2010 Investment Climate Statement - Poland

2010 Investment Climate Statement
Bureau of Economic, Energy and Business Affairs
March 2010

Openness to Foreign Investment

Foreign investment has been at the center of Poland’s economic transformation since 1989. It is broadly welcomed not only as a source of finance, but also as a means of technology transfer, human resource development, and Polish integration into global supply chains and R&D. Since 1990, Poland has attracted more than $160 billion in foreign direct investment (FDI), principally from Western Europe and the United States. Investors report they are attracted to Poland’s young, well educated, low-cost work force; its proximity to major markets; its membership in the European Union (EU); and its political stability. Foreign companies invest largely, though not exclusively, to service Poland’s dynamic local market of nearly 40 million people and the larger European market of nearly 500 million. Foreign companies generally enjoy unrestricted access to the Polish market. However, Polish law limits foreign ownership of companies in selected strategic sectors, and limits foreign acquisition of real estate, especially agricultural land.

Despite Poland’s welcoming attitude, many foreign investors complain of an overly burdensome regulatory environment. Poland ranked a relatively low 72 in the World Bank’s 2009 “Doing Business” report, due in part to burdensome business regulation, a cumbersome tax system, and slow permitting. In recent years, Poland has introduced reforms to improve the climate for foreign and domestic investment. In 2006-2009, telecommunication regulations were relaxed, the foreign exchange law was simplified, the overall tax burden was reduced, and new acts shaping public-private partnerships came into force. Work to improve the bankruptcy law and the administration of real estate registers continues, while national and local governments are working to strengthen the “One-stop shop” process of easing new business registration.

EU Integration

Integration into the EU has been a gradual process. In the years prior to Poland’s May 1, 2004, accession to the EU, Polish governments undertook widespread institutional and regulatory reforms. Adoption of EU legislation allowed Poland to reform the way in which its economy is regulated and restrict government intervention in the private sector. Changes in areas such as financial markets, company and competition law, accounting, and intellectual property rights have created a better environment for business.

When it acceded to the EU, Poland committed to adopt the Euro at a future date not specified. Prime Minister Tusk’s effort to bring Poland into the eurozone in 2012 was derailed by the global economic crisis. Though no new date has been set, 2015 is widely discussed as Poland’s earliest opportunity.

Since 2004, Poland’s accession has come to be perceived by many firms as having reduced Poland's country and investment risks. EU membership also resulted in an influx of billions of Euros in new financial resources such as structural funds and the Cohesion Fund, which can be used to support investments in transport infrastructure, environmental protection, and introduction of new production technologies.

Major Laws and Regulations

The basic legal framework for establishing and operating companies in Poland, and in particular companies with foreign investors, is found in the Commercial Companies Code which entered into force in January 2001, and the Law on Freedom of Economic Activity, which entered into force on July 2, 2004. Also relevant is the Act on European Economic Interest Grouping and the European Company of March 4, 2005 which allows a "European Company" to move its registered office from one EU state to another without losing legal personality.

With few exceptions, foreign investors are guaranteed national treatment. Companies that did not have any subsidiary established in an EU country before May 1, 2004, but that conduct, or plan to commence business operations in Poland must observe all EU regulations, and may not be able to benefit from all privileges to which EU companies are entitled.

Under the amended 2000 Commercial Companies Code companies can be established as joint-stock companies, limited liability companies, limited joint-stock partnerships, professional partnerships, registered partnerships, and limited partnerships. These corporate forms are available to a foreign investor, provided they come from a member state of the EU or the European Free Trade Area (EFTA), or have the right of permanent residence in Poland and are based in a country offering reciprocity for Polish enterprises. The United States offers such reciprocity. If the above conditions are not met, the investor may only establish one of the following; a limited partnership, a limited joint-stock partnership, a limited liability company, a joint-stock company or they may purchase shares of such entities.

According to the Law on the National Court Register of October 1997, all companies, commercial partnerships, and sole proprietorships must be registered in the Register of Entrepreneurs, a part of the National Court Register managed by district courts. The Register of Entrepreneurs is open to the public. Post is unaware of any laws or regulations specifically authorizing private firms to adopt articles of incorporation or association which limit or prohibit foreign investment, participation or control.

Under the Law on Freedom of Economic Activity, branch offices are registered in the National Court Register under the name of the foreign investor, with the notation "branch in Poland." A branch office can perform any activity within the scope of business of the parent foreign investor that established the branch. In contrast, representative offices must limit their activities to promotion and advertising for the parent foreign investor. Representative offices are registered in a special log kept by the Minister of Economy. The law specifies certain situations in which registration may be refused (e.g., if required documents are not submitted on time or on national security grounds).

Screening and Licensing

Poland does not have any general screening mechanism for entry and establishment of businesses by foreign firms. Authorization requirements and foreign equity limits do exist for a limited number of sectors, such as broadcasting and air transport. The Law on Freedom of Economic Activity requires a permit from the Treasury Ministry for certain major capital transactions (i.e., to establish a company when an enterprise owned wholly or partially by a legal resident is contributed in-kind to a company with foreign ownership.) A permit from the Treasury Ministry is also required to lease assets to or from a state-owned enterprise. Licenses and concessions for defense production and management of seaports are granted on the basis of national treatment for investors from OECD countries.

Polish law limits non-Polish ownership to 49% of a company’s capital shares in the air transport and the radio and television broadcasting sectors. This requirement does not apply to EU investors. Waivers of these requirements are not available. Furthermore, in the insurance sector at least two members of management boards must speak Polish. In the broadcasting sector, the number of Polish citizens on supervisory and management boards must be higher than the number of foreigners.

All investors must obtain governmental concessions, licenses or permits to engage in certain activities. Sectors in which concessions are required include broadcasting, aviation, energy, weapons, mining, and private security services. Some examples are;

-- the Polish Financial Supervision Authority (KNF) grants authorization to operate insurance companies and investment funds, and grants licenses for brokerage and banking activities;
-- the National Broadcasting Council issues radio and television broadcasting licenses;
-- the Economy Ministry issues permits for wholesale trade in alcohol, and wholesale and processing of precious stones and metals;
-- the Health Ministry authorizes permits for the pharmaceutical and medical materials sectors;
-- the Transport Ministry provides licenses for air, road and rail transport, and for mail services. Recent legislation removed the requirement for a concession to construct highways or express roads in an effort to facilitate development of this sector;
-- the Interior Ministry licenses the defense industry and security services;
-- local governments provide permits for buses and taxis, waste disposal, pharmacies, and extraction of minerals.

The June 2004 Law on Freedom of Economic Activity introduced “regulated activity,” which allows for engagement in certain activities on the basis of an entry into the regulated activity register. For example:

-- telecom, postal and courier services
-- manufacturing of tobacco products, manufacturing and bottling of alcohol and wine.

