Poland

Poland

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Picture: Uninterrupted GDP growth since 1991
 
 
Picture: Uninterrupted GDP growth since 1991
 
Picture: Largest domestic market of 16+1 CEE countries
 
 
Picture: Largest domestic market of 16+1 CEE countries
 
Picture: Key beneficiary of increasing Asia-Europe rail traffics
 
 
Picture: Key beneficiary of increasing Asia-Europe rail traffics
 
Picture: National economic roadmap syncs with China’s BRI
 
 
Picture: National economic roadmap syncs with China’s BRI
 
Picture: A new SEZ integrating with the New Silk Road Route
 
 
Picture: A new SEZ integrating with the New Silk Road Route
 

 

Poland: Market Profile

Picture: Poland factsheet
Picture: Poland factsheet

1. Overview

Poland, the largest economy in Central Europe, has seen broad-based productivity growth over the past decade and this has translated into remarkable progress in poverty reduction and shared prosperity. Despite a successful performance so far, however, a coherent set of policies is needed to respond to long-term challenges and opportunities, including managing one of the most rapidly aging societies in Europe, urbanisation challenges and leveraging technological change.

2. Major Economic Indicators

Graph: Poland real GDP and inflation
Graph: Poland real GDP and inflation
Graph: Poland GDP by sector (2016)
Graph: Poland GDP by sector (2016)
Graphi: Poland unemployment rate
Graphi: Poland unemployment rate
Graph: Poland current account balance
Graph: Poland current account balance

Note: (f) forecast
Source: IMF, World Bank

3. External Trade

3.1 Merchandise Trade

Graph: Poland merchandise trade
Graph: Poland merchandise trade
Graph: Poland major export commodities (2016)
Graph: Poland major export commodities (2016)
Graph: Poland major export markets (2016)
Graph: Poland major export markets (2016)
Graph: Poland major import commodities (2016)
Graph: Poland major import commodities (2016)
Graph: Poland major import markets (2016)
Graph: Poland major import markets (2016)

Source: WTO, World Bank WITS database

3.2 Trade in Services

Graph: Poland trade in services
Graph: Poland trade in services

Source: WTO

4. Trade Policies

  • Poland has been a member of WTO since 1 July 1995 and  a member of GATT since 18 October 1967.

  • Poland has been a member of the EU since 2004. All EU member states are WTO members.

  • Trade flows are largely unhindered by import tariffs, which at 1.5% on average are among the lowest in the world, and non-tariff barriers to trade are minimal. There are no currency controls or import substitution policies that would burden importers, and trade standards and policies adhere to EU rules.

  • Poland applies the EU's Common External Tariff (CET), which means goods manufactured and imported from within the EU are not subject to customs charges. The average tariff rate for EU states is just 1%, which is among the lowest globally, although goods imported from outside the EU will incur duties of between 0%-17%.

  • The EU has imposed various anti-dumping measures on a wide range of products, predominantly in the areas of textiles, machine parts, steel, iron and machinery on goods coming from China and a few other Asian nations to protect domestic industries. Currently, a number of Chinese mainland-origin products are subject to EU’s anti-dumping duties, including bicycles, bicycle parts, ceramic tiles, ceramic tableware and kitchenware, fasteners, ironing boards and solar glass, which are of interest to Hong Kong and regional exporters. In November 2016, the European Commission (EC) imposed a provisional antidumping duty on imports of the some primary and semi-processed metals from China. The rate of duty is between 43.5%-81.1% of the net free-at-Union-frontier price before duty depending on the company. In the same vein, the rate of duty for similar goods from Belarus is 12.5% of the net, free-at-Union-frontier price before duty. As of end-December 2017, the EU did not apply any anti-dumping measures on imports from Hong Kong.

  • Steel: In 2016, the EC introduced an import licensing regime for steel products exceeding 2.5 tonnes. The regulation will be active until May 15 2020.

  • In March 2016, the EC announced a new support package for European farmers, which involves mobilising an estimated EUR500mn by 2019.

  • In February 2018, the Polish government officially enacted its Act on Electromobility and Alternative Fuels. The Act will introduce excise duty exemptions for electric vehicles (EVs), tax exemptions for companies using EVs, a new government procurement plan based on electrifying its government fleet, as well as support for charging infrastructure development. This reform will position Poland well in terms of attracting investors that are higher-up the automotive and technology value chains.

