Rudolf A. Thaler, Commercial Counselor at the Austrian Embassy in Warsaw, talks to Krzysztof Pawlik.

¡ö You have been in Poland for many years now. What is your experience in doing business here?
Generally, I would say that Poland is a very interesting market for Austrian companies. First of all, if you take under consideration the distance between our countries, it is a very close market. For instance, it takes a lot longer to travel from Vienna to some western parts of Austria than to Cracow. Additionally, we have observed for some time a growing interest in bilateral cooperation between Austria and Poland. In the last couple of months, I would say that it is even booming. In 2004 Austrian exports to Poland increased by 20 percent in general, with a noticeable growth of Polish exports to Austria as well. But in the first two months of 2005 we reported an increase of 85 percent, which is a rather outstanding figure. This represents a very positive trend in Austrian-Polish cooperation. The majority of Austrian companies doing business in Poland are very satisfied.

We organize numerous different business meetings and conferences for Austrian investors and our general advice for them is simply: ¡°Come and see. Meet the people. Try to find a local partner or set up your own business here.¡± As far as we are concerned, the facts prove that this idea works.

¡ö In which sector of the Polish economy are Austrian investors most active?
These sectors include construction, building materials, banking, insurance and the packaging and food sectors. In terms of foreign investments, Austrian companies are pioneers in some of these sectors. For example, there are quite a few buildings in Warsaw constructed or financed by Austrian investors or built with the use of Austrian materials by Austrian subcontractors. The ¡°Austrian¡± factor is often not even recognized when you see the final product¡ªfor example, the building. Recent projects have included the Intercontinental Hotel and Polonia Hotel. When it comes to the banking sector, Raiffeisen Bank was the first foreign bank to receive a banking license in Poland. Austrian companies are also doing very well in the food sector. Take, for example, Red Bull. It is recognized as an international brand, but this product is actually produced by an Austrian company.

¡ö Did Poland¡¯s integration with the European Union help Austrian investors in Poland?
In general, joining the EU, and becoming an integral part of the common market is a stimulating factor for any economy. This was true for Austria when we joined the European Union and is now true for Poland. When it comes to Austrian investors, one look at the statistics shows a large increase, even though Austrian-Polish cooperation began long before Polish integration with the EU. The establishment of common regulations, tax rates and EU laws is probably most important for small and medium-sized enterprises, which are always more cautious when investing than large international corporations. For SMEs, Poland¡¯s integration with the EU equals much greater confidence.

As further proof, I would like to point out that the Austrian Chamber of Commerce has recently established a branch in Cracow as a response to growing interest from small and medium-sized companies in investing in the southern part of Poland.

¡ö Recently Poland missed out on a few large international investment projects. Will Austrian investors follow the same course?
Definitely not. As I have already said, Poland is a very attractive market for Austria and we are continuously increasing our cooperation as well as extending it to some new areas of business. From our own experience and from the companies that we work with, we know that Austrian investors are really satisfied with the business environment in Poland. The general opinion is that it is very easy to find good business partners on the Polish market as well as very good, experienced and highly educated people.

There are many new projects underway and there is a lot going on in our bilateral cooperation. Quite recently we hosted a delegation from Tirol, headed by its governor, as well as a delegation from Upper Austria, also headed by the governor of Upper Austria and including an economic delegation. A couple of days ago, we received a delegation from Styria visiting Cracow. Additionally, we are organizing promotional events in Austria to inform companies and potential investors about the huge opportunities offered by the Polish market and to say a few words about how to do business in Poland and with Poles.

Unfortunately, Polish investment statistics do not reflect actual Austrian investments. The current figures were already reported in mid-2001¡ª$1.2 billion. Then that figure dropped in 2002 to around $800 million and now we are again at the level of $1-1.2 billion. These figures show a trend, which is actually far from the truth. This results from the fact that in 2002 Poland changed its criteria for calculating statistics. The new method does not include investments below $1 million. For an economy like that in Austria, which in a large part is based on small and medium-sized enterprises, such a criterion is very unfavorable. We have many companies whose investments in Poland start at $100,000 and gradually increase, for example, to $900,000 but never cross the $1-million threshold. In the statistics, such businesses are not regarded as investors. According to the very same statistics, Austria today has no more than 40 companies operating on the Polish market. This is an inaccurate picture. We have recently published a booklet on Austrian companies that are active in Poland, which includes over 200 companies. Moreover, according to the statistics compiled by the Austrian National Bank, Austrian businesses have invested over 3 billion euros in Poland so far. This reveals a rather significant gap between the two sets of statistics, but also proves clearly that the Austrian companies are much more active than on paper.