Other regulated activities can be found in the Law. In an effort to remove barriers to doing business, the government announced its intention to amend the Law on Freedom of Economic Activity, removing requirements for permits and concessions and replacing them with entries in the regulated activity register. On March 31, 2009 a "one window" option for business registration became available. Also an e-platform with records of all economic activity entities (Centralna Ewidencja i Informacja o Dzialalnosci Gospodarczej) is scheduled to launch in July, 2011.

As part of the continuing efforts to harmonize Polish law with European Union requirements, a new Polish Classification of Economic Activities ("2007 PKD") came into effect on January 1, 2008. Businesses established before that date had until December 31, 2009 to update all filings in which their business activities were specified through the use of PKD numbers. The system automatically changed the old classification codes to new ones for those who neglected to do it themselves. (These can be checked at: http://www.stat.gov.pl/regon/)

Limits on Foreign Ownership of Agricultural Land and Real Estate

Sale of agricultural land to foreigners has long been a sensitive issue. Since EU accession, citizens of the EU-27, as well as Iceland, Liechtenstein and Norway, generally do not need permission to purchase real estate, or to acquire or receive shares in a company owning real estate in Poland. One exception is in the acquisition of agricultural real estate. Poland was granted consent to introduce a transition period, lasting until 2016, with respect to unrestricted acquisition of agricultural real estate by foreigners (with certain exceptions). Citizens from countries other than the EU-27, Iceland, Liechtenstein and Norway are allowed to own an apartment, 0.4 hectares (4,000 square meters) of urban land, or up to one hectare of agricultural land without a permit. Better classes of agricultural land require approval even by the Minister of Agriculture for legal transfer. Such land is not available to foreign ownership.

Citizens from countries other than the EU-27, Iceland, Liechtenstein and Norway must still obtain a permit from the Ministry of Internal Affairs and Administration (with the consent of the Defense and Agriculture Ministries), pursuant to the Act on Acquisition of Real Estate by Foreigners. A foreign business intending to buy real estate in Poland may apply for a provisional permit from the Ministry of Interior and Administration, which is valid for one year from the date of issue, during which time the company is expected to assemble documents demonstrating it is a viable business. Permits may be refused for reasons of social policy or public security.

A second form of land title is the perpetual lease, under which the lease holder generally controls the property for 40 to 99 years, and which can be extended for up to 99 additional years. Such a perpetual tenant has the right to dispose of its interest in the land by sale, gift, or bequest. Companies report that procedures to acquire real estate are transparent and that the process is not burdensome.

Laws pertaining to agricultural land available for lease from the Ministry of Agriculture’s property agency currently are under review with new leases suspended. This action may impact larger food processors in dairy or meats as these enterprises need additional land to comply with environmental regulations. The draft law would void current leases now valid for ten years and has chilled new agricultural investments, causing concern among U.S. investors.

Privatization Program

The pace of privatization which had slowed in the last few years accelerated again in 2009. In 2010, the government hopes to raise $8.5 billion (PLN 25 billion) from privatization revenues, compared with $2.2 billion (PLN 6.9 billion) in 2009. Targeted industries include shipbuilding, coal, electric power, gas, finance, chemical, and defense. In general, employees and trade unions welcome private investors, whose involvement in a company is often seen as a change for the better.

With relatively few exceptions, in major privatizations the Polish government has invited foreign investors to compete for a strategic interest. In general, bidding criteria have been clear and the process has been transparent. Some commentators have expressed concern about the level of foreign ownership of the Polish economy, especially in the banking sector, where foreign-controlled banks hold around 80% of assets.

Discrimination against Foreign Investors

Generally, foreign investors receive similar treatment to domestic investors, both at the time of initial investment and after an investment has been made. In the past, there were complaints about discrimination in public procurement contracts resulting from provisions in legislation favoring domestic firms. Since May 2004, all public authorities must apply the Public Procurement Law of January 2004, as amended by the November 2007 consolidated Act on Public Procurement, when selecting suppliers and service providers in public contracts. Under this law, a joint venture between foreign and domestic firms qualifies as "domestic" for procurement considerations. On joining the EU, Poland acceded to the WTO Government Procurement Agreement.






TI Corruption Index









Heritage Economic Freedom









World Bank Doing Business





Note: Poland is not on the MCC (Millenium Challenge Corporation) list
Source: http://www.transparency.org

Conversion and Transfer Policies

Foreign exchange is widely available through commercial banks as well as exchange offices. Payments and remittances in convertible currency may be made and received through a bank authorized to engage in foreign exchange transactions, and most banks have such authorization. Foreign investors have not complained of any significant difficulties or delays in remitting investment returns such as dividends, return of capital, interest and principal on private foreign debt, lease payments, royalties, or management fees.

Amendments to the Civil Code and the Foreign Exchange Law from October 2008 lift the requirement for most payments between residents in Poland to be made in Polish zloty. Foreign currencies can freely be used for settling accounts.

Poland provides full IMF Article VIII convertibility for current transactions. The October 1, 2002 Polish Foreign Exchange Law, as amended, fully conforms to the OECD Codes of Liberalization of Capital Movements and Current Invisible Operations.

The Foreign Exchange Law distinguishes between residents and non-residents. It defines residents as natural persons whose center of vital (economic or personal) interests is in Poland or individuals who spend more than 183 days in a tax (calendar) year in the country; companies having their registered office in Poland; and branches, representative offices and enterprises created by non-residents within the territory of Poland. Poland's ability to tax this income, however, may be limited by the provisions of an applicable tax treaty. Under the Law, non-residents include: natural persons with foreign residence; companies seated outside Poland; and branches, representative offices and enterprises created by residents outside the territory of Poland.

Countries that are members of the European Economic Area (EEA) and OECD are accorded the same treatment as countries that are members of the EU. In general, foreign exchange transactions with the EU, OECD and EEA countries are not restricted.

The Foreign Exchange Law also distinguishes between;
(i) countries that are members of the EU, EEA or OECD, and (ii) other "third" countries. A number of transactions/payments -- particularly those with third countries -- require individual foreign exchange permits issued by the president of the National Bank of Poland (NBP). Such permits are issued upon request unless doing so would be contrary to the public interest or Poland's international obligations. Also, a general foreign exchange permit regulation specifies some exceptions to the permit requirement, particularly for business relations with countries with whom Poland has signed a bilateral investment treaty (BIT).

Except in cases where a permit is required (which are limited), a foreigner may convert or transfer currency to make payments abroad for goods or services and also may transfer abroad his share of after-tax profit due from operations in Poland. Capital brought into Poland by foreign investors may be freely withdrawn from Poland in instances of liquidation, expropriation, or decrease in capital share. Full repatriation of profits and dividend payments is allowed without obtaining a permit. However, a Polish company (including a Polish subsidiary of a foreign company) must file and pay withholding taxes with the Polish tax authorities on any distributable dividends unless a double taxation treaty is in effect. A double taxation treaty is in place between Poland and the United States. An exporter may open foreign exchange accounts in the currency it chooses.

Foreign exchange regulations require some information to be reported to the NBP. As of January 1, 2010, new reporting requirements apply. These can be found in the Journal of Laws no 184 of November 3, 2009, item 1437 (Dziennik Ustaw 184 z 3.11.2009, pozycja 1437).

Poland does not prohibit remittance through a legal parallel market; including one utilizing convertible negotiable instruments (such as dollar-denominated Polish bonds in lieu of immediate payment in dollars). As a practical matter, however, such payment methods are rarely, if ever, used.

Expropriation and Compensation

Article 21 of the Polish Constitution states; "expropriation is admissible only for public purposes and upon equitable compensation." The Law on Land Management and Expropriation of Real Estate provides that property may be expropriated only in accordance with statutory provisions such as those concerning construction of public works, national security considerations or other specified cases of public interest. Full compensation at market value must be paid for the expropriated property. Building new major highways in Poland involves some expropriation of land.

Dispute Settlement

Some investment disputes have arisen in the last few years. Often they have involved state-owned enterprises, difficulties obtaining required permits, or government actions in sectors subject to heavy regulation.

Among the disputes:

-- Dutch insurer Eureko and the Polish government on October 2, 2009, settled a decade-long dispute over Eureko’s purchase of a controlling stake in Polish Insurance giant PZU. The end of the dispute opens the door for PZU’s privatization, planned for 2010.

-- A power plant, in which a U.S. company invested EUR 30 million, has been closed since 2006 due to failure by the Polish government to enforce tariffs set by the Polish regulator. The U.S. investor has been unable to divest itself from this now-bankrupt enterprise.

--Since 2003, a U.S. – Canadian joint venture investment group has been involved in a dispute for compensation related to the construction and operation of a grain handling import/export facility in Northern Poland. The dispute is proceeding through Polish Arbitration Court with the U.S. – Canadian investors seeking financial damages. The legal case is ongoing

The sale of state-owned enterprises, the government's move towards full adoption of EU regulations, and the passage of legislation more clearly defining the role of the state in economic activity should all lead to a reduction in investment disputes.

Legal System

Like the "civil" French and German legal systems, the Polish legal system is code-based and prosecutorial. The judiciary acts independently. The Polish judicial system generally upholds the sanctity of contracts. Monetary judgments are usually made in local currency. Generally, foreign firms are wary of the slow and over-burdened Polish court system, preferring to rely on other means to defend their rights. Contracts involving foreign parties frequently include a clause specifying disputes will be resolved in a third-country court or through offshore arbitration.

The Bankruptcy Law of February 28, 2003 was amended in 2009. The amendments, eliminating defective or imprecise provisions and encouraging broader use of rehabilitation proceedings, entered into effect in May 2009. Declarations of bankruptcy may be filed either by a company’s creditors or its governing bodies (i.e., its Board of Directors or another body, depending on the corporate form of the debtor). Creditors of an insolvent company must file a claim in writing. The Creditors Preliminary Assembly has the right to decide, at the initial stage of the bankruptcy process, whether a work-out agreement is possible or whether assets of a bankrupt company should be liquidated. Liabilities are repaid in the following order: cost of legal proceedings; employee remuneration; liabilities to the State and Social Security Fund (ZUS) secured by a mortgage or pledge; other liabilities secured by mortgages or pledges; other taxes and other public liabilities; other liabilities. The Mortgage Banking Act of 1997 and the Law on Registered Pledges and Pledge Registry of 1997 protect qualified mortgagors and secured creditors against subsequent tax liens and other secured and unsecured claims.

A new institution in Polish law, consumer bankruptcy, appeared in the first months of 2009. The Consumer Bankruptcy Act of December 2008 allows for debtors who have fallen into a state of insolvency through no fault of their own to exit the debt spiral. The new regulation benefits not only the general public, but also entrepreneurs who are the creditors of insolvent debtors. An individual’s ability to invoke this bankruptcy is limited to once every ten years.


A permanent arbitration tribunal to settle disputes arising from international commercial activities operates through the Polish Chamber of Commerce. There are a number of arbitration bodies associated with chambers representing various sectors of the economy, employers’ confederations or local chambers of commerce. It is also possible to appoint ad hoc conciliatory tribunals to settle a particular dispute.

Decisions by an arbitration body are not automatically enforceable in Poland. They must be confirmed by a Polish court. Under the Polish Civil Code, judgments of foreign courts are accepted and enforced by local courts. Poland is party to four international agreements on dispute resolution, with the Ministry of Finance acting as the government's representative:

1. The 1923 Geneva Protocol on Arbitration Clauses
2. The 1958 New York Convention on the Recognition and Enforcement of International Arbitration Awards
3. The 1961 Geneva European Convention on International Trade Arbitration
4. The 1972 Moscow Convention on Arbitration Resolution of Civil Law Disputes in Economic and Scientific Cooperation

Poland is not a member of the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

Performance Requirements and Incentives

Poland has not notified the WTO of any measures it maintains that are inconsistent with its obligations under the TRIMS Agreement.

Poland generally does not impose performance requirements for establishing or maintaining an investment. However, in previous privatizations of certain large companies the government and the purchasers negotiated terms that included performance requirements.

In April 2002, the Polish Parliament passed a law addressing financial support for investments. In line with this law a company investing in Poland, whether foreign or Polish, may receive assistance from the Polish government. In June 2005, the Council of Ministers adopted a document outlining the system of financial support for major investment projects of special importance to the Polish economy. These incentives are subject to relevant EU requirements and have on occasion been found non-compliant by EU authorities.

A number of incentives are potentially available to foreign investors in Poland:

- income tax and real estate tax exemption in Special Economic Zones (SEZ);

- investment grants of up to 50% (70% for small- or medium-sized enterprises) of investment costs;

- grants for research and development;

- grants for other activities, such as environmental protection, training, logistics or creating renewable energy sources;

- potential partial forgiveness of commercial debt owed to a state-owned bank incurred for the acquisition of technology; and

- varying incentives related to acquiring or developing new technology.

Regulations on special economic zones and on public assistance to entrepreneurs provide the basis for exemptions from income tax or other incentives. These were reviewed as Poland negotiated its entry into the EU, and EU norms on the allowable level of public assistance to private companies apply. Since April 2005, shared services centers providing accounting, auditing, and bookkeeping services, as well as call centers, may be located in SEZs.

In 2007, changes to tax exemption limits were introduced as a result of changes in the classification of Polish regions for public aid purposes. According to the 2007-2013 map of regional aid, the maximum admissible amount of regional aid in Poland is:

- Warsaw 30%
- Mazovia region (through 2010) 40% and 30% 2011-2013
- Pomerania, West Pomerania 40%
Upper and Lower Silesia,
and Wielkopolska region
- Other regions of Poland 50%

For small and medium size enterprises, the maximum aid amount can be increased by an additional 20 and 10 percentage points respectively. Also, there is a special formula applied for calculating the admissible amount of aid for investment projects where qualifying expenditures exceed EUR 50 million.

