March 5th 2009,
Number 112




Dear Readers,

In today’s issue we recommend the account of the latest conference organised by PAIiIZ and the consulting firm MDDP which concerned the influence the Polish tax system exerts on investment climate in the country.
In the section Investment in Poland we write about a new LM Glasfiber production facility inaugurated on Wednesday in Goleniów. This week several important communiqués confirming the good macroeconomic condition of the country were issued, among them the information on the almost 3% GDP growth for the 4thQ of 2008. At the end of the issue you will find an article about the success achieved by students from the Warsaw University of Technology who won a contest organised by the European Space Agency (ESA).

Pleasant reading!

PAIiIZ’s editorial team

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PAIiIZ Conference: tax system’s influence on investment climate

The conference “Taxes in Poland and their influence on investment climate in 2008-2009” took place at the PAIiIZ Press Centre. The event was organised by PAIiIZ and the consulting firm “Michalik, Dłuska, Dziedzic i Partnerzy” (MDDP).

Jarosław Neneman PhD from the University of Łódź, Tomasz Olkiewicz from MDDP, Agata Mężyńska - Director of the PAIiIZ Economic Information Department (Source: PAIiIZ)

Changes in the Polish tax system introduced in 2008/2009 will improve Poland’s investment attractiveness. For the second time ever the Polish Information and Foreign Investment Agency together with an independent tax advisory firm – MDDP, prepared a guide to the Polish tax system. This year’s issue is expected to prove equally useful as the previous edition which was highly popular among foreign entrepreneurs.

The guide was a perfect opportunity to open a discussion on the future of the Polish tax system and ways to make the system more investor-friendly. Although national fiscal policy ranks among the major criteria determining decisions concerning investment location, it is the tax height that often proves decisive when countries of a similar location and market size are considered. It is the mobile sectors that tend to be most influenced by tax burdens e.g. logistic services, R&D projects, microprocessor production i.e. sectors of vital importance for the Polish economy. Poland’s investment acquisition strategy should not only involve tax rates issues but also aim at a simple and transparent tax system.

Agata Mężyńska, Director of the PAIiIZ Economic Information Department said that CIT rates reduction could effectively boost Poland’s investment attractiveness. Shifting taxation till the moment of profit redistribution, as it was done in Estonia, is also worth considering.

Tomasz Olkiewicz, economic expert and partner at the MDDP indicated several tax fields in need of reforms (e.g. concerning CIT and PIT) and specified tax changes which are most desired by entrepreneurs. Mr Olkiewicz added that the current tax solution offer in Poland is already very attractive and includes, among other things, tax concessions for companies investing in Special Economic Zones and leasing as a tool accelerating the depreciation of tangible fixed assets.

Jarosław Neneman PhD from the University of Łódź emphasised that Poland should strengthen its attractiveness and position in the region through a construction of a simple, transparent and stable tax system and a general tax reduction for companies and private income.

The guide, prepared by experts from the tax advisory firm MDDP, describes the Polish system in a clear way and highlights the elements which do exert vital influence on the general profitability assessment when it comes to investments location in the country. The over 60 page publication includes information on the current rates and deadlines foreseen for particular tax types as well as information presenting rules and principles helping foreign  investors to operate in the new environment.

The publication will be distributed by PAIiIZ, Investor Assistance Centres and other partners. Electronic version of the guide is available in Polish and English on the PAIiIZ website (www.paiz.gov.pl) and on the MDDP website (www.mddp.pl).

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PAIiIZ enters in co-operation with the Shanghai Overseas Investment Development Board and the Council for the Promotion of International Trade Shanghai

During his visit to Shanghai between February 25-28, 2009 Mr Sławomir Majman, member of the PAIiIZ management board signed a letter of intention concerning co-operation with the China Council for the Promotion of International Trade Shanghai Sub - Council (CCPIT) and a Memorandum of Understanding with the Shanghai Overseas Investment Development Board (SOIDB).

The letter of intention concerning co-operation with CCPIT was signed in order to support trade and investment initiatives taken up by Polish and Chinese entrepreneurs. The Memorandum of Understanding concluded by the Polish Information and Foreign Investment Agency and the Shanghai Overseas Investment Development Board results from the newly established and dynamically developing relationships between the institutions, initiated during Mr Majman’s Shanghai visit in November 2008. The Memorandum is bound to tighten the co-operation and streamline information exchange concerning business possibilities and investment acquisition strategies in both countries. A trade mission comprised of Polish SEZ representatives promoting investment opportunities in Poland in the electronic, chemical automotive, home appliances and telecommunication tools industries will be the first result of the concluded agreements. The mission is planned to take place in April/May this year. (PAIiIZ)

SOIDB and PAIiIZ representatives sign the Memorandum in the presence of Mr Rafał Baniak, Undersecretary in the Ministry of Economy (Source: SOIDB)

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Ministry of Economy to help entrepreneurs

Polish entrepreneurs’ organisations associated in international sector organisations may apply for funds to cover membership fees by the end of March. This year’s one-off subsidy may reach 45 thousand PLN.

In the project “Support for entrepreneurs’ organisations participation in international sector groups.” the Ministry will focus on an effective selection of organisations which will be granted subsidies to cover part of the membership fees they have to pay to be able to function within international associations.

In the long run the project should boost ways of representing Polish small and medium sized entrepreneurs in the European market as well as help promote Polish achievements and experiences abroad.

This year the maximum subsidy may reach 45 thousand PLN. Applicants active in more than one organisation will be eligible for an additional financial aid which, however, will not exceed 25 thousand PLN. Also organisations associating nonprofit entrepreneurs or entrepreneurs who transfer profits to statutory purposes, gather SME’s representatives (at least 60% of the members) and have been present in the market for at least two years are also entitled to apply for the funds. (PAP)

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LM Glasfiber inaugurates blade factory in Goleniów

On March 3rd LM Glasfiber, a company specialising in the production of blades for wind turbines, inaugurated its new blade production facility in Goleniów in north-west Poland.

