POLSKA AGENCJA INFORMACJII INWESTYCJI ZAGRANICZNYCH

Sławomir MajmanPAIiIZ President

June, 2012

Why Poland blossomed

Poland – key facts

Territory: 312 700 km2 – 6th place in the EU

Population: 38.1 mn. – 6th place in the EU

Currency: Polski Złoty (1 EUR ~ 4.19 PLN)

GDP in 2010: 1 415 bln PLN (ca. 354 bln EUR ~3.99 EUR/PLN)

GDP growth: 1.6% (2009), 3.9% (2010), 4.3% (2011)

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

Territory: 312 700 km2 – 6th place in the EU

Population: 38.1 mn. – 6th place in the EU

Currency: Polski Złoty (1 EUR ~ 4.19 PLN)

GDP in 2010: 1 415 bln PLN (ca. 354 bln EUR ~3.99 EUR/PLN)

GDP growth: 1.6% (2009), 3.9% (2010), 4.3% (2011)

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

ES

-0,1% PT

1,4%

FR

1,6%

BE 2,1%

NL 1,8% DE

3,6%

EE 3,1%

LV -0,3%

LT 1,3%

IT

1,3%

TR

7,5%

HU 1,2%AT 2,0%

RO -1,3%

SK 4,0%

FI

3,1% SE

5,5%

UK

1,3%

GR

-4,5%

DK

2,1%

BG 0,2%

IR

-1,0%

CZ 2,4%

NO

0,4%

PLPL

+4,3%*+4,3%*

GDP changes in 2010 (Poland in 2011)

Source: Eurostat.

2009

Poland was the only economy in the EU with growing2010

Poland was the third fastest growing economy in the EU

2011

Polish economy was growing twice faster than EU average

2012

Poland is expected to develop at the fastest pace in Europe (Europ. Commision)

2009

Poland was the only economy in the EU with growing2010

Poland was the third fastest growing economy in the EU

2011

Polish economy was growing twice faster than EU average

2012

Poland is expected to develop at the fastest pace in Europe (Europ. Commision)

*Data for 2011.

Source: UNCTAD, World Investment Prospects Survey 2009-2011.

Main advantages of Poland

• Stable economic situation

• Market growth

• Size of internal market

• Access to regional markets

• Cooperation with suppliers and business

• System of investment incentives

Main advantages of Poland

• Stable economic situation

• Market growth

• Size of internal market

• Access to regional markets

• Cooperation with suppliers and business

• System of investment incentives

Poland is 6th most attractive investment location in the worldPoland is 6th most attractive investment location in the world

Strenghts: Image (I)

Source: World Investment Report 2011

Strenghts: Image (II) World Investment Report 2011

Most attractive countries for FDI locationMost attractive countries for FDI location

Poland is 6th most attractive investment location in the worldPoland is 6th most attractive investment location in the world

Strengths: Image (III)Poland in Financial Times

FDI quality in industrial processing sector

Source: Financial Times/ FDI Intelligence.

Poland– 3rd place in the World, 1st in Europe

7

It is expected that emerging markets in next 7 years will be reposponsible for over 50% of global GDP

It is expected that emerging markets in next 7 years will be reposponsible for over 50% of global GDP

Soruce: Fortresses and Footholds: Emerging market growth strategies, practices and outlook, Deloitte, Styczeń 2012 r.

Strenghts: Image (IV)

45% of transnational corporations that invest in developing countries point Poland as a location that offers the biggest opportunities of income increase in 3-year perspective

45% of transnational corporations that invest in developing countries point Poland as a location that offers the biggest opportunities of income increase in 3-year perspective

Poland takes the 2nd place in Eastern Europe (after Russia)Poland takes the 2nd place in Eastern Europe (after Russia)

One organisation may be wrong, but a few of them must be rightOne organisation may be wrong, but a few of them must be right

6th place globally in most attractive FDI destinations ranking

UNCTAD

3rd place globally in quality of processing industry

Financial

Times

3rd place in Europe in terms of pace of growth jobs created due to FDI

Ernst & Young

Strenghts: Image (V)

Poland is one of the fastest developing countries: • 5th in the World,• 1st in Europe.

Poland is one of the fastest developing countries: • 5th in the World,• 1st in Europe.

Source: The Economist 2011.

Strenghts: Image (VI)

Source: CB Richard Ellis, Wrzesień 2011.