Large investments considered crucial for the Polish economy may qualify for the Multi-Annual Support Program. This program usually combines different types of aid, e.g. employment grants, exemptions from corporate income tax in SEZs and the possibility of a preferential purchase price for land owned by the government.

The level of tax or other investment incentives is based on the relative prosperity of the region where the investment is made, the size of the investment, the number of jobs created, and the sector of the economy involved. Strategic investors may obtain an exemption from or reduction in real estate tax, as well as additional local incentives. All such exemptions must be negotiated with local authorities.

Offset Requirements

The Polish government imposes offset requirements on some defense-related contracts. Its stated policy objective is to ensure the participation of foreign suppliers in the restructuring and development of the Polish economy, in particular of the defense industry, of Polish exports, of technology transfer, of Polish universities and R&D centers, and of the knowledge economy.

Legislation adopted in 1999 and the Regulation of the Council of Ministers of May 18, 2007, governs the imposition of “compensation agreements” concluded in connection with contracts for deliveries from a foreign supplier of armament or military equipment. Agreements are obligatory when the value of contracts for the delivery of armaments or military equipment exceed an equivalent of EUR 5 million with respect to one foreign supplier within three subsequent years. Further information can be found in English on the Ministry of Economy’s website at the following URL: http://www.mg.gov.pl/English/ECONOMY/Offset+Programmes/Basic+information/

Foreign Participation in Government Financed Research

Foreign companies have not participated in government-funded research and development projects, managed by the Committee for Scientific Research. Nonetheless, there is no proscription against such participation with the exception of biotechnology. At present, there are over 100 R&D institutions backed by a majority of foreign capital (including American). Of these, 56 belong to foreign investors and are carrying out research across various sectors of the economy. According to current law, private companies cannot conduct research with public institutions in the area of agricultural biotechnology.

Visa and Work Permit Requirements

Foreign investors can and do bring personnel to Poland. Shortages of labor in some sectors of the Polish economy intensify inflows of foreign workers to Poland.

All EU citizens, including workers from newly admitted Romania and Bulgaria, are free to work in Poland without first obtaining a work permit. In addition Poland has opened its labor market to workers from member countries of the European Free Trade Area (EFTA).

On February 1, 2009, amended regulations on employment of foreigners entered into force. They simplify the procedure and reduce the amount of required documents. This is a pilot system which will be assessed in 2010 and modified depending on the situation in the labor market and the needs of the economy.

Citizens from neighbor countries with Poland, i.e. Ukraine, Belarus and Russia, and countries with which Poland cooperates with regard to work migration can undertake temporary work (up to six months per year) without a permit. It does not mean they do not need a visa allowing them take up employment in Poland.

U.S. citizens continue to be subject to Poland's work and residency permit regulations, unless they have otherwise established permanent residency in Poland or elsewhere in the EU. Poland's visa and work permit regulations offer the possibility for non-EU/EFTA citizens to live and work in Poland under certain conditions. However, in practice, foreign firms and persons have experienced difficulty in obtaining both visas and work permits. Poland requires an applicant to receive his or her visa in his or her home country, rather than in Poland or in neighboring countries. This procedure is often burdensome. Work permits are issued by local authorities, which vary greatly in the speed and willingness with which they issue permits.

As of January 1, 2010, processing of applications for work permits for non-EU/EFTA citizens was transferred from provincial employment offices to provincial voivodship offices (the same offices that are responsible for issuance of residency permits). This is a result of the Polish government’s declared effort to simplify the procedures for foreigners who want to work and establish residence in Poland, and to contain these procedures within one branch of the government.

Temporary employment agencies often encounter problems when employing non-EU or EFTA citizens in Poland, because of varying interpretations of ambiguous legislation and regulations. The Act on the Promotion of Employment and Labor Market Institutions allows employment agencies to obtain work permits for foreigners seeking work on a temporary basis in Poland. In practice, a number of provincial employment offices are reluctant to issue work permits for such persons. In order to employ such a person, permission must be granted by the appropriate provincial authority overseeing the official address of that company. According to some officials in provincial employment offices, foreigners may not be temporary employees and employment agencies cannot employ foreigners as the place of work must correspond to the address of the company. Other officials have different interpretations of the same regulations. For this reason, employers using employment agencies should stipulate the address of both the agency and the precise location of an applicant’s place of work.

Discriminatory or Preferential Export/Import Policies

The government supports exporters through export credit guarantees from a state-owned insurance entity (KUKE). KUKE provides credit guarantees for all firms registered in Poland (including foreign firms and firms with foreign capital). State-owned Bank Gospodarstwa Krajowego (BGK), on the basis of an agreement signed in 2002 with the Ministry of Finance on subsidies of interest and export credits, makes it easier for exporters to obtain cheaper credit to finance exports.

Right to Private Ownership and Establishment

Domestic and foreign private entities have a general right freely to establish, acquire or dispose of a business, and to engage in almost all forms of lawful economic activities. Participation of foreigners is restricted in the broadcasting and air transportation sectors, while foreign ownership of other than a small amount of real estate property requires a government permit.

The Civil Code, as amended, regulates property rights among individuals or legal entities. Civil Code regulations are based on the principles of equality of all parties regardless of their ownership status, equivalency of obligations, discretion, protection of private ownership, and freedom of contracts.

Protection of Property Rights

Poland has a non-discriminatory legal system accessible to foreign investors that protects and facilitates acquisition and disposition of all property rights, including land, buildings and mortgages. Many investors -- foreign and domestic -- complain that the judicial system is extremely slow. Foreign investors often voice concern about frequent or unexpected changes in laws and regulations. The Polish government continues to work on Civil Code amendments.

As regards real property, the 1997 Mortgage Banking Act provided that a recorded mortgage by a licensed mortgage bank takes priority over subsequent tax liens and other secured and unsecured claims. Outstanding residential mortgage debt grew rapidly from 2005 - 2008. However, in comparison to most Western countries, the mortgage market in Poland is still relatively small at over 15% of GDP.

As regards chattels and personal property, the 1997 Law on Registered Pledges and Pledge Registry (with later amendments) provided protections for secured creditors, and established a new registry system. Creditors may place liens on assets and rights, both in the present and future.

Poland ratified the WIPO Performance and Phonograms Treaty on October 21, 2003, and the WIPO Copyright Treaty on March 23, 2004. Piracy of intellectual property still remains a problem in Poland. To comply with its obligations to the EU and under the WTO TRIPS Agreement, in 2000 Poland adopted comprehensive legislation governing intellectual property rights. Upon EU accession, the Minister of Culture issued a regulation mandating creation of a register of information concerning optical disk production and identification codes. In May 2007, the Parliament updated regulations governing patents, trademarks, and other industrial property. After these changes, the length of protection afforded to proprietary research test data submitted by pharmaceutical companies now matches EU standards. In May 2007, the parliament closed a loophole that had blocked prosecution of downstream sellers of pirated goods. The Ministry of Culture heads the Team for Counteracting Infringements of Copyright and Related Rights that produces an annual strategy for improving respect for intellectual property rights in Poland. Within the framework of the above group a team to combat counterfeit medicines has also been formed. Nevertheless, internet piracy remains a problem. Other challenges are a lack of competition among entities responsible for collecting and distributing royalties for use of intellectual property.