The LM 61.5 rotor is fitted to the 5M wind turbine in Brunsbuttel, Germany
(Source - LM Glasfiber)

The new facility will be producing blades for wind turbine segment for onshore and offshore wind farms in the northern, central and eastern parts of Europe. The factory has been placed in Goleniów because of the optimal conditions for quick, flexible and cost-efficient transportation of the blades by sea or by land that this site provides. The good location with regards to the area’s infrastructure will enable LM Glasfiber to strengthen its competitiveness and lower the costs of transportation.

The Goleniów blade production facility is the 14th LM Glasfiber factory worldwide and the 4th in Europe. The factory has been under construction since February 2008 and has been constructed to be able to produce even the longest blades from LM Glasfiber. The factory which is currently ramping up will in this initial phase employ app. 380 people. (www.lmglasfiber.com)

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  • Ministry of Treasury: gross privatisation proceeds in February reached 202.9 million PLN

    As of the end of February 2009 gross proceeds from privatisation accounted for 202.9 million PLN - informed the Ministry of Treasury on Monday. Minister of Treasury Aleksander Grad estimates this year’s privatisation proceeds will reach 12 billion PLN. (PAP)

  • GDP exceeds expectations

    The 4th Q of 2008 witnessed a GDP grow by 2.9% y-o-y which means the figure is better than expected by analysts. The Central Statistical Office informed also that it is the domestic demand that continues to be the major factor determining GDP growth in Poland. In fact, the pace of the domestic demand’s growth was higher than the pace of the GDP in general and in the 4th Q reached 3.6%. (PAP)

  • Exchange rates (as of 15.01.2008):










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Good year of the Wałbrzych SEZ

The Wałbrzych Special Economic Zone continues to rank among the most attractive investment areas in the country. In 2008 the SEZ issued 37 permissions for new business enterprises which were jointly worth 2.6 billion PLN.

Last year saw 146 ha of the SEZ area developed as a result of the new initiatives. As of the end of 2008 facilities located in the SEZ were employing 31 thousand people i.e. 2,300 more than in 2007.

Investment outlays incurred by entrepreneurs operating in the SEZ accounted for 9.63 billion PLN i.e. rose by 1.77 billion PLN when compared with 2007 and by 3.76 billion in relation to 2006.

Since last year the SEZ has been hosting 12 new investors e.g. Rehau - window systems manufacturer, Cadbury - confectionery producer, Toyota - car maker, Electrolux - home appliances producer, BASF - chemical company and Hoerbriger - company manufacturing car components.

The Wałbrzych SEZ was established in 1997. It is located in the south-west Poland. To date the SEZ includes sub zones in the Dolnośląskie, Opole, Wielkopolska and Lubuskie regions.

In the “Report on SEZ 2008” published by Puls Biznesu the Wałbrzych-basaed SEZ ranked first both as far as the number of the recently issued permissions and the overall value of investments was concerned. (Wałbrzych SEZ „Invest-Park”)

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Successful students from the Warsaw University of Technology

Students from the Warsaw University of Technology win a contest organised by the European Space Agency (ESA).

SKA students at work (Author: Tomasz Rybus)

The prize in the contest consists in that the students will be able to install their project onboard a stratospheric balloon BEXUS which is to undergo a series of test flights in Kiruna above the Arctic Circle. This is not the first time Polish students ranked among the best students from all over Europe.

The winning experiment is called SCOPE, i.e. Stabilized Camera Observation Platform Experiment. The project consists in designing a manipulator-mounted camera able to observe selected points on the Earth. The device will fly aboard the stratospheric BEXUS balloon to the height of 35 km that is why it must be adequately prepared to work in such extreme conditions i.e. -90°C and low pressure 10 mBar (the air is so thin that man cannot breathe normally). The project’s coordinator is Mateusz Wolski. The winners have still several months to develop all the project’s details and send the device to Sweden in July 2009 for further testing. Should it pass all the test, it will be then installed in the BEXUS balloon and will undergo the final stage of trials during a tests BEXUS 8/9 flights. The winners will have the chance to personally witness the effects of their work in Kiruna above the Arctic Circle.

SCOPE may in the future help develop a number of practical solutions. One of the possibilities involves traffic monitoring solutions and monitoring the state of the environment – remote sensing methods enable to determine the forests health, soil humidity, and forecast agricultural crops. The students do not rule out the possibility of putting the project to commercial purposes. The REXUS/BEXUS (Rocket and Balloon Experiments for University Students) is an educational initiative developer by the German DLR and Swedish SNSB in co-operation with the European Space Agency (ESA). Thanks to the initiative students from the EU member states enjoy the opportunity to fly their projects on sounding rockets and stratospheric balloons. The programme enables students to get familiar with the workings of a big space agency and learn all the peculiarities involved in designing processes of space devisees.

Students' Space Association (SKA) was established in 1996 at the Warsaw University of Technology. The group connects young people interested in broadly based subject matter of space engineering and astronomy. SKA promotes space engineering in Polish society and helps its members develop by encouraging them to participate in contests and a variety of projects. Young SKA members promote Polish science in the country and abroad. (Warsaw University of Technology)

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Editorial office: Polish Information and Foreign Investment Agency, 00-585 Warsaw, Bagatela Street 12
Economic Promotion Department, tel: (+48 22) 334 99 49, fax: (+48 22) 334 99 99,
e-mail: redakcja@paiz.gov.pl
Polish Infomation and Foreign Investment Agency www.paiz.gov.pl