Company formation in Poland is getting a very sensitive topic day by day. In this blog , I’m gonna introduce you another topical topic regarding to company formation in Poland – so called Special Economic Zones in Poland. I’ll represent you a certain overview and answer the questions , what are special Economic Zones? What laws regulates SEZ operation in Poland?What are incentives and allowances for SEZ investors, including diversity of tax exemptions in Poland? And finally will present you Special Economic Zones operating in Poland. So stay tuned you’re gonna get some useful tips for your business expectations in Poland. You should have this information before you register your Polish Company.

What are Special Economic Zones in Poland you should consider before business Registration

Let’s start with that The Special Economic Zone is an isolated, with not residents  part of the country where the business activities can be carried out under certain preferential terms in the Law on Special Economic Zones of October 20, 1994. Special economic zones have been created, in order to:

  • To encourage the growth of economic development in the regions
  • To facilitate and organize post-industrial property and infrastructure
  • Create opportunity for formation new jobs in Poland.
  •  To attract foreign investments in Poland.

It is notable that the first SEZ in Poland was established in Mielek in 1995, with the largest growth in the number of SEZs in two years. Poland’s the newest economic zone is Krakow SEZ, which opened in 1998. All existing SEZs in Poland were created in the 90s. Initially, the Council of Ministers created 17 zones, but in practice only 15 have been established, and 14 are still in operation today. Company Registration in Poland has been recently attractive due to these special Zones Exactly.

company formation in Poland

Incentives and allowances for company registered in SEZ Poland

Exemption for the Income Tax in Poland

Let’s discuss the advantages of investing in a special economic zone. One and most suitable is the possibility of obtaining a tax allowance consisting in a corporate income tax exemption. In these days, as may you know from our blog regarding to  taxation system in Poland the corporate income tax rate in Poland is 19%. The maximum income tax exemption, accordingly is linked to the value of state aid available to an individual investor for a particular investment project. And this value is depended on the investment place, the size of the enterprise and the amount of investment expenditure. Company Registration and starting a business in Poland gains popularity due to below important information that every investor should consider before they start business in Poland.

The meaning is as follows:

  1. for the large-sized enterprises – it starts from 30% up to 50% of allowed costs
  2. for middle-sized enterprises 2 – it starts from 40% up  to 60% of allowed costs
  3. for small-sized enterprises 3 – it starts from 50% up to 70% of allowed costs.
Take these notes! 
  • What is small enterprises? – they are those kind of businesses which has less than 50 employees and its annual turnover or total balance annually is less than Euro 10 million.
  • What is middle-sized enterprises? – they are those kind of businesses which has less than 250 employees and an annual turnover less than EURO 50 million or total balance annually less than EURO 43 million.
Moreover, the exemption is available in the following cases:
  1. The investor doesn’t carry over the right of ownership of any assets related with investment expenditure – during five years from the date of their entry into the tangible and intangible assets register in the mean of the income tax provisions or in the case of small and medium-sized
    enterprises, for a period of three years.
  2. The conditions specified in the zone permit are fulfilled, ie the specified amount of investment costs is realized within the specified period, a certain number of new works are created within the specified period, the investment is completed within the specified period.
  3. The investor carries out economic activities related to the investment for at least five years, or in the case of small and medium enterprises, for at least three years.
  4. The investor keeps the newly created jobs for at least five years, or in the case of small and medium enterprises, for three years (where he helps to create jobs.
tax exempts on SEZs in poland

Relevant costs for Registration of a Business in a SEZ

The allowable costs of a new investment are those ones incurred after obtaining the permit regarding to the investment (or two years’ labor costs, where this amount exceeds the investment costs) minus the value added tax and excise tax deductible,of course, intended for:

  • Purchase of land, or the right to permanent usufruct of land
  • Purchase or manufacture of tangible assets
  • Development or modernization of existing assets
  • Purchase of intangible assets for patent acquisition

Operating licenses, or patented know-how licenses, as well as A non-patent know-how aimed at investing. In addition to small and medium-sized enterprises, the material assets acquired by enterprises must be new. Substitute investments are not allowed costs.

Tax exemption for Real Estate

Real estate tax exemptions may be granted to investors who conduct their business in SEZ on the basis of a decision made by the local government. In order to qualify for real estate tax exemption, an investor must meet certain requirements in addition to making investments and creating new jobs, for instance:

  • The intention to send a message to the relevant tax authorities
    Before investing
  • Maintain investment in the region for at least five years (for small and medium-sized businesses).

The amount of assistance depends on the sum of the investment costs, or the labor costs of the two years. Thus, the possibility of obtaining real estate tax exemption and its value must be assessed at random. If there seems to be no exception, then the investor should negotiate with the local government.

tax exemptions in poland

Entering in a SEZ

The prerequisite to obtain exemption for your income tax is a permit to operate in a SEZ. For obtaining last mentioned investor must :

  • Revise the regulations of the Council of Ministers for investors who are granted state aid on the basis of permission to conduct economic activities in special economic zones, to determine whether the planned activities are authorized (unqualified types of activities include the production of explosives). Tobacco products, alcoholic products, gaming centers, repair and maintenance equipment and equipment used to operate in the zone).
  • Select location for an investment among wide range of territories offered by SEZ.
  • Submit a proposal to SEZ in the format specified by SEZ, in which, you state that you intend to carry out the minimum investment costs. 100,000 euros.
  • Participate in a tender announced by SEZ authorities. in case investor wins the tender, he/she will obtain the permit.

For specified cases, for instance, with the innovation of the investment or its size, the investor may request that the SEZ status be granted to the territory specified by him, allowing him to apply for a SEZ permit and use income tax exemptions in this area.

let’s briefly outline the procedure for your simplicity perception :

Choosing Location

Obtaining SEZ’s Permit

Start and Implement Investment

Generate income and Take Advantage with Tax Exemption  

entering company in SEZ in poland

Secial Economic Zones operating in Poland

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