  • Value-Added Tax (VAT) is charged at a rate of 23% on sale of goods, services and imports; 0% applies to exports and supplies of goods within the EU. Reduced rates (applicable to specified goods and services indicated in the VAT Act, such as food, agricultural products and medical equipment).

  • In April 2015, the Polish parliament amended the pharmaceutical law, restricting exports of medicinal products from the country. The amendment also introduced strict reporting obligations for marketing authorisation holders and warehouses.

Source: WTO – Trade Policy Review, BMI Trade and Investment Risk report

5. Trade Agreement

5.1 Multinational Trade Agreements

Active

  1. Poland is a member of WTO (Effective date: July 1, 1995) and the EU since 2004.

  2. The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. As an EU member, Poland applies the EU Common External Tariff and enjoys tariff-free trade within the EU. Within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002, and is composed of 19 EU member states which use the euro currency; however, Poland maintains its own currency.

  3. The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada will be provisionally applied as of September 2017. The agreement is expected to boost trade between partners as CETA removes all tariffs on industrial products traded between the EU and Canada. CETA also opens up government procurement. Canadian companies will be able to bid on opportunities at all levels of the EU government procurement market and vice-versa, though some sectors are restricted. The agreement will only enter into force fully and definitively, however, when all EU Member States have ratified the Agreement.

  4. Europe Free Trade Association (EFTA) includes Switzerland, Norway, Liechtenstein, Iceland. The European Economic Area (EEA) unites the EU Member States and the three EEA EFTA States (Iceland, Liechtenstein, and Norway) into an Internal Market governed by the same basic rules. These rules aim to enable goods, services, capital, and persons to move freely about the EEA in an open and competitive environment, a concept referred to as the four freedoms. The Agreement on the European Economic Area, which entered into force on 1 January 1994, brings together the EU Member States and the three EEA EFTA State, Iceland, Liechtenstein and Norway, in a single market, referred to as the Internal Market.

Under Negotiation

EU-Japan FTA: Japan wants to speed up negotiations for an early signing of a FTA with the EU; however,significant differences between the two sides are stalling a deal. For instance, Japan still wants the EU to waive import duties for the automobile sector in a bid to support Japanese autos, auto parts and electric device manufacturers, while the EU insists Tokyo must lower tariffs on agricultural produce and processed foods.

Source: WTO Regional Trade Agreements database, BMI Trade and Investment Risk Report

6. Investment Policy

6.1 Foreign Direct Investment

Graph: Poland FDI stock
Graph: Poland FDI stock
Graph: Poland FDI flow
Graph: Poland FDI flow

6.2 Foreign Direct Investment Policy

  1. Government bodies that are responsible for FDI promotion, licensing and regulations - There are a variety of Polish agencies involved in investment promotion: The Economic Development Ministry has two departments involved in investment promotion and facilitation: the Large Investment Support Department and the International Relations Departments. The Foreign Affairs Ministry promotes Poland’s foreign relations, including economic relations, and along with the Polish Chamber of Commerce, organises missions of Polish firms abroad and hosts foreign trade missions to Poland. Starting February 2017, the Polish Investment and Trade Agency (PAIH) replaced the Polish Information and Foreign Investment Agency (PAIiIZ) as the main institution responsible for promotion and facilitation of foreign investment. The rebranding is connected with the expansion of the scope of the agency's activities. Apart from providing services to investors in the country, PAIH will support Polish investors abroad. The agency will operate as part of the Polish Development Fund, which integrates government development agencies. PAIH will coordinate all operational instruments, such as diplomatic missions, commercial fairs and programs dedicated to specific markets and sectors, as well as promote the Polish economy and attract foreign investors to the country and these services are available to all investors.

  2. Related law and regulations on foreign investment are well established; however, some restrictions still remain for FDI such as limits on foreign ownership and business activity in core sectors. The Act on the Control of Certain Investments entered into force in 2015 and provides for the screening of acquisitions in energy generation and distribution; petroleum production, processing and distribution; telecommunications; and the manufacturing and trade of explosives, weapons and ammunition.

  3. Poland’s support for foreign investors is generally sectoral in focus; regional support is provided in the context of sectoral investments. Any company investing in Poland, either foreign or domestic, may apply for assistance from the Polish government. Foreign investors have the potential to access grants and certain incentives. There are 14 Special Economic Zones located throughout Poland on major supply chain routes. The benefits available for locating in these zones include income tax exemption, real estate tax exemption, competitive land prices and close access to high-quality local suppliers.

