Country report Poland

Economic overview

Since joining the EU, Poland has had the need for the construction and modernization of various infrastructures to reach EU standards: from railway, road, motorway and airport infrastructure, to health, urban, etc. Therefore, as part of the economic and social cohesion policy, with the aim of promoting balanced and sustainable development throughout the Community territory, Poland has received substantial funds from the European Union amounting to 82.5 billion euros for the period 2014-2020, to which were added 32 billion for the CAP. These funds have helped to further accelerate the country’s development, opening up great possibilities for foreign investors. The recipient sectors of these funds were: infrastructure and the environment, innovation, education, the technological and IT sector, eastern Poland, support for the PA and cohesion policy.

In 2016, Premier Morawiecki presented the Economic Development Plan for Poland, with ambitious measures to support the innovation and competitiveness of the Polish economic system in order to transform the current model based on the low cost of the workforce and stimulate growth. The strategy is based on five pillars: reindustrialization with the creation of new industrial sectors; improvement of the reference legislative framework to stimulate investments in research and development and collaboration between universities and the private sector; management of European, public and private investments; export support; implementation of support measures to encourage the development of rural areas. The financing vehicle for the Plan has become the Polish Development Fund which integrates several governmental institutions and which is financed with public and private funds, including the EU Structural Funds.

Main sectors of industry

The agricultural sector is the traditional economic sector of the nation and one of the main producers of the food needs of the European Union. Nonetheless, strong requests for restructuring come from the outside world. In fact, with minor exceptions, it still occurs under the management of small agricultural families, which lack appropriate business characteristics (well over 2 million are small agricultural nuclei in Poland).

In relation to the industrial sector of the Polish economy, traditionally, it focused particularly on heavy industry such as coal, steel and iron, as well as the textile sector. Today, however, it develops around the chemical, electronic and automotive industries (the production of FIAT is important). 

The development of the naval sector is also good.

Poland’s infrastructure sector is the one that needs the most attention today. The road and rail communication sectors are still few and of a low level. There are currently several attempts to restructure the sector, even if it is still highly concentrated in public hands.

The service sector is constantly growing thanks above all to foreign investments. We recall that in this regard, Poland has set up various Special Economic Zones in which the State offers particular fiscal and economic incentives to companies operating there. Nonetheless, there are several complaints perpetuated by investors in Poland about the lack of appropriate infrastructure throughout the country.

Taxation for businesses in Poland

The corporate tax rate in Poland is among the lowest in Europe, with a rate of 19%;

Possibility for SMEs to take advantage of a reduced tax rate of 9%;

Preferential tax regimes for special economic zones: Poland has created some special economic zones where companies can benefit from preferential tax regimes, such as lower tax rates and tax exemptions.

Poland is a particularly interesting jurisdiction, it is located in the center of Europe and is part of the EU. It is one of the countries that is part of the agreements on the automatic exchange of information and it is possible to exploit the so-called Directive “mother/daughter” and “interests and royalties”. For this, in fact, it is an interesting jurisdiction to evaluate for the expansion of your business through the creation of a company.

Corporate income tax rate in Poland

The standard corporate income tax rate is 19%. However, a reduced corporate income tax rate of 9% applies to small taxpayers with annual sales below the PLN equivalent of EUR 2.0 million

Investing in Poland

The Polish government has adopted various expansive measures to support economic growth, attract foreign investment and increase the per capita income of the population.

The 14 Special Economic Zones (ZES), established in 1994, have represented a valid tool for growth by allowing the start of economic activities at advantageous conditions and significant tax relief for new businesses. The primary purpose of the ZES was to accelerate the economic development of the area, by granting public aid to entrepreneurs for starting up businesses in certain sectors, with new technological solutions aimed at greater competitiveness and job creation. The ZES will be active until 2026 but since July 2018 all of Poland has become a single “special area” as the Government has expanded the incentive measures for new investments to the whole territory, with the aim of increasing the international competitiveness of the country and promote the development of depressed areas.