Poland Attractive for Business
January 31, 2013
Poland is attractive to foreign manufacturing companies because of its central location in Europe, stable economy, flexible labor market, access to highly qualified human resources and state aid system.
Poland is one of the most attractive business locations in Europe, according to Made in Poland: Investor’s Guide for Manufacturing Companies, a report by professional services company Jones Lang LaSalle in association with the Polish Information and Foreign Investment Agency (PAIiIZ), and the Ernst & Young and Hays Poland companies.
John Duckworth, managing director for Central and Eastern Europe at Jones Lang LaSalle, said, “Poland has become one of the most vibrant and thriving business locations in Europe. While other European economies have stagnated or gone into recession, growth in Poland has steadily continued during the last five years. In just 20 years, Poland is on the cusp of joining the world’s 20 largest economies. Its 38 million population creates a large domestic market, with dynamic growth in consumption. These advantages, linked with a central location in Europe, stable political climate, access to highly-skilled work force, attractive labor costs and infrastructure developments, working in tandem with the availability of investment grants and incentives, make Poland a strategic location also for Asian and U.S. manufacturing and logistics companies planning to expand in Europe. The country is becoming a platform to the Central and Eastern European region and to the wider European markets.”
Sławomir Majman, head of PAIiIZ, said, “The future of investment in Poland is associated mainly with investment in manufacturing rather than portfolio investment. Importantly, investors are no longer seeking assembly line workers in Poland, but are increasingly looking for highly qualified specialists. Our goal is to create a manufacturing base for the largest possible number of companies, especially in the new technology sector. Sixty percent of the foreign investment projects that were carried out in Poland with the help of PAIiIZ last year were technologically advanced manufacturing projects.”
Employment costs, work-force availability and the quality of labor are the three main HR factors that determine the investment potential of a given location. In Poland, average pay is 7.1 euros per hour, less than in the Czech Republic, Slovakia and Hungary. However, the key advantage of Poland’s labor market is the large number of experienced specialists available. Access to state aid is another important factor behind investment decisions. This factor is taken into consideration by investors from the manufacturing sector, who can benefit from various forms of support in Poland, including corporate income tax (CIT) breaks in special economic zones, government grants as part of long-term support programs, and exemptions from real estate tax.
Paweł Tynel, executive director and Head of Grants and Incentives Advisory at Ernst & Young, said, “Competition for investors and for investment has increased significantly in recent years. Governments across Central and Eastern Europe have grown aware of this and have prepared new support systems for investors in the form of tax breaks and subsidies. Establishing dialog with the government when making a strategic decision on the choice of location for an investment project is very important for many investors with whom we work.”
The report says that growing transport costs, changes in the level and structure of demand, and currency and supply chain risks have had a noticeable impact on the investment attractiveness of some markets. As a result, a return to the original location or nearshoring—relocating some processes to a country that is close geographically and culturally—combined with a decreasing cost advantage, will be increasingly perceived as a way to increase operating efficiency.
This trend opens many opportunities for Poland, which has drawn many attractive projects thanks to its strategic location in the center of Europe and near Germany, combined with access to highly qualified workers and growing spending on research and development. Poland has also caught the eye of non-European investors, especially those from the United States and Asian countries, because of its role as a link between Central and Eastern European markets with their 100 million consumers and Western Europe with its 500 million consumers.