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The Warsaw Voice » Other » December 12, 2007
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Poland Attractive to Investors
December 12, 2007 By A.R.    
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Poland is increasingly popular with foreign companies, a fact confirmed by international league tables and a growing influx of foreign direct investment.

Poland is the most attractive destination for investors among 31 countries in Europe surveyed by the Federation of European Employers (FedEE). The surveyed covered 27 European Union member countries plus Iceland, Norway, Switzerland and Turkey. The ratings were based on 15 key indicators, including labor supply, human resources, employee relations and labor market flexibility, as well as inflation and labor costs. Poland's strongest points were access to a young work force, the presence of women in the labor force, and access to temporary workers, the report said. The report also praised Poland's collective labor agreements, the position of trade unions, and the average hourly wage. However, investment in training, the opportunities of recruitment from other employers, and restrictions on companies in firing workers, as well as internet literacy were given moderate scores.

Foreign investors give high ratings to the Polish economy, as shown by a recent report by the Ernst & Young consulting firm. In the firm's European Attractiveness Survey for 2007, Poland was ranked seventh worldwide in terms of attractiveness to foreign investors. The global leaders in the league table are China and the United States, while Germany and Britain top the list in Europe. Poland is the leader in Central and Eastern Europe.

Poland is the world's second most popular country, outdone only by China, when it comes to investment in industrial production. The key factors that determine Poland's success include its central location in Europe and low labor costs. Poland is also improving its standing among call-center investors. India remains the global leader in this area, but Poland has advanced two notches since last year and is currently number five.

Poland's reputation as an investor-friendly country is drawing more foreign investment capital to Poland. A record amount of foreign direct investment, over 15 billion euros, came into Poland in 2006, according to the National Bank of Poland. The biggest foreign investors in 2006 included Dell of the United States and Bridgestone of Japan, each with 200 million euros, followed by Japan's Sharp, with 150 million euros.

Global foreign direct investment (FDI) flows amounted to $1.3 trillion in 2006, rising more than 38 percent over the previous year and finishing close to the record level of 2000, according to the World Investment Report 2007, a yearly review of investment trends published by the United Nations Conference on Trade and Development (UNCTAD).

Poland outperformed all the other new European Union member states in FDI last year. National Bank of Poland (NBP) data shows that Poland attracted 15.06 billion euros in FDI last year, up by 81.9 percent from 2005 when the country drew 8.28 billion euros. Preliminary statistics suggested that Poland attracted less than 12 billion euros in 2006 FDI, but the NBP recently revised its data, taking into account so-called capital in transit. Capital in transit means funds passing through Poland as a result of investments made by corporations to expand their operations in various countries.

The FDI forecast for 2007 also looks promising. In the first nine months of the year, foreign companies invested 9.7 billion euros in Poland, 2.4 billion euros more than in the same period of 2006, the NBP reported. This year, the FDI influx should be "no smaller, and maybe even bigger" than in 2006, said the NBP's Józef Sobota.

Paweł Wojciechowski, president of the Polish Information and Foreign Investment Agency (PAIiIZ), said, "This year, we expect another record in FDI, at some 12 billion euros, or over 15 billion euros considering capital in transit."

In the first three quarters of the year, PAIiIZ monitored 42 projects in which foreign companies undertook to invest more than 1.1 billion euros in Poland. Most of these projects are by investors from the United States and the Far East. Compared with last year, there has been a considerable increase in the number of BPO projects, which now account for 22 percent of the total number of foreign investment projects in Poland, up from 14 percent in 2006. At the same time, the automotive sector saw a drop in the number of projects, from 14 percent to 7 percent in the first three quarters of 2007. Most projects this year have involved the consumer electronics industry, BPO centers and the automotive sector.

U.S. and Japanese companies are in joint first place in terms of FDI in Poland this year, followed by German businesses. Chinese companies, which are also increasingly keen to invest in Poland, have advanced to third place. The biggest projects this year have included an Indesit household appliance factory in Radomsko, central Poland, and a Toshiba LCD television plant in Kobierzyce near the southwestern city of Wrocław.
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