The year of revolution in Polish SEZs

2018 was a challenging year for Special Economic Zones. First of all, the zones underwent a revolution – changes in the law caused that entire Poland was included in the special economic zone. Here is a summary of the most important SEZ events this year.

Last year completely changed the Polish zones. Instead of a large number of subzones where CIT exemptions could be used, or a lengthy procedure enabling the company's areas to be incorporated into SEZs, it has been possible to invest everywhere in Poland since September. According to the Act on supporting new investments, the Polish Investment Zone has been operating since 30 June 2018.

Great change in SEZs

– The most important change is that it is possible to obtain an income tax exemption for investments throughout Poland. The previous, long and sometimes complicated procedure of covering new areas with the SEZ status was a significant barrier for many investors – says Joanna Choromańska, Senior Business Development BTS Manager, JLL.

The expiry date of the zones, scheduled for 2026, has disappeared – entrepreneurs receive decisions on support for 10, 12 or 15 years. What counts more than how many people will be employed by the company is whether they will give employees jobs, additional benefits and enable them to improve their skills.

Satisfied zones

The heads of Special Economic Zones see positive aspects of the new law. – For us, the new law, colloquially speaking, is “salutary”. The least developed regions will have a chance to develop much faster – says Małgorzata Sobieska zu Schwarzenberg, Vice-President of Warmia and Mazury Special Economic Zone.

– The special economic zones have been successfully fulfilling their mission for more than 20 years. They reconstructed industry in regions affected by economic problems, such as high unemployment rates and sometimes even the complete closure of entire industrial sectors. The new model of investment support responds to the needs of sustainable development of the whole Poland as defined in the Strategy for Responsible Development. Thanks to the Polish Investment Zone, entrepreneurs can develop their business on preferential terms and in convenient locations. The first effects are already visible. During the last quarter of 2018, within the framework of the Polish Investment Zone, we issued decisions on support for eleven companies which declared investment outlays of nearly PLN 600 million, which is a really good result, taking into account that the law has been in force since September – says Dariusz Śliwowski, Vice-President of the Industrial Development Agency.

Major investments

As summarised by “Puls Biznesu”, entrepreneurs declared in 2018 almost PLN 14.6 billion of expenditures and the creation of almost 9 thousand jobs. For comparison, in 2017 there were 352 permits, PLN 19.1 billion of investments and 13.2 thousand jobs.

In 2018, in terms of the number of permits and decisions, the Katowice SEZ won. It acquired 51 investments worth over PLN 2.5 billion. Thanks to them, at least 2.1 thousand people will be hired in the region, and these companies will maintain their current employment at the level of over 20 thousand employees.

– In the Katowice SEZ we are not slowing down. After the record-breaking year in the 22-year history of the KSEZ, 2017, in which we acquired 58 projects, in 2018 we almost repeated this result. We have attracted to the region as many as 51 investments of over PLN 2.5 billion, including as many as 11 investment projects of over PLN 930 million based on new regulations within the Polish Investment Zone – says Janusz Michałek, President of the Polish Special Economic Zone. – These projects will allow entrepreneurs to create at least 2152 new jobs in the zone and maintain 20 091 existing jobs – he adds.

In 2018, the KSEZ was attractive primarily for the automotive and metal industries but the investments in the Katowice SEZ will also be carried out by entrepreneurs from the electrical and electronic sectors, as well as construction, wood processing, plastics, food, household appliances, logistics and warehousing.

On the basis of permits and decisions issued in 2018, 75 entrepreneurs will invest over PLN 2 billion in the Special Economic Zone Euro-Park Mielec and the Tarnobrzeg Special Economic Zone Euro-Park Wisłosan, creating 1.8 thousand new jobs and maintaining about 15 thousand existing ones. 64 projects will be implemented on the basis of permits for business activity in the SEZ and 11 on the basis of a decision on support within the Polish Investment Zone.

Effects of changes in the law

The Ministry of Entrepreneurship and Technology assures that the new law will benefit Polish investors, as the required outlays will be adjusted to their capabilities. In addition, they will not have to change the location of their business, as before, because the incentives will be available throughout the country.

The expansion of SEZs to the whole Poland is also expected to attract more foreign investors. The Ministry predicts that over the next 10 years over 200 thousand new jobs will be created.

Joanna Choromańska