Transparency of Regulatory System

Regulatory unpredictability and high levels of administrative red tape are recurring complaints of investors. Foreign and domestic investors must comply with a variety of laws concerning taxation, labor practices, health and safety, and the environment. Complaints about these laws, especially the tax system, center on the lack of clarity and often-draconian penalties for minor errors. Under the Law on Freedom of Economic Activity, inspections are fewer and shorter. Establishment of the Central Anti-Corruption Office (CBA) in 2006 increased the number of institutions authorized to perform inspections in companies. However, the CBA is entitled to perform inspections of companies only in cases where the Treasury's interest is linked with a business interest (e.g. cases where a government official carries out economic activity, or government officials make decisions in such areas as privatization, public tenders, licensing, exemptions, quotas, or guarantees favoring certain firms or persons).

The government is working on a complex reform package aimed at streamlining bureaucratic hurdles, such as procuring the licenses and permits required to open a business. Although similar reform efforts in the past have failed to win parliamentary approval, the Tusk government managed to introduce amendments to a number of business related regulations in such areas as foreign exchange, taxes, public procurement and consumer bankruptcy, creating a friendlier environment for entrepreneurs. It has also prepared, and the Parliament passed in July, the Act to Ease the Effects of the Economic Crisis on Workers and Companies. This introduces more flexibility in working hours and will remain in force until the end of 2011.

Revisions to the corporate tax code, which started in 1999, improved transparency and lowered rates. Since 2004, the corporate income tax (CIT) rate has been 19%. Amendments to the Act on Corporate Tax passed since 2006 include changes to definitions of a small tax payer and a foreign company and extend the catalogue of tax deductible costs. Amendments to the PIT and CIT Laws came into force in May 2009. These changes increase the income limit of a small tax payer to EUR 1.2 million (USD 1.6 million) from EUR 800,000 (around one million dollars) previously; unify PIT and CIT regulations with VAT regulations; and comply with the limit applied in the Law on Accountancy. The definition of a foreign company was modified using the OECD model. The list of tax deductible costs was expanded to include, for example, the costs of canceled (discontinued) investments.

Proposed laws and regulations are published in draft form for public comment, but in practice the period allotted for public consultations tends to be limited.


Global innovative pharmaceuticals companies consistently report that the process by which the Ministry of Health adds new products to the government’s drug reimbursement list remains nontransparent and slow. Meaningful access to the Polish pharmaceuticals market often hinges on whether a drug appears on the reimbursement list, since doctors most often prescribe drugs from the list. Purchases from it are subsidized by the Polish National Health Fund, making them more affordable for patients.

In 2008, the Ministry of Health adopted a practice of requesting recommendations on reimbursement applications from the Health Technology Assessment Agency. Pharmaceuticals companies contend that this has decreased transparency further and increased the delay in acting on reimbursement applications. Inability to add new products to the reimbursement list has seriously undermined U.S. and international innovative drug producers’ market position in favor of the Polish generics industry.

Furthermore, the Polish government has also taken other steps that according to the U.S. innovative pharmaceutical industry have had disproportionate impact on foreign companies. First, in July 2006, the Polish government instituted a 13% across-the-board price cut on all imported pharmaceutical products. In response to complaints that this measure was discriminatory, in November 2007 the Polish government cut the prices paid to domestic producers to reflect a 13% reduction in the value of imported inputs.

Standards-setting Organizations

Government agencies set industry standards. These agencies are not required to consult with domestic or foreign firms when establishing standards, but usually do so. Domestic firms tend to have more influence than foreign firms in the consultation process.

Efficient Capital Markets and Portfolio Investment

Capital Markets

Poland has healthy equity markets that facilitate the free flow of financial resources. Banks can and do lend to foreign and domestic companies. Companies can and do borrow abroad and issue commercial paper.

Equity markets include the Warsaw Stock Exchange (WSE), the "New Connect" trading platform, the Central Table of Offers ("CeTO"), an over-the-counter market, and the Electronic Treasury Securities Market, which operates on a basis similar to the NASDAQ. Since the opening of the WSE in 1991, the number of listed joint stock companies has increased from five to 378 and capitalization has grown from $142 million in 1991 to over $250 billion in 2009. On September 30, 2009, the WSE launched CATALYST, the first organized market in debt securities in Central and Eastern Europe. The new system is to facilitate and optimize corporate and municipal bonds issuance. In the first quarter of 2010, a market similar to the New Connect will be launched. It will be dedicated to small and medium sized enterprises owned by the State Treasury.

The regulatory framework for operations on the capital markets is contained in the 1997 Law on Public Trading and Securities, as amended. Since September 19, 2006, the Financial Supervision Commission has performed the regulatory tasks formerly performed by the Securities and Exchange Commission. In 2009, Polish regulations were adjusted to the provisions of the Transparency Directive, making the market more favorable for foreign investors and foreign public companies. Increasing attention is applied to market communication, protection of minority investors, counteracting fraud and insider trading.

The May 27, 2004 Act on Investment Funds allows for open-end, closed-end, mixed investment funds, and the development of securitization instruments in Poland. In general, no special restrictions apply to foreign investors purchasing Polish securities. However, corporate bonds are infrequently traded, and therefore can be difficult for foreign investors to buy. The organized debt securities market CATALYST, dedicated to corporate and municipal bonds, is expected to expand possibilities of investing in financial instruments. Investment funds, a segment of Poland’s capital markets which suffered the most during the global crisis, entered a recovery path in 2009.

Venture capital activity is conducted by investment funds, consulting companies, investment banks, special funds belonging to financial corporations, companies in the IT sector, and individuals. Many participants in this area are foreign companies or companies with a foreign shareholder that have funds and experience in this type of activity on the domestic market. Many companies established by venture capital funds operate in the IT and media sectors. In recent years the biggest increase in such investment was in the consumer goods sector, services and healthcare.

Credit Allocation

Credit allocation is on market terms. The government however, maintains some programs offering below-market rate loans to certain domestic groups, such as farmers and homeowners. Foreign investors and domestic investors have equal access to the Polish financial markets. Private Polish investment is financed from retained earnings and credits, while foreign investment is mainly direct investment, using funds obtained outside of Poland. Polish firms raise capital both in Poland and in other countries.

Legal, Regulatory, and Accounting Systems

Polish accounting standards do not differ significantly from international standards. In cases where there is no national accounting standard, the appropriate International Accounting Standards may be applied. As of January 1, 2008 all banks are obliged to follow the principles of the New Capital Agreement Basel II. These regulations increase sensitivity to risk and should lead to improved performance in the banking sector. Poland is in the process of harmonizing legal, regulatory, and accounting systems with those in the EU. The major international accounting firms provide services in Poland and are familiar with U.S., EU and Polish accounting standards.