Strenghts: Image (VII)

Strenghts: Image (VIII)

3rd location worldwide for business services

Source: The Hackett Group, April, 2012.

Poland is on the 3rd place worldwide on the shortlist destinations of companies searching for the best location for

financial, accounting advisory centers.

Poland is on the 3rd place worldwide on the shortlist destinations of companies searching for the best location for

financial, accounting advisory centers.

Strenghts: Image (IX)

„Poland is one of the world's few success stories since the fall of the Soviet bloc, a development that is particularly noticeable in comparison with other countries in Eastern Europe.

Statistics show that hardly anyone in Europe works as much per year as the Poles, and that they are also happier on average than other Europeans.”

Der Spiegel, (May 2012) The Miracle Next Door. Poland Emerges as a Central European Powerhouse

„Poland is the most striking recent economic success story in the EU. It is the only country not to have fallen into recession in 2009 and is pegged to have the fastest GDP growth in the union this year, while the government of premier Donald Tusk enjoys a rare political stability, embarking on its

second term of office.”Financial Times (June 2012) Euro 2012 to highlight Poland’s success

Strenghts: Image (X)

„Poland is the South Korea of Europe – its economy moves faster than the German locomotive.” La Repubblica (June 2012) ·

Strenghts: Image (XI)

„Poland remains, despite the crisis, the champion of economic growth. The state budget has doubled in the last decade, the country was well governed.”Die Welt (June 2012), Wunderkind Polen

„Poland is already the champion of Europe - in terms of economic growth. An estimated GDP growth for 2011 was revised upwards by Brussels (to 4.3%) and is nearly three times bigger than the average of 27 (1.5 %).What saved the Polish growth during the 2009 crisis is that it is driven by strong domestic demand (population of 38 million).”Le Figaro (March 2012) La Pologne, championne européenne de la croissance

Ca. 90 thousand projects have received support of EUR 14,2 bn. Certified payment application constituted 105% of allocations

Strenghts: EU funding (I)Support areas

Transportation• 779 km built/reconstructed expressways• 4 236 km built/reconstructed national and local roads• 635 km built/reconstructed railways

Transportation• 779 km built/reconstructed expressways• 4 236 km built/reconstructed national and local roads• 635 km built/reconstructed railways

Strenghts: European funding (II)What have we reached? Examples

Ecology• 13 000 km built/reconstructed sewerage,• 5 700 km built/reconstructed water supply pipelines• 275 built/reconstructed city water pipelines• 1 729 built/reconstructed home wastewater treatment plants

Development of human capital 2,7 mln people (incl. 1,6 mln women) has received supprot from ESFDevelopment of human capital 2,7 mln people (incl. 1,6 mln women) has received supprot from ESF

Entrepreneurship and innovations 2 799 of SME received support for new implemented investments 17 science parks have received support

Strenghts: European funding (III)Absorption of europan funding (mln EUR)

Poland and EU member states

Strenghts: Human Resources (I)

Źródło: EIU, Eurostat.

Main university centres

Szczecin

Tricity

Warsaw

Poznan

Wroclaw

Cracow

Lodz

Students in given EU countries

• 20 million of talented young people, who speak foreign languages

• 2 mln students, over 400 000 graduates every year

• 87% of students speak foreign languages

• 50% of population is younger than 35 yrs. (in the group between 20 and 29 y.o. 1/3 studies)

• there is 460 of higher education institutions in Poland

• 20 million of talented young people, who speak foreign languages

• 2 mln students, over 400 000 graduates every year

• 87% of students speak foreign languages

• 50% of population is younger than 35 yrs. (in the group between 20 and 29 y.o. 1/3 studies)

• there is 460 of higher education institutions in Poland

0%

10%

20%

30%

40%

50%

18-24 25-34 35-44 45-54

English German Russian

Foreign language capability by age groups

Source: CBOS Survey

Foreign language capability among students

0%

20%

40%

60%

80%

100%

English German Russian French Spanish

Learning of foreign languages is obligatory in the Polish education system

English is the most popular foreign language in Poland

Source: Randstad.

