with the employment factor;
- retain ownership of the principal contributions if the investor applied for government assistance based on investment costs.
Features of investing in real estate
One of the most popular ways to attract investment from abroad is the construction of real estate. Foreigners often invest in the construction of residential complexes, as well as commercial real estate, in particular, shopping and business centers.
The main advantages of investing in real estate in Poland include:
- an increase in the number of real estate objects on the market;
- stable income in the form of rental payments;
- safety of investment contributions - the Polish real estate market is not monopolized, so individual foreign investors who are unable to obtain Polish citizenship can feel protected;
- unpretentiousness of the market - payback is observed even in cases of investment in objects that are not the best in their condition;
- the ability to insure real estate against losses in the event of damage, fire, sudden termination of the lease;
- simplicity of legal procedures, unlike, for example, the bond and stock market;
- the ability to independently control income and make decisions;
- availability of tax incentives.
Buying real estate in Poland at an average price and renting it out at an average gross value will provide the investor with a return of about 8.5%.
At the same time, many objects are available in the commercial real estate markets that are prepared for lease with a planned yield higher than this indicator. Find out more about how commercial real estate is profitable in Poland.
Features of investing in precious materials
Precious metals in Poland are increasingly viewed as a form of capital investment, especially in times of uncertainty in the financial market. In response to the growing interest in this form of investment, the Polish Mint began offering both domestic and foreign gold bars.
When investing in gold on the Polish market, remember that the price of gold depends on two equally important factors. The first is the London gold price, the so-called LBMA Gold Price, which is announced twice in the UK during each business day. The second factor is the exchange rate of the US dollar against the Polish zloty.
The advantages of investing in gold and other precious materials in Poland are as follows:
- precious metals, unlike banknotes, cannot be printed on demand, which increases their price;
- the global resources of metals are limited, and the costs of operating the deposits are growing;
- in times of uncertainty in financial markets, many central banks decide to increase their gold and foreign exchange reserves, which also raises the price of gold;
- investment gold is exempt from VAT, so it can be viewed as a currency, not a raw material;
- in accordance with the Law on Taxes on Goods and Services, investment gold bars must contain at least 99.5% pure gold (purity 995), while coins contain at least 90% pure gold in the alloy (900 purity gold).
At the same time, investing in precious materials has some disadvantages:
- the need for high security storage;
- long term of expectation of return on investment - up to several decades.
Features of investing in securities
Foreign investors can receive or buy shares and other securities of Polish companies. To do this, you can take part in open trading on the Stock Exchange, but you can also discuss the purchase and sale of shares personally with their owner.
The main advantages of investing in Polish securities are:
- the possibility of obtaining significant income from shares;
- the right to participate in making important decisions regarding the activities of the company;
- partial right to manage the company (depending on the shareholding);
- the ability to negotiate profit in advance in case of buying bonds;
- the ability to repay bonds ahead of schedule.
At the same time, this type of investment also has some disadvantages:
- the likelihood of losing money due to a depreciation;
- in case of purchase of bonds, the owner does not have the right to manage the company;
- the difficulty of predicting the amount of profit when buying shares.
Features of investing in business
In Poland, it is allowed to open enterprises with 100% participation of a foreign investor. For foreign entrepreneurs, there are no restrictions on the types of economic activities in which they want to invest. However, to register a business in such industries as the extraction of natural resources, the sale of weapons and explosives, air transport and some others, it is necessary to obtain a special permit (license). The license can be issued for a period of 2 to 50 years.
Investing in a business in Poland has a number of advantages:
- the investor has the right to transfer the entire income abroad (after tax payments);
- the ability to hire foreign workers with work permits;
- the ability to independently determine the amount of wages for your employees (subject to compliance with the laws on the minimum wage);
- with a competent organization of the implementation of a business idea, you can count on high profitability due to the stable economic situation in the country;
- the presence of many start-up projects, the founders of which are looking for investors to implement their business idea.
Learn more about how to buy a ready-made business in Poland.
Repatriation of funds
Foreign investors have the right to transfer abroad funds in foreign currency received from the sale or liquidation of an enterprise in full. In addition, monetary compensation for expropriated or nationalized property can be transferred abroad, which may arise in the process of depreciation of the prices of shares or shares, if this is provided for by the charter of the enterprise. For the repatriation of funds purchased in foreign currency, special permission is not required for foreign employees.
Mistakes made by Russian investors in Poland
Compared to other European countries, Russian investors are not very active in investing in Polish investment projects. Over the past decade, Russian entrepreneurs have invested only 14 million euros in Poland, while, for example, in the Netherlands, their investment has reached 28 billion euros over the past 10 years. Nevertheless, seeing great prospects, some business people still invest a lot of money, expecting to receive a high income over time.
The most attractive factor for Russian investors to choose Poland is the possibility of obtaining tax incentives.
However, for some entrepreneurs, income tax exemptions are not enough and they try to evade taxes. In this case, the investor is deprived of all the benefits previously assigned to him.
In addition, Russian investors should carefully study the country's investment climate, as well as the legislation and procedures for doing business in Poland, before investing their money in this country. It is an insufficient study of the characteristics of investment that often becomes the main mistake leading to bankruptcy.
Finally
The Polish investment climate is one of the most promising and profitable in Europe. A fast-growing economy and a stable political situation in the country, membership in the European Union, the possibility of obtaining benefits, as well as a number of other advantages, contribute to the inflow of investments from abroad, including Russia and Ukraine. Moreover, investors are given the opportunity to invest in any type of economic activity.
Various forms of investment are available in Poland - from business projects to buying shares in existing companies, from real estate to gold bars and jewelry. At the same time, investors have the right to withdraw their profits from Poland in foreign currency to another country after paying all tax deductions.