Portfolio Investment

The Polish regulatory system fosters and supervises the portfolio investment market. Both foreign and domestic investors may place funds in demand and time deposits, stocks, bonds, futures and derivatives. The stock and Treasury bill markets are fairly liquid, but many other investments, such as Treasury bonds, are not.

The Polish Securities and Exchange Commission had a reputation as a strong regulator of the stock market. In September 2006, a Financial Supervision Commission was established, which assumed the duties of the Polish Securities and Exchange Commission. Since assuming those duties, the Financial Supervision Commission has maintained the reputation established by the Polish Securities and Exchange Commission.

Banking System

The banking sector is dominated by ten large banks. Of these, two are controlled by the Treasury Ministry, while the remaining eight are subsidiaries controlled by foreign commercial institutions. The Polish banking system is considered one of the best regulated and supervised in Central and Eastern Europe and weathered the global financial crisis of 2008/2009 better than many in the region. The Financial Supervisory Authority reported that Polish banks recorded a sector profit of nearly $3.2 billion (PLN 10 billion) in 2009, giving the sector one of the highest returns on equity in Europe. At the end of September 2009, the banking sector had total estimated assets of over $350 billion. Development of small and medium-size banks reduced concentration in the banking sector. In 2009, several mergers took place in the sector and more could follow. The share of the ten biggest banks in the sector’s assets fell to 62% from 63%, and in credits to 58% from 59%.

During the first nine months of 2009 owing to the increase in banks’ capital base, the stability of the banking sector somewhat increased and the potential of lending activity development improved. Foreign banks remained engaged in interbank lending and have been more supportive than might have been expected. The reason for that might be the parent banks’ commitments to roll over maturing redemptions under the European Bank Coordination Initiative.


Cross-shareholding arrangements are rare and play a minor role in the Polish economy.

Hostile Takeovers

Neither the government nor private firms have taken measures to prevent hostile takeovers by foreign or domestic firms. Hostile takeover attempts are still rare.

Competition from State Owned Enterprises

State-owned entities still dominate some sectors, most notably coal, chemicals, and utilities. The same standards are generally applied to both private and public companies with respect to access to markets, credit and other business operations such as licenses and supplies. Officials at various levels of government occasionally exercise their discretionary authority to assist state-owned enterprises. For example, tax authorities have not pressed some large, troubled state-owned enterprises to pay taxes to avoid forcing those enterprises into bankruptcy. Nevertheless, in line with EU standards governing competition, the commercial code that took effect in 2001 established a more level playing field. Since EU accession, government activity favoring state-owned firms has received careful scrutiny from Brussels.

In its 2009 report, the Supreme Chamber of Control (NIK) criticizes the “musical chairs” employment practices in State Owned Enterprises (SOE). The latest NIK report stressed frequent changes in management board positions, inadequate competencies of supervisory and management board members and the placing of Treasury Ministry representatives on supervisory boards of companies for which they are responsible as directors of departments in the Ministry. The Tusk government has introduced some changes improving transparency of the nomination mechanism for members of SOE supervisory and management boards.

Corporate Social Responsibility (CSR)

CSR is a relatively new idea in Poland and is not formally on the national agenda. Companies, employers’ organizations, non-governmental organizations, academic and government institutions are participating in the development of CSR in Poland in various ways. There is no specific legislation to promote CSR good practices among Polish companies, but various firms, mainly multinational corporations, voluntarily undertake initiatives to manage relations with their stakeholders in a responsible manner.

There is a growing recognition in Poland that businesses must be responsible, like any other party, and play an active role in society. Poles notice the positive effects of market economy in the economic sphere, but perceptions of the social and ethical aspects are more negative.
According to a 2007 UNDP report on CSR in Poland, the number of regularly produced, structured CSR reports is low and independent assurance has not been adopted by these reporting companies.

At the end of 2009, the Warsaw Stock Exchange (WSE) launched the RESPECT Index, which includes the most ethical companies. This project is part of a survey, “social responsibility of business”, among the biggest companies quoted on the WSE.

Political Violence

Poland is a politically stable country. There have been no confirmed incidents of politically motivated violence toward foreign investment projects in recent years. Poland has neither belligerent neighbors nor insurgent groups. The Overseas Private Investment Corporation (OPIC) provides political risk insurance for Poland but is not frequently used as competitive private sector financing and insurance is readily available.


Poland has laws, regulations and penalties aimed at combating corruption. Nevertheless, corruption is widely recognized as a continuing problem and a restraint on economic growth and development. In 2009, Transparency International ranked Poland 49th among 180 countries (with 1st place being least corrupt and 180th most corrupt). In 2008, Poland was ranked 58th among 180 countries. The rise in Poland’s score, one of the largest in the 2009 survey, may have been influenced by an increased number of investigation cases undertaken by the Central Anticorruption Office (CBA) and a planned country-wide anticorruption strategy (the so-called anticorruption shield).

The CBA was established by the Polish parliament in 2006. It answers directly to the office of the Prime Minister and is the primary law enforcement agency responsible for investigating public corruption. It coordinates anticorruption activities with other public institutions, such as the police and the internal security services (particularly the Polish Internal Security Agency (ABW)). The Justice Ministry and the police are responsible for enforcing Poland’s anti-corruption criminal laws. The Finance Ministry administers tax collection and is responsible for denying the tax deductibility of bribes. Some businessmen report that corruption – especially in the area of public procurement – markedly declined following the implementation of the CBA.

Reports of alleged corruption most frequently appear in connection with government contracting and the issuance of a regulation or permit that benefits a particular company. Allegations of corruption by customs and border guard officials, tax authorities, and local government officials are common, although decreasing. If such corruption is proven, it is usually punished. Businesses report that Polish officials have asked for political campaign contributions in return for favorable treatment. Overall, U.S. firms have found that maintaining policies of full compliance with the U.S. Foreign Corrupt Practices Act is effective in building a reputation for good corporate governance and that doing so is not an impediment to profitable operations in Poland.

One of the chief tools in preventing corruption is a transparent system of government procurement by open tender at all levels of government. A 1997 law restricts economic activity for those holding public positions. This law prevents a public official from engaging in business activities where he or she would have a conflict of interest while he or she is an official and for one year thereafter. The law applies to parliamentarians, government officials, and local officials. On July 1, 2003, new penal code regulations combating corruption came into force. These amendments include: no punishment for those from whom bribes are extracted when they inform police about this fact, a broader definition of a public official, and seizure of assets if an accused person does not prove they derive from a legal source.

Bribery and abuse of public office are crimes under the Polish Criminal Code. Penalties include imprisonment from six months to 12 years, and forfeiture of items derived from an offense.

Poland ratified the OECD Convention on Combating Bribery in 2000. Implementing legislation, effective February 3, 2001, classifies the payment of a bribe to a foreign official as a criminal offense, the same as if it were a bribe to a Polish official.

