The first SEZ in Poland was established in Mielec in 1995 under the Regulation of the Council of Ministers. In total, fourteen special economic zones were launched in Poland by the late 1990s and they still operate today: Kamienna Góra SEZ for Medium Business, Katowice SEZ, Kostrzyn-Slubice SEZ, Kraków Technology Park, Legnica SEZ, Lodz SEZ, SEZ EURO-PARK MIELEC, Pomeranian SEZ, Słupsk SEZ, „Starachowice” SEZ, Suwałki SEZ, SEZ EURO-PARK, WISŁOSAN, Wałbrzych SEZ „INVEST-PARK”, Warmia-Mazury SEZ.
A SEZ does not constitute a homogenous area and may include subzones established across the country. When adding subzones to a SEZ the Council of Ministers considers territorial proximity with many exceptions permitted. This is best illustrated by the Mielec SEZ, which comprises largely development sites in south-eastern Poland but also includes lands hundred kilometres away: in the northern city of Szczecin.
Following the steady growth of SEZs, the Polish Council of Ministers decided to increase the size of all zones up to 25,000 ha in 2015. On 23 July 2013 the Council of Ministers extended the term of SEZ operation until 31 December 2026. By country of origin, the Polish capital is the dominant player. The West accounts for the largest share, but the East continues to increase its share. The leading investors within special economic zones by investment expenditure include: General Motors Manufacturing Poland (USA), Volkswagen Poznań (Germany), Toyota Motor Manufacturing Poland (Japan), Volkswagen Motor Polska (Netherlands), Michelin Polska (Switzerland), Electrolux Poland (Sweden), Gillette Poland International (Luxembourg), LG Display Poland (South Korea).
„Special Economic Zones are the drive for each region in which they are created hence the continued interest in them is not surprising. Most of new investors looking to set up a business in Poland first check the possibility to invest in the SEZ. The prospect of tax exemptions is not the only benefit though. The possibility to purchase the investment land with proper infrastructure in place is also tempting and translates into faster investment process”, said Łukasz Pańczyk, Associate, Industrial and Logistics Agency, Colliers International.
A permit to operate in a special economic zone may be available to not only to manufacturing or logistics companies, but to other businesses too. Operating within an SEZ may be also profitable to companies providing business services such as outsourcing whose objective is to generate profit, i.e. BPO/SSC, IT R&D/ Software development companies and call centres. SEZs are not necessarily beneficial to captive centres/SSCs as they generally function as cost centres operating on small margins and generating little profit.
The main benefit of investing in a special economic zone is the entitlement to a corporate or personal income tax exemption provided as part of regional state aid. An entrepreneur starting business activity within a special economic zone is eligible under a zone permit for regional aid in the form of a tax exemption for capital expenditure or creation of new jobs. Aid may be granted for a new investment project provided that the investor’s own funds account for at least 25% of the project’s total costs. The costs of the new investment project may not be lower than EUR 100,000. As regards state aid for new job creation, the maximum aid limit is calculated on the basis of gross two-year labour costs of newly-hired employees plus obligatory employment-related liabilities.
Other equally important incentives for investors entering an SEZ include the following: fully prepared development sites offered at competitive prices, the possibility of purchase or lease of properties located within an SEZ without any need to construct new properties, access to government investment grants, subsidies of local (poviat) employment offices or UE funds. Companies located in SEZ can also count on partial or full real estate tax exemptions offered in some gminas, know-how and gratuitous assistance with formalities provided by the SSE managing authority, post-investment assistance comprising also solicitation of skilled employees and proximity of other companies to establish business contacts with.
„Special Economic Zones are one of the most important public instruments for supporting new investments in Poland, even though the amount of public aid decreases every seven years in line with every programming period of the EU. Only 60% of the total SEZ area is occupied by investors which shows that there is still a large choice of space for other companies. And the possibility to recover 35% or even 50% of invested capital in the form of tax exemption is tempting”, said Marcin Włodarczyk, Regional Director | Łódź, Colliers International.