Investments

Foreign investments

The foreign capital coming into the Polish economy has fulfilled a very important role in the process of privatization and restructuring. The majority of foreign investment to Poland has taken the most desirable form – direct investment (FDI). Such investments have meant new companies starting from scratch or enterprises already existing on the Polish market being taken over. 

Before 1989, foreign companies did not operate in Poland (except for so-called ‘Polonia’ firms). Today, 91% of capital coming into the country comes from OECD countries (more than $41 billion). According to PAIIZ, about $6 billion of FDI came into Poland in 2002. The total value of FDI coming into Poland in the period 1990-2002 is $66 billion.

The majority of funds coming into the country are invested in the manufacturing sector (42%). This is followed by financial services (22.7%) and transport, logistics and data transfers (12.1%). Since the start of the 1990s, companies from the EU have become ever more interested in investing in Poland. In 1993, the value of investments from EU countries was about 47% of the total invested by foreign companies, while in 2000 it was 67%. This growth is the best evidence of the development of the Polish economy and perfectly illustrates the extent to which investors have faith in the economy.

The list of the biggest investments to Poland shows the scale of foreign capital involvement in the Polish economy. New investments are also planned for upcoming years: Flextronics (USA), Guardian (USA), Nastech(Japan) and Tokyo Seal Industries (Japan). This is all the more interesting given the recent cooling of the global economy. In 2001, the number of investments in European states grew 0.5% from 2000, while Poland noted growth in this period of 25% (according to Ernst&Young data). Poland is an attractive place for foreign investors due to its competitive labour costs, the size of the market, industrial diversity and possibilities for the development of new economic entities. 

In the ‘The Programme of Promoting the Polish Economy to 2005.’ it is worth mentioning the following strategic aims in the area of FDI into Poland:

• Achieving the position of regional leader in terms of FDI inflows,
• Reinforcing a positive vision of Poland and its economy in the world,
• Increasing FDI to $8 billion a year in 2005and to about $10 billion a year from 2006 including greenfield ventures and so-called "pro-export investments,"
• Increasing the share of FDI in the sectors of advanced technology and so-called emerging sectors to a level of 20%,
• Equalising the regional differences in economic development.

From the foreign investors’ point of view, a key question in starting activity is the legal rules governing the purchase of land and property. The Ministry of Internal Affairs and Administration decides on permission for foreigners’ to buy land. The procedure for assessing each case takes several months, but foreign investors searching usually get positive decisions when seeking to buy land. The size of the investing enterprise does not play an important role. The procedure is somewhat longer if the applicant wants property for purposes not related to economic activity or farming. These difficulties will disappear when Poland joins the EU.

In 1999, foreign companies bought almost 1,500 plots of land, with a combined total land area of 4,700 hectares. Private individuals bought 700 houses and plots of land of 350 hectares. Foreigners also bought in 1999 246 hectares of farmland. The cost of one hectare of average quality farmland in Poland is about 1,000 euros. In Germany, by comparison, similar quality land costs about 10 times more. This differential means that the first farmers from the EU are choosing to farm here.

The low cost of land and its easy access provide great possibilities for foreigners. Poland does not have the same problems as in many EU countries where the size and quality of land on which agricultural can take place are being reduced. In contrast, some farmland in Poland is not governed by any prohibitions, given the lack of funds for cultivation or recultivation.

In 2001 1,414 land purchase permits were granted to foreigners to buy land with a total combined land area of 2,439 hectares, and 40 permits to buy property. Most permits were granted to Germans (250), Austrians (32) and Swedes (28).

Government institutions and agencies 

source: www.poland.gov.pl