Post is unaware of any case in which a foreign investor or major government official has been found guilty of corruption, although a number of investigations which commenced in recent years are ongoing.

Several NGOs, including a Polish chapter of Transparency International as well as several business groups, including the American Chamber of Commerce have launched campaigns to increase public awareness. http://www.transparency.org

Bilateral Investment Agreements

As of the end of 2008, Poland had ratified 60 bilateral investment agreements: Albania (1993); Argentina (1992); Australia (1992); Austria (1989); Azerbaijan (1999); Bangladesh (1999); Belgium and Luxembourg (1991); Belarus (1993); Bulgaria (1995); Canada (1990); Chile (2000); China (1989); Croatia (1995); Cyprus (1993); the Czech Republic (1994); Denmark (1990); Egypt (1998); Estonia (1993); Finland (1998); France (1990); Germany (1990); Greece (1995); Hungary (1995); India (1997); Indonesia (1993); Iran (2001; although they support international sanctions regimes); Israel (1992); Italy (1993); Jordan; Kazakhstan (1995); Kuwait (1993); Latvia (1993); Lithuania (1993); Macedonia (1997); Malaysia (1994); Moldova (1995); Mongolia (1996); Morocco (1995); the Netherlands (1994); Norway (1990); Portugal (1993); Romania (1995); Serbia and Montenegro (1997); Singapore (1993); Slovenia (2000); Slovakia (1996); South Korea (1990); Spain (1993); Sweden (1990); Switzerland (1990); Thailand (1993); Tunisia (1993); Turkey (1994); Ukraine (1993); United Arab Emirates (1994); the United Kingdom (1988); the United States (1994); Uruguay (1994); Uzbekistan (1995); Vietnam (1994).

The United States and Poland signed a Treaty Concerning Business and Economic Relations in 1990; it entered into force in 1994 for an initial period of ten years. The Treaty grants U.S. investors domestic privileges and provides for international arbitration in the case of investment disputes. In 1974, the United States and Poland signed a double taxation treaty. Prior to accession to the EU Poland reviewed its agreements with third countries for their compatibility with EU law. In June 2004, Poland completed the necessary amendments to bring the bilateral U.S. - Poland economic treaty into compliance with EU regulations. Ratification of the amended bilateral treaty on business and economic relations took place in October 2004. The U.S. - Poland “Totalization Agreement” signed on April 2, 2008, became effective in April 2009. The Agreement stops dual taxation, opens the door for payments to suspended beneficiaries (i.e., Polish widows) and allows transfer of benefit eligibility.

OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) provides political risk insurance for U.S. companies investing in Poland against political violence, expropriation, and inconvertibility of local currency. OPIC offers medium- and long-term financing in Poland through its direct loan and guarantee programs. Direct loans are reserved for U.S. businesses or cooperatives. Loan guarantees are issued to U.S. lending institutions.

The World Bank's Multilateral Investment Guarantee Agency also provides investment insurance similar to OPIC's for investments in Poland.

Poland maintains full convertibility of the zloty, apart from a few restrictions on short-term capital movements. Foreign currency is freely available from the banking system. At the height of the global financial crisis, short-term foreign currency lending, particularly interbank-lending, slowed following tightening by parent institutions (Poland’s banking sector is dominated by subsidiaries of large European banks). However, the government and Central Bank took some measures (similar to other major economy responses) to provide short-term liquidity and the problem has since eased. Since March 2000, Poland has maintained a freely floating exchange rate regime. As a requirement of EU membership, Poland must enter the European Exchange Rate Mechanism (ERM2). In 2008 the Polish government set an aggressive timetable for Euro convergence, but the recent global financial crisis and political hurdles pushed that target back somewhat. Most observers believe Poland will eventually meet the Maastricht requirements and overcome domestic political hurdles to Euro-adoption, although most expect this will not happen before 2015.


Poland has a well-educated, skilled labor force. Productivity remains below western standards but is rising rapidly, and unit costs are competitive. At the end of November 2009, the average gross wage in Poland was around $1200 per month. In the first nine months of 2009 wages measured in zlotys increased by 4.4% compared with the corresponding period of 2007 (vs. over 10% a year earlier).

Poland's economy employed around 16 million people at the end of 2009, with unemployment of 8.8% in November 2009 (as measured according to standard EU and International Labor Organization (ILO) methodology.) Unemployment varied substantially from one region to another. At the end of 2009, the lowest levels of unemployment were in major urban areas.

Polish workers are usually eager to work for foreign companies and have taken advantage of opportunities for employment in Great Britain, Belgium and Holland. Since Poland joined the EU, over one million Poles have sought work in Western Europe and an estimated 2.2 million live abroad. This trend slowed or stopped in late 2008 as employment opportunities in Western Europe worsened. Overall, employment in the public sector continues to shrink as the private sector grows. Employment has expanded in service industries such as information technology, hotels and restaurants, and the retail trade. The state-owned sector still employs about a quarter of the work force, although employment in fields such as coal mining, steel, and energy is declining.

Most aspects of employee-employer relations are governed by the 1996 Labor Code. This outlines employee and employer rights in all sectors, both public and private, and has been gradually revised in order to adapt to EU standards. The Polish government also adheres to the ILO Convention protecting worker rights.

Foreign Trade Zones/ Free Trade Zones

Foreign-owned firms have the same investment opportunities as do Polish firms to benefit from foreign trade zones (FTZs), free ports, and special economic zones. The operation of FTZs in Poland is regulated by the 2004 Customs Law. Duty free zones can be established by the Minister of Finance, in cooperation with the Minister of Economy. They are managed by authorities designated by the Ministers - typically provincial governors who issue the operating permit for a given zone.

Most activity in FTZs involves storage, packaging and repackaging. In 2009, there were seven FTZs: Gliwice, near Poland’s southern border; Terespol, near Poland’s eastern border; Mszczonow, near Warsaw; Warsaw’s Okecie International Airport (duty-free retail trade within the airport); Szczecin; Swinoujscie; and Gdansk. Duty-free shops are available only for travelers departing to non-EU countries.

There are also eight bonded warehouses: Gdynia (sea port); Krakow-Balice (airport); Wroclaw-Strachowice (airport); Katowice-Pyrzowice (airport); Gdansk-Trojmiasto(airport); Lodz(airport); Braniewo (near Olsztyn); and Poznan (airport).

Bonded warehouses and customs and storage facilities are operated pursuant to permission issued by the customs authorities, and can be operated by commercial companies. Bonded warehouses can be open to the general public, while a private warehouse is reserved for warehousing of goods by the warehouse keeper. The authorization to operate such a customs warehouse can be issued only to persons established in the EU.

When products are re-exported, customs duties are either partially or fully reimbursed to the importer (depending on how long the goods were in Poland). Reimbursement is made within 12 months of the date of customs clearance.