Children learn foreign languages from the age of 6

Language proficiency is one of the strongest points for Poland as a BPO center

Strenghts: Human Resources (II)

Strenghts: Human Resources (III) Attractiveness in terms of number of students

Source: European Cities and Regions of the Future 2012/13, fDi Intelligence

Strenghts: Size of the market

Markets served:

• Internal market of 38 mn people

• Unlimited access to the EU market

• Strong relations with CIS and Balkan states

Markets served:

• Internal market of 38 mn people

• Unlimited access to the EU market

• Strong relations with CIS and Balkan states

promień 1000 km250 mln ludzi

promień 2000 km

550 mln ludzi

Stable economy:

•GDP growth in Poland 3.9% 4.3% in 2011

•Main growth factors: domestic demand and foreign trade

Stable economy:

•GDP growth in Poland 3.9% 4.3% in 2011

•Main growth factors: domestic demand and foreign trade

I. CIT exemption in Special Economic Zoneonly available in Special Economic Zone (SEZ)

II. Government grants through individual negotiationsindividually approved and granted by the Ministry of the Economy based on the Council of Ministers’ Resolution

III. Real estate tax exemptionsubject to negotiation with the local authorities only in case if the investor is the owner of the building(provided by the Commune Council)

IV. Cash grants available through EU Fundssubject to negotiation with different managing institutions depending on the investment project key parameters

Leverages: State aid (I)

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

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

Leverages: State aid (II)Special Economic Zones

Special Economic Zone (SEZ) is an especially dedicated area where investors receive special benefits

Major purpose of SEZ is to support local growth There are 14 SEZ + many subzones Cumulative area = 20 000 hectares SEZ will operate at least until 2020 Permits to conduct activities in SEZ are issued by

the authorities of each SEZ Minimum investment: EUR 100,000 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 aidplot of land prepared for an investment project, available at a competitive pricefree assistance in dealing with formalities relating to the investment project

• Corporate Income Tax (CIT) rate: 19%

• Personal Income Tax (PIT) rates: 18% & 32%

• Value added tax (VAT) basic rate : 23%reduced rates : 8%, 5% export rate : 0%

• Social Security Tax paid by employer

between 17.48% and 20.41%

• Corporate Income Tax (CIT) rate: 19%

• Personal Income Tax (PIT) rates: 18% & 32%

• Value added tax (VAT) basic rate : 23%reduced rates : 8%, 5% export rate : 0%

• Social Security Tax paid by employer

between 17.48% and 20.41%

Tax rates

FDI Flow to Poland

2011: EUR 10.2 bn 52% increase over 2010

2011: EUR 10.2 bn 52% increase over 2010

Źródło: Narodowy Bank Polski, luty 2012 r.

Source: PAIiIZ, 2011

PAIiIZ projects in 2011

• Number of completed projects: 53

• Estimated value: EUR 1 171 mn.

• New jobs: 10 284

• Key sectors:• BPO• automotive• electronics

• Main source countries:• USA• Japan• France

• China

In April, 2012 PAIiIZ cooperated with 150 investors

Projects served by PAIiIZ in 2010 & 2011

Source: PAIiIZ, February 2012.

Projects currently served by PAIiIZ

Value: EUR 5.0 bn

New work places: 34 576

Key sectors:

• BPO, R&D

• Automotive

• Machine

• Elektronics

Value: EUR 5.0 bn

New work places: 34 576

Key sectors:

• BPO, R&D

• Automotive

• Machine

• Elektronics

In April, 2012 PAIiIZ conducted 150 investment projectsIn April, 2012 PAIiIZ conducted 150 investment projects

Major source countries of investors:

USA (34 projects, EUR 789 mn.)

UK (18 proj. EUR 575 m.)

Germany (15 proj. EUR 212 m.)

People’s Republic of China (9 proj. EUR203mn.)

Major source countries of investors:

USA (34 projects, EUR 789 mn.)

UK (18 proj. EUR 575 m.)

Germany (15 proj. EUR 212 m.)

People’s Republic of China (9 proj. EUR203mn.)

Source: PAIiIZ, April, 2012

Strengths: Poland’s export growth(bn EUR in 2011)

8.7 United Kingdom

35.4 Germany

France

7.3 Italy

6.1 Russia

8,3 Czech Republic

8.3

Źródło: Narodowy Bank Polski, Gazeta Wyborcza, luty 2012 r.

• Despite turmoil in the global economy, global FDI inflows rose by 17% in 2011, to $1.5 trillion, surpassing their pre-crisis average.

• UNCTAD estimates that FDI flows will rise moderately in 2012, to around $1.6 trillion.

• Developing and transition economies continued to account for half of global FDI in 2011 as their inflows reached a new record high.

