Agenda

I. Poland - The Place To Be

II. Foreign Direct Investment

III. Business Environment: Labor, Infrastructure

V. Sectors of Opportunities

VI. Public Aid

IV. Global Acknowledgement

Poland - Key Facts

Area: 312 700 sq km – 6th in European Union

Population: 38,12 million – 6th in European Union

Currency: Polish Zloty (EUR 1 ~ 4.4 PLN)

GDP total: USD 422 billion (2007)

GDP growth: 6.7% (2007), ca 5% (2008)

Membership: EU, NATO, OECD, WTO, Schengen Zone

Competitive Advantages

Location & economic fundamentals

strategic location in continental Europe part of trans-european transportation corridor GDP growth twice the EU average 38 million of consumers 10% growth of retail market

Investment incentives14 Special Economic Zones over 90 bn EUR from EU

Labor force young, well-educated work force ca 2 million of university students 455 universities & high education schools increasing labour productivity

1000 km radius

250 mn people

2000 km radius

550 mn people

GDP growth• 6.7% in 2007 vs 2.9% in EU• 4.8% in 3H 2008, 5%F vs 1% in EU• 2% forecasted in Poland vs -1,8%

in EU for 2009• domestic demand - the main factor

behind the growth

Inflation (CPI) and interest rates

Source: Ministry of Finance, NBP, Eurostat 2008

Poland: Encouraging Macro-economic Picture

0

1

2

3

4

5

6

7

8

9

10

%

CPI NBP reference rate

0

2

4

6

2002

2003

2004

2005

2006

2007

%

EU27 Euro Zone Poland

GDP growth rate

Inflation • 2.6% in 2007 vs 2.4% in EU• 4.2% forecasted in 2008 vs 3,7% in EU• direct inflation targeting since 1999 - target of 2.5% +/-1%

0

10

20

2002 2003 2004 2005 2006 2007 2008

Poland: Falling Unemployment

Source: Central Statistical Office 2008

over 20%

11/20089.1%

Employment rate grew since 2004

by over 5% up to 56.4%

Labor Cost in Poland and OECD Countries(PPP adjusted, in thousands USD)

Czech Republic

Germany

Hungary

Mexico

Poland Slovak Republic

United Kingdom

United States

Euro area

0

10

20

30

40

50

60

70

2000 2001 2002 2003 2004 2005 2006

Source: OECD, 2006

Labour costs in CEE Region in 2006-2008

Source: EUROSTAT

Monthly labour cost per employee in EUR

0

200

400

600

800

1000

1200

1400

1600

1800

2000 2006

2007

2008QII

Agenda

I. Poland - The Place To Be

II. Foreign Direct Investment

III. Business Environment: Labor, Infrastructure

V. Sectors of Opportunities

VI. Public Aid

IV. Global Acknowledgement

FDI inflow (mln EUR) and sources

Source: NBP 2008EU

85,30%

Other 14,70%

Geographical sources of FDI inflow

10,3

6,4

4,4 4,1

10,2

8,3

15,716,6

11,2

0

2

4

6

8

10

12

14

16

18

2000 2001 2002 2003 2004 2005 2006 2007 I-XI 2008*

* Estimated

Source: World Investment Report, UNCTAD 2008

Poland as a major FDI recipient in the region:

Poland attracted ca. EUR 16 billion in 2007, the highest amount among 12 new EU states.

Poland in World Investment Report 2008

According to UNCTAD the key factors attracting FDI to Poland are:

• rapidly expanding domestic market

• flexible & skilled labour force

• solid banking system

Agenda

I. Poland - The Place To Be

II. Foreign Direct Investment

III. Business Environment: Labour, Infrastructure

V. Sectors of Opportunities

VI. Public Aid

IV. Global Acknowledgement

There are ca 1,9 mn university students in Poland

734

180

88

20

101

17

307

50

497

114

0

100

200

300

400

500

600

700

800

Humanitiesand social

Sciences ICT Engineering B&A and Law

Students

Graduates

POZNAN

WROCLAW

WARSAW

KRAKOW

LODŹ

SZCZECIN

TRICITY

KATOWICE

BYDGOSZCZ-TORUN BIALYSTOK

LUBLIN

RZESZOW

Main academic centers

Source: Polish Statistical Office 2008

Knowledge of Foreign Languages

57% Poles is able to speak at least one foreign language,

• 32% of Poles speak two, • 4% - three languages.

Similar situation in EU:

• 56% of EU citizens speak one foreign language,

• 28% - two languages.

Percentage of young Poles speaking foreign languages

Learning of foreign languages is obligatory in the Polish education system

Source: Eurostat 2006, TNS Opinion & Social (UK) December 2006, Ranstadt 2008

97%

59%

37%

22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

English German Russian French

7,07 7,55

11,5

22,320,319,1

15,4

0

5

10

15

20

25

2003 2004 2005 2006 2007 2008F 2009F

Passengers served by Polish airports (in millions)

Source: Civil Aviation Office

Air Transport

• Regional airports on constant rise

• Three new international airports may be created within a short proximity to the capital city of Warsaw

Agenda

I. Poland - The Place To Be

II. Foreign Direct Investment

III. Business Environment: Labour, Infrastructure

V. Sectors of Opportunities

VI. Public Aid

IV. Global Acknowledgement

Investment attractiveness of cities and regions

Best cities in terms of value for money

  2007 2006

Warszawa 1 1

Prague 8 4

Paris 16 17

Madrid 10 12

London 18 28

Lisbon 3 2

Budapest 5 6

Bucarest 2 2

Berlin 4 8

Amsterdam 12 19

Source: Cushman & Wakefield, European Cities Monitor 2007

1 Warszawa

2 Kraków

3 Wrocław

4 South of Poland

5 Prague

6 Budapest

7 Sofia

8 Bratyslava

9 Tallin

10 Bucarest

Top 10 Most Cost Effective

1 Luxemburg

2 Tallin

3 Paris

4 London

5 Region Pardubice

6 Kraków

7 South of Poland

8 Villnius

9 Riga

10 Gorna Oryahovitsa

Top 10 Best Economic Potential

Source: Financial Times,European Cities & Regions of the Future 2008/09

Poland vs economies in transition from efficiency driven to innovation driven

Source: The Global Competitiveness Report 2008-2009 , World Economic Forum 2008

Reference GroupBahrainBarbadosChileCroatiaEstoniaHungaryLatviaLithuaniaPolandQatarRussian FederationSlovak RepublicTaiwan, ChinaTrinidad and TobagoTurkey

0

1

2

3

4

5

6

7

8Institutions

Infrastructure

Macroeconomic stability

Health and primary education

Higher education and training

Goods market eff iciency

Labor market eff iciency

Financial market sophistication

Technological readiness

Market size

Business sophistication

Innovation

Poland

Reference Group

Hungary

Sounth Africa

Turkey

Malaysia

USA

Poland

Czech Republic

Mexico

India

Thailand

Poland value for money

According to the 2008 edition of the Country Broad Index (CBI) Poland is on a high 5th ranking in group of countries value for money.

Source: Country Broad Index 2008

Poland - No.1 Location for FDI in Europe

Source: Ernst & Young, 2008;

7%

7%

8%

8%

9%

9%

10%

11%

12%

16%

18%

Czech Republic

Poland

7%

7%

8%

8%

9%

9%

10%

11%

12%

16%

18%

Italy

Bulgaria

Spain

UK

Hungary

Romania

France

Russia

Germany

Agenda

I. Poland - The Place To Be

II. Foreign Direct Investment

III. Business Environment: Labour, Infrastructure

V. Sectors of Opportunities

VI. Public Aid

IV. Global Acknowledgement

Services and Manufacturing Hub

Automotive

Metal

Machinery

Electronics

Services and Manufacturing Hub

Aviation

BPO

R&D

Agenda

I. Poland - The Place To Be

II. Foreign Direct Investment

III. Business Environment: Labour, Infrastructure

V. Sectors of Opportunities

VI. Public Aid

IV. Global Acknowledgement

Regional Aid Map in Poland 2007 -2013

50%

50%

50%50%

50%

50%

50%

50%

50%

50%

40%

40%

40%

40%

40%

40% till 201030% as of 2011

Warszawa City30 %

Due to relatively lower GDP level in Poland the levels of admissible state aid are higher than in most other EU countries

CIT exemption in Special Economic Zone

Real estate tax exemption

Government grants through individual negotiations

Grants available through EU Funds

All above presented instruments can be combined together however the total amount of public aid cannot exceed the maximum aid ceiling

Forms of regional aid

Special Economic Zones

• SEZ is a designated area in which manufacturing or distribution activities can be conducted on preferential terms to support regional development

• there are 14 SEZs in Poland, each consisting of several subzones

• Total area of all SEZ – 20 000 hectares • Permits to conduct activities in SEZ are

issued by the authorities of each SEZ• Possibility of including the land selected

by an investor into SEZ

Benefits from obtaining a permit to conduct activities in SEZ :• eligibility for income tax exemption – a form of regional aid• plot of land prepared for an investment project at a competitive price• free assistance in dealing with formalities relating to the investment

Governmental support system

SUPPORT FOR CO-FINANCING OF INVESTMENT COSTS

Eligible criteria: investment value of at least 160 mn PLN and at least 50 new jobs

SUPPORT FOR THE CREATION OF NEW JOBS

Eligible criteria: creation of at least 250 jobs (35 jobs in case of R&D sector and investment of at least 3 mn PLN)

Supported sectors:AutomotiveAviationBiotechnology BPOR&DIT & electronics

EU funds in Poland: 2007-2015

EU support

Structural instruments

(EUR 67,3 bln)

Rural Development Programme

(EUR 13,2 bln)

European Fisheries Fund(EUR 0,6 bln)

Investment in food processing, wholesale,

training for farmers and foresters

Investment in fish processing and marketing

6 national operational programmes

and 16 regional – ESF, ERDF, CF

Why Poland? Summary

Great number of high potential human resources

Cost effectiveness

EU-Funds (110 bn USD for the period of 2007 -2013)

Strategic location

Short list Short list of countries, choice of

locations, detailed legal and financial analysis, investment incentives system’s analysis,

negotiations with central and local authorities, finding the potential

partners

Investment decision

Long list of countriesAnalysis of macroeconomic, social and

political conditions of the countries, general legal and financial analysis

including investment incentives system, fact finding missions

Considering of investmentStrategic corporate decision regarding new

investment, destination of investment

• Project Managers assistance• Site visits offered to investors • Providing macroeconomic and sectoral data,

information on financial incentives offered by central and local governments, Special Economic Zones and EU funds

• Assistance in obtaining financial support from the state government

• Co-operation with Special Economic Zones• Date base of suppliers and business partners• Network of Regional Investor Assistance

Centers• Real estate data base

• After-care services• Ombudsman for foreign investors

• Promotion of Poland through marketing campaigns, investment seminars, work-shops, study tours

• Investment marketing, company visits• Co-operation with Polish Embassies abroad

Agency’s offer

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