Foreign Direct Investment Statistics

In recent years, Polish foreign assets and liabilities grew systematically as Poland's financial market continues to integrate into international markets. Factors driving foreign direct investment included EU accession, Poland's continuing export success, low corporate tax rates, increasingly effective promotion of investment opportunities and benefits, and economic stability.

Foreign companies also choose to invest in Poland because of a large and growing domestic market, availability of skilled workers, competitive labor costs, and proximity of major markets (especially the EU and Russia). In 2008, FDI inflows to Poland declined versus 2007 as a consequence of the economic crisis; however, Poland still remains one of the top business locations in the world. According to an UNCTAD annual “World Investment Prospects Survey 2009-2011” Poland remains an attractive FDI destination and is among the top 15 friendliest countries in the world.

Since 2004, reinvested profits are the main component of direct foreign investments in Poland. Privatization of large companies plays a marginal role in total FDI. In 2005, the phenomenon of "capital in transition" appeared in Poland; in a reporting year, inflow of foreign funds that increase the equity of foreign direct investment companies is reported, and then these funds are invested in branches or companies being established outside Poland.

Poland is a net capital importer. Compared to the quantity of foreign capital invested in Poland, Poland’s foreign investments are small. According to preliminary data from the National Bank of Poland, in 2008 Polish firms invested over $3.0 billion abroad versus $4.7 billion in 2007. Cumulative Polish FDI through 2008 amounted to $23.5 billion or 4.5% of GDP. In December 2006, PKN Orlen acquired the Mazeikiu refinery in Lithuania for $2 billion, Poland's largest foreign investment to date. Most significant in 2008 were oil and gas exploration investments by Poland’s Petrolinvest in Kazahkstan. Other leading destinations for Polish investment are Luxembourg, the Netherlands, Great Britain, Switzerland, and Germany. The majority of Poland’s foreign investments are connected with the services sector, while other areas of investments are in manufacturing, and financial services.

According to the National Bank of Poland’s (NBP) preliminary data, FDI in 2008 amounted to $14.6 billion (2.8% of GDP) compared to the record $23.7 billion in 2007 (5,6% of GDP). FDI in 2009 is projected to exceed $10 billion. At the end of 2008, according to the UNCTAD’s World Investment Report 2008, Poland's cumulative FDI totaled $161 billion, equivalent to around 30% of GDP. Since 1998, FDI has been most stable in such sectors as manufacturing and trade. In 2008, FDI in financial intermediation was one of the major items, accounting for 30% of total FDI. According to NBP data, U.S. firms accounted for over $10 billion of the total $161 billion FDI at the end of 2008. Some investments by U.S. firms are undercounted in reporting because they are attributed to other countries if they are made through subsidiaries in third countries such as Belgium or Germany. After adjusting for this, Post believes a more accurate figure would be around $15 billion. Poland's accession to the EU in 2004 had a positive effect on FDI in Poland.

Poland remains an attractive destination for American investors and according to Polish official statistics; the U.S. is one of the top ten largest investors in Poland in terms of the volume of capital invested. Investors from OECD countries accounted for over 80% of the cumulative value of investment from 1993 to 2008, while EU-25 states alone accounted for over 75%. In 2008 the largest foreign investors were companies from Germany ($2.4 billion), followed by Netherlands ($2.3 billion), Luxemburg ($1.96 billion), Sweden ($1.62 billion), France ($0.82 billion), Cyprus (0.68 billion), Austria ($0.66 billion), Iceland ($0.64 billion), and the U.S. ($0.54 billion).

In recent years, the manufacturing sector began to give way to services as the most popular sector for foreign investors in Poland. To this end, foreign firms have created a considerable number of service centers in Poland, including back office operations. In 2008, according to PAIiIZ, the Polish Investment Agency, there were over 300 such centers employing 45,000 people. It is projected that around 70,000 people will be employed in the service center sector by 2012.

PAIiIZ expects 2009 to be worse than 2008 for FDI due to the economic slowdown. The main investors in 2008 and 2009 were companies from Europe and the United States. The main sectors of interest were financial services, business process off shoring (BPO) and the manufacturing sector. In the coming years, BPO services, the aviation industry, the auto and chemical sectors are expected to attract most FDI.

Fifty six Research and Development centers have been established in recent years by foreign investors. These centers have created thousands of jobs and details can be seen in the first table below.

Note: PAIiIZ stopped publishing FDI data in 2006. The government of Poland now uses the National Bank of Poland statistics which do not directly correspond to PAIiIZ data. Data in this report is no longer directly comparable to previous editions of the Investment Climate Statement for Poland.
R&D Centers of Foreign Companies:

Number of R&D companies
R&D center of foreign companies
ABB, Fujitsu, CAP Gemini, Google, Software Opera, Ontrack, Microsoft, Apriso, Intel, TP SA, Compuware, Sabre, Tietoenator, IBM, Motorola, Lucent, Atlas
TRW Automotive, Tenneco, Fiat, Bombardier, Delphi, Avio, Valeo, Pratt & Whitney, Remy Automotive, General Electric, Goodrich, EADS
Electronic and Household Appliances
Bosh, Siemens, LG Electronics, Flextronics, Humax, ADB, Samsung, Philips, Diehl Control, Mentor Graphics
Energy and Engineering
Alstom, Lurgi, CH2M Hill, Topgan, Elettric 80, ABB, EC Wybrzeze
Pharmaceuticals and Cosmetics
GSK, Pliva, Avon, Cederroth, Unilever
PCC Rokita, Grace Chemicals

FDI by Country of Origin

USD millions
PLN millions
USD millions
PLN millions
Great Britain
Total FDI
(not cumulative)
Source: National Bank of Poland (report from October 2009)
*Excluding investments attributed to third country subsidiaries
Top U.S. Investors in Poland (2009) *
General Electric Corporation (GE)
Financial intermediation
Distribution Facilities
FX Energy
Oil and Gas Exploration/Production
General Motors Corporation
Motor car industry
Delphi Automotive Systems
Motor car industry
Hilton Hotels
TJX Companies
Wholesale and retail trade
*Data according to FDI intelligence (Financial Times)
Source: Polish Information and Investment Agency (PAIiIZ)

Top Foreign Investment Projects in 2008 with PAIiIZ assistance
Investment Value (in USD million)
Number of Jobs
Zensar Technologies
United Kingdom
United Kingdom
Source: Polish Information and Investment Agency (PAIiIZ)

In 2008 PAIiIZ concluded 56 projects worth USD 2.19 billion.creating over 15 000 jobs.

Number of projects
Value (USD million)
Shared Services Centers
Source: Polish Information and Investment Agency (PAIiIZ)

The greatest amount of money was invested by British companies (USD 785 million), followed by investors from Germany (USD 312 million) and Japan. The biggest number of jobs to be created was declared by American (3481 jobs), German (1524 jobs) and Japanese (1292 jobs) investors.
Among the most active investors were companies from the USA (8 projects), Germany and Japan (7 projects each).