• Despite turmoil in the global economy, global FDI inflows rose by 17% in 2011, to $1.5 trillion, surpassing their pre-crisis average.

• UNCTAD estimates that FDI flows will rise moderately in 2012, to around $1.6 trillion.

• Developing and transition economies continued to account for half of global FDI in 2011 as their inflows reached a new record high.

Source: UNCTAD, January, 2012.

Global FDI inflows (USD Billions)

Strength: FDI’s growth (I)

Flash estimates for 2011

Strength: FDI’s growth (II)

Flash estimates for 2011

UNCTAD:•FDI inflow to Poland increased to USD 14.2 bn in 2011,

•from USD 9.7 bn in 2010,

•that means 46.7% increase.

UNCTAD:•FDI inflow to Poland increased to USD 14.2 bn in 2011,

•from USD 9.7 bn in 2010,

•that means 46.7% increase.

Source: UNCTAD, January, 2012.

NBP:•FDI inflow increased to EUR 10.2 bn in 2011,

•vs. EUR 6.7 bn in 2010,

•that means 52% increase.

NBP:•FDI inflow increased to EUR 10.2 bn in 2011,

•vs. EUR 6.7 bn in 2010,

•that means 52% increase.

+46.7%

+17%

Source: UNCTAD, January, 2012.

World

Poland

* Estimates

* Estimates

Strength: FDI’s growth (III)

Flash estimates for 2011

Warsaw is one of the most atractive localizations for FDI in Europe

Place City Country

1 London United Kingdom

2 Paris France

3 Vienna Austria

… … …

20 Prague Czech Republic

21 Warsaw Poland

22 Barcelona Spain

23 Antverpia Belgium

Warsaw third in the CEE region•After Moscow (4th place) and Prague (20th place)•Improvement by one position vs. former edition.

Source: European Cities and Regions of the Future 2012/13, fDi Intelligence

Strength: localizations (I)

Warsaw in the top of the European business friendly institutions

Place City Country

1 London United Kingdom

2 Moscow Russia

3 Brussels Belgium

4 Warsaw Poland

5 Prague Czech Republic

6 Paris France

7 Copenhagen Denmark

8 Stokholm Sweden

Source: European Cities and Regions of the Future 2012/13, fDi Intelligence

Strength: localizations (II)

Top 10 region of the CEE region in terms of investment attractiveness

Place City Country

1 Woj. Małopolskie Poland

2 Woj. Opolskie Poland

3 Kraj Środkowoczeski Czech R.

4 Kraj Pilzneński Czechy R.

5 Pardubice Czechy R.

6 Aglomeracja Śląska Poland

7 Zaporoże Ukraine

8 Obwód Stara Zagora Bulgaria

9 Region Tuapsiński Russia

10 Woj. Wielkopolskie Poland

Źródło: European Cities and Regions of the Future 2012/13, fDi Intelligence

Strength: localizations (III)

Top 10 cities in the CEE region in terms of attractiveness

Źródło: European Cities and Regions of the Future 2012/13, fDi Intelligence

Place City Country

1 Katowice Poland

2 Kraków Poland

3 Poland Poland

4 Lwów Ukraine

5 Brno Czech Republic

6 Warszawa Poland

7 Ostrawa Czech Republic

8 Poznań Poland

9 Cheb Czech Republic

10 Moskwa Russia

Strength: localizations (IV)

Sectors of opportunities- Business Services Sector -

Offshore haven in Poland Poland is still among top offshore locations in the world. The boom which has started over 3 years ago is not weakening at all. Today BBS in Poland is valued at over $ 3,6 bn, in the following 12 month is expected to grow up to $ 4.5 bn, increasing the employment from 80,000 to 100,000 in business services centers.

ABSL

Source: Association of Business Services Leaders, Offshore haven in Poland, April 2012

Pros and cons of Poland

great location in the heart of Europe

platform to reach consumers across Europe

one of the largest and fastest growing markets in the EU

its large and excellent, well-educated and eager-for-success labor force

- quality of road and railway infrastructure

- red tape

- select labor market regulations

Why Poland?

Availability of skilled human resources

Economic and political stability

Effective incentive system including EU-Funding

Strategic location – gateway to the EU

00-585 Warszawa, ul. Bagatela 12

tel. (+48 22) 334 98 00, fax (+48 22) 334 99 99

e-mail: post@paiz.gov.pl

Thank you for your attention