  4. Foreign ownership is permitted with the exception of some sectors designated as strategic. Polish law restricts foreign investment in land and real estate. Polish law limits non-EU citizens to 49% ownership of a company's capital shares in the air transport, energy, radio and television broadcasting and airport and seaport operations sectors.

  5. Licences and concessions for defence production and management of seaports are granted on the basis of national treatment for investors from OECD countries.

  6. Polish law restricts foreign investment in land and real estate. Since Poland's EU accession, foreign citizens from EU member states and EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland) do not need permission to purchase non-agricultural real estate, or to acquire or receive shares in a company owning non-agricultural real estate in Poland. Land usage types such as technology and industrial parks, business and logistic centers, transport, housing plots, farmland in special economic zones, household gardens and plots up to 2 hectares are exempt from agricultural land purchase restrictions. Citizens from countries other than the EU and EFTA are allowed to purchase an apartment, 0.4 hectares of urban land, or up to one-half hectare of agricultural land with building restrictions and restrictions on eligibility for government support programs. In order to make large commercial real estate purchases, foreign citizens must obtain a permit from the Ministry of Interior (with the consent of the Defense and Agriculture Ministries), pursuant to the Act on Acquisition of Real Estate by Foreigners. Laws to restrict farm land and forest purchases came into force April 30, 2016.

Sources: WTO – Trade Policy Review, The International Trade Administration (ITA), U.S. Department of Commerce

6.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
There are 14 Special economic zones (SEZs) located throughout Poland on major supply chain routes.
  • Exemption from custom duties and VAT
  • Competitive land prices
  • Real estate tax, Income tax exemption
  • Good access to high quality local suppliers
The amount of government aid available to investors is subject to the EU's aid intensity programme, whereby projects in less developed regions benefit from incentives up to 50% of the costs of new investment, with this percentage falling to 10% in the most developed region, Warsaw. Investment grants of up to 50% of investment costs (or 70% for small or medium-sized enterprises) are available; grants for research and development; grants for other activities such as environmental protection, training, logistics, or use of renewable energy sources.

Source: BMI Reseach – Investment Openness Report

7. Taxation – 2017

  • Value added tax: 23%
  • Corporate income tax: 19%

Source: PwC Taxes at a Glance 2017, BMI: Taxation Report

7.1 Important Updates to Taxation Information

  • Poland has double taxation agreements (DTA) with China (mainland) but there are no separate agreements in place with Hong Kong.
  • Poland's tax regime is applied evenly to both resident and non-resident businesses. A corporate entity is considered resident for tax purposes if it has been legally incorporated in Poland or if its place of effective management is located there. Resident companies are subject to income tax on worldwide income, while non-resident entities (branches of foreign companies) are taxed on Poland-sourced income only. A flat rate of 19% is applied to profits and capital gains of both resident and non-resident businesses.

7.2 Business Taxes

Type of TaxTax Rate and Base
Corporate Income Tax19% on taxable earnings. The 15% corporate tax rate applies only to start-up taxpayers and taxpayers whose revenue from sales (including value-added tax due) in the preceding tax year did not exceed the local currency  equivalent of EUR1.2mn (small taxpayers).
Branch Tax19% on profits
Capital Gains TaxTreated as taxable income; 19% on profits
Withholding Tax (interest, royalties, services)20% on net earnings
Real Estate Tax
5%
Value-Added Tax (VAT)23% on sale of goods, services and imports; 0% applies to exports and supplies of goods within the EU. Reduced rates (applicable to specified goods and services indicated in the VAT Act, such as food, agricultural products and medical equipment).

8. Foreign Worker Requirements

8.1 Localisation Requirements

Foreigners can only be employed in positions for which no suitable candidate could be found within Poland or in other EU member states. After a five-year period, EU citizens acquire the status of permanent resident if he or she continues to fulfil the respective conditions.

8.2 Obtaining Foreign Worker Permits for Skilled Workers

In order to employ foreign workers from outside the EU, businesses must apply for work permits according to the type of activity the worker will undertake and the length of their stay in Poland. The rules and regulations regarding labour mobility are broadly in line with EU directives, allowing for the free movement of labour within the EU. People from the EU do not need any work permit, but their employer must inform the job office about their being hired.Most non-EU citizens require a work visa and permit in order to work in the country - which generally takes about a month to obtain.The EU Bluecard Regime makes it easier for highly skilled workers outside of the EEA to enter the country. Poland accepts EU Blue Card applications from highly skilled third-country nationals who have an employment contract with a Polish company and possess the required qualifications.

8.3 Visa/Travel Restrictions

The work permit holder must have worked and resided in Poland lawfully for at least two continuous years before becoming eligible to sponsor accompanying family members for residence in Poland. Dependants and family members that are non-EU/EEA must enter Poland as tourists and obtain visas according to their nationality. Businesses that bring workers with family members that are EU/EEA/Swiss nationals can enter Poland with a valid identification document confirming their citizenship. Family members of EU/EEA/Swiss nationals who are not citizens of these countries can enter Poland with a valid travel document and a visa, if required. After a continuous period of residence of five years on Polish territory, an EU/EEA/Swiss national obtains a right of permanent residence. The European Parliament and the Council of the European Union have tightened the Schengen Borders Code regulations on external border crossings. Effective April 7 2017 all persons crossing an external border will undergo thorough checks.

Source: BMI Labour Market Risk

9. Risks

9.1 Sovereign Credit Ratings


Rating (Outlook)Rating Date
Moody's
A2 (Stable)12/05/2017
Standard & Poor'sA- (Stable)15/01/2016
FitchA- (Stable)08/12/2017

Source: Moody's, Standard & Poor's, Fitch Ratings

9.2 Competitiveness and Efficiency Indicators


World Ranking
201620172018
Ease of Doing Business Index
25/189
24/190

27/190
Ease of Paying Taxes Index
58/189
47/19051/190
Logistics Performance Index
33/160
N/AN/A
Corruption Perception Index
29/176
36/180N/A
IMD World Competitiveness33/6338/63N/A

Source: World Bank, IMD, Transparency International

9.3 BMI Risk Indices


World ranking
201620172018
Economic Risk Index Rank36/202
Short-Term Economic Risk

6672.571.7
Long-Term Economic Risk Score64.172.670.2
Political Risk Index Rank27/202
Short-Term Economic Risk76.570.869.6
Long-Term Economic Risk Score77.981.681.6
Operational Risk Index Rank30/201
Operational Risk Index Score67.269.258.7

Note: NB scores rated from 0-100, with 0= Highest Risk, 100= Lowest Risk
Source: BMI Research

9.4 BMI Political and Economic Risk Indices

BMI Risk Summary - Q2 2018

POLITICAL RISK
Policies put in place by the ruling nationalist and populist Law and Justice (PiS) party will continue to damage Poland's reputation as a stable and investor friendly country with strong democratic institutions. PiS' control of both the lower and upper house, its dismantling of Poland's constitutional court, and increasing control of state media, have left government policies without crucial checks and balances. This risks triggering a political crisis and isolating Poland politically on a European Union (EU) level, following the European Commission's decision to launch an infringement proceeding against Warsaw. Furthermore, right-wing PiS policies will continue to increase tensions with the opposition and lead to further anti-government protests.

ECONOMIC RISK
Poland's long-term economic risk rating reflects the country's solid growth trajectory and steady convergence with Western EU member states. Poland's large domestic market, by regional standards, provides a measure of protection against a volatile global economy and uncertainty regarding eurozone stability and UK's decision to leave the EU. The risk score has fallen slightly due to the PiS government's policies and expansionary fiscal policies in recent years. Nevertheless, real GDP growth will remain strong over our ten year forecast trajectory, public debt is low, and unemployment has fallen sharply to its lowest level since Poland's independence in 1991.

OPERATIONAL RISK
Poland offers an attractive investment destination, benefitting from access to a large domestic and regional consumer market, EU membership and a diversified domestic manufacturing base, all of which are key elements that support healthy growth in trade and investment. The country boasts a well-developed domestic financial market and broad investment incentives. Cross-border trade is facilitated by strong road and rail connections to neighbouring states as well as international maritime connections. There are some key risks to consider, however, including the government's increasingly populist leanings, high exposure to weak demand in key export markets, a shrinking labour pool and uncompetitive utility costs.

Graph: Poland short term political risk index
Graph: Poland short term political risk index
Graph: Poland long term political risk index
Graph: Poland long term political risk index
Graph: Poland short term economic risk index
Graph: Poland short term economic risk index
Graphi Poland long term economic risk index
Graphi Poland long term economic risk index

Note: Higher score = Lower risk
Sources: BMI Economic, Political Risk Indices, BMI Country Risk summaries

9.5 BMI Operational Risk Index


Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Poland Score69.355.669.272.380.3
Central and Eastern Europe Average58.354.260.161.257.9
Central and Eastern Europe Position (out of 8)24212
Emerging Europe Average55.553.856.856.055.2
Emerging Europe Position (out of 28)210313
Global Average49.849.850.049.349.9
Global Position (out of 201)2956322526

Noted: 100 = Lowest risk; 0 = highest risk
Source: BMI Operational Risk Index

Graph: Poland vs global and regional averages
Graph: Poland vs global and regional averages
Country
Operational Risk IndexLabour Market Risk Index
Trade and Investment Risk IndexLogistics Risk Index
Crime and Secruity Risk Index
Belarus5756.559.262.749.5
Czech Republic69.957.77070.281.7
Estonia70.859.177.270.576.3
Hungary62.855.663.462.469.7
Latvia6557.568.467.966
Lithuania67.155.271.871.369.9
Moldova45.539.849.248.744.2
Poland69.355.669.272.380.3
Russia5563.656.263.436.8
Slovakia
62.949.767.760.773.5
Ukraine44.454.945.649.527.5
West Bank and Gaza21.53430.247.436.8
Syria12.928.126.44330
Yemen15.621.917.331.923
Regional Averages60.955.063.463.661.4
Emerging Markets Averages46.84847.545.846.1
Global Markets Averages49.849.85049.349.9

Note: Higher Score = Lower Risk
Source: BMI Operational Risk Index

10. Hong Kong Connection

10.1 Hong Kong’s Trade with Poland

Graph: Poland major export commodities to Hong Kong (2017)
Graph: Poland major export commodities to Hong Kong (2017)
Graph: Poland major import commodities from Hong Kong (2017)
Graph: Poland major import commodities from Hong Kong (2017)
Graph: Poland merchandise exports to Hong Kong
Graph: Poland merchandise exports to Hong Kong
Graph: Poland merchandise imports from Hong Kong
Graph: Poland merchandise imports from Hong Kong

2016
Growth rate
Number of Poland residents visiting Hong Kong29,233
1.72%
Number of Poland citizens residing in Hong KongN/A
N/A

Source: Hong Kong Tourism Board, Hong Kong Immigration Department


2016
Growth rate
Number of European residents visiting Hong Kong1,909,8252.51%
Number of Emerging Europe residing in Hong KongN/A
N/A

10.2 Commercial Presence in Hong Kong


2016
Growth rate(%)
Number of EU companies in Hong KongN/A
N/A
- Regional headquarters447
- Regional offices717
- Local offices948

Source: Hong Kong Census & Statistics Department

10.3 Treaties and Agreements between Hong Kong and Poland

  • No specific Double Taxation Avoidance Agreements (DTAs) exists between the two, though mainland China has a DTA with Poland covering dividends (10%), royalties (0/10%) and interest (7/10%)
  • Investment Promotion and Protection Agreements/Investment Agreements (IPPAs)

Source: Hong Kong Department of Justice

10.4 Chamber of Commerce (or Related Organisations) in Hong Kong

Polcham

The Poland Hong Kong Chamber of Commerce was establised in 2009 with the aim of supporting individuals and businesses based locally and also promoting trade, networking and investment in Hong Kong.

Address: Level 3A Causeway Corner, 18 Percival street, Causeway Bay, Hong Kong
Email: info@polcham.hk

Source: Directory of Hong Kong Trade and Industrial Organisations, Hong Kong Trade and Industry Department

Polish Consulate General in Hong Kong, Hong Kong

Address: Room 2506, Level 25, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong
Email: hongkong.kg.info@msz.gov.pl
Hours of Business: Monday to Friday, 9:00 a.m. - 5:00 p.m.
- Please note: Consulate opening hours can vary. Always contact the Consulate before a visit.
Honorary Consul: Miroslaw Adamczyk, Consul General
Tel: (852) 2840 0779
Fax: (852) 2596 0062

Source: Hong Kong Protocol Division of Government Secretariat

10.5 Visa Requirements for Hong Kong Residents

  • Visa Application must be completed prior to travel. The Consulate General of the Republic of Poland kindly informs all applicants, that it is obligatory to register the visa application on-line prior visiting the Consulate. The visa process takes 15 calendar days counting from the date of submitting the application. However, the time may vary according to the case nature and number of applications submitted at the same time.
  • All the documents must be translated to English language.
  • Visa fee: HKD600 (or EUR60) in cash only.
  • The Consulate reserves the right to require additional documentation at any time. Generally, HKSAR passport holders do not need a visa to the Schengen area for a stay up to 90 days in any 180-day period. For information on the stay period in the Schengen area, please visit the website of the European Commission: click here.

Source: Visa on Demand


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