1. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Doing Business in Poland – Discover Eastern Poland Arkadiusz TARNOWSKI, Ph.D. Polish Information & Foreign Investment Agency

2. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Competitiveness & FDI Eastern Poland – Macroregion Macrofuture Perception & Taxes & Incentives Why Poland Cooperation with China What makes Poland a special place

3. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Poland - Key Facts Area:312 700 sq km – 6 th in European Union Population:38.5 million – 6 th in European Union Currency:Polish Zloty (1 USD ~ 3.7 PLN, 1 EUR ~ 4.1 PLN) GDP growth:3.9% (2010), 4.5% (2011), 2.0% (2012), 1.6% (2013), 3.3% (2014), 3.4% (2015, EC forecast) Political stability: Ruling party (Civic Platform) has been re-elected for a consecutive term Membership:EU, NATO, OECD, WTO, Schengen Zone Poland is knocking on G20’s door

4. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Large internal market – 38 mn consumers Healthy banking sector: –Poland passed all the stress tests –Low share of derivatives in portfolio of Polish banks PLN is not pegged to the Euro Low GDP-from-exports dependence: Poland only 45% (Czech Republic 73%, Slovakia 94%) Low inflation rate – -1.1% (April 2015) Why is Poland a crisis-proof country? Source: Eurostat, National Bank of Poland, May 2015 Poland is characterised by: well-qualified and productive workforce, stable macroeconomic situation, relatively low level of public debt comparing to Western European countries, transparent tax and legal systems, favorable conditions both for manufacturing and services investments.

5. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme  22.6 m people aged 44 and less (59%)  almost 2.0 mn students (2012/2013)  more than 485 thous. graduates (2012/2013)  over 36 thous. foreign students  more than 90% of students speak foreign languages  population with higher education: 17%  22.6 m people aged 44 and less (59%)  almost 2.0 mn students (2012/2013)  more than 485 thous. graduates (2012/2013)  over 36 thous. foreign students  more than 90% of students speak foreign languages  population with higher education: 17%  460 higher education institutions  19 universities  25 technical universities  77 academies of economics  200 different majors taught  growing number of science students  460 higher education institutions  19 universities  25 technical universities  77 academies of economics  200 different majors taught  growing number of science students Students and graduates Source: Central Statistical Office Academic centers POZNAN WROCLAW WARSZAWA KRAKOW LODZ SZCZECIN TRI-CITY KATOWICE BYDGOSZCZ/TORUN BIALYSTOK OLSