Tuesday, April 04, 2006
WHY DOES IT PAY TO INVEST IN POLAND ?
WHY DOES IT PAY TO INVEST IN POLAND ?
WHY POLAND ?
Poland's entry into the European Union on 1 May 2004 was the culmination of wide-ranging political and economic transformation initiated in 1989. As a part of the Single European Market, Poland is still undergoing economic and social changes. With economic growth at 5.7% (2004 est.), a young, well-educated and ambitious labour force, location at the very heart of the continent and low corporate income tax (19%), Poland has become an exciting place for investors from around the world.
Because of its 38,6 million market and cheap and skilled labour force Poland is a very attractive place to invest in but not only for that reasons. Poland has prepared a number of economical incentives for foreign business to make it one of the most interesting and beneficial places in Europe to invest in.
Investors who benefit from the investment grants are eligible also for other forms of support, such as: tax relieves in Special Economic Zones, local tax relieves etc., however the total value of grants and other kind of public aid offered to the investor cannot exceed 50% of the investment outlays.
Poland is also one of the youngest countries on the continent - 35% of Poles are under 25 years of age.
The average price of 1 m2 of a new apartment on a real estate market in 2002 was 391,5 USD. The highest prices (691 USD) you can find in the central Poland with Warsaw as a capital where prices average between 750USD and 1250USD/m2. The cheapest apartment can be found in the south (with a strong mining industry and Katowice as a capital) priced at 256USD/m2.
Polish labour force is still very cheap. It costs just $3.0 an hour (including social security contributions) to employ a skilled manufacturing worker in Poland.
In 2002 the average gross salary in Poland was estimated at 633 USD per month. The lowest guaranteed salary in Poland (from 01.01.2003) is 280 USD.
PURCHASE OF REAL ESTATE BY FOREIGNERS
Purchasing property by foreigners is governed by the provisions of the Act of 24 March 1920 on Purchase of Real Estate by Foreigners with further amendments. The general rule is that foreigners require a permit from the Minister of Internal Affairs and Administration to buy real estate.
The following real estates you may buy without the obligation to obtain a permit
* Purchase of independent residential premises
* Purchase by a controlled corporate entity, for its statutory purposes, of undeveloped real estate in urban areas if their total area in the entire country does not exceed 4,000 m2
* Purchase of real estate by a foreigner who has been residing in Poland for at least five years from the issuance of a permanent residence permit
* Purchase by a foreigner whose spouse is a Polish national and who has resided in Poland for at least two years from the issuance of a permanent residence permit, of real estate that will become the joint property of both spouses
* Purchase of real estate by a foreigner if, on the day of purchase, the foreigner is entitled to statutory succession after the assignor of the real estate, provided that the assignor was its legal owner or perpetual usufructuary for at least five years
* Purchase of real estate by a foreign bank, which is a mortgagee, after an ineffective auction under enforcement proceedings
Cases where a permit is required
A permit is required in each case of real estate purchase, i.e. acquisition of ownership title or perpetual usufruct right to real estate on the basis of a legal transaction.
The following require a permit:
* Purchase of real estate
* Purchase or taking up of shares in a commercial company which has a registered place of business in the Republic of Poland and is the legal owner or perpetual usufructuary of the real estate
European Economic Area (EEA) nationals and entrepreneurs must obtain a permit in the following cases:
* To purchase agricultural and forest land - for 12 years after Poland became a member of the EU (i.e. until 2 May 2016),
* To purchase a second home (i.e. the real estate which is intended to be developed for residential or recreational purposes and which will not be used by a foreigner as the habitual residence) - for five years after Poland became a member of the EU (i.e. until 1 May 2009).
However, EEA foreigners will not be required to obtain a permit during those transitory periods in the following cases:
Ø to purchase agricultural land situated in:
* the eight western and northern provinces – after the end of the seven year period since the execution of a lease contract (date of execution must be certified), if during that period they have pursued farming in person on the land concerned and have legally resided in Poland,
* the eight central ane eastern provinces – after the end of the three year period since the execution of a lease contract (date of execution must be certified), if during that period they have pursued farming in person on the land concerned and have legally resided in Poland
Ø to purchase a second home:
* if the purchaser has legally and continuously resided in Poland for at least four years, or
* for the purpose of pursuing business activities in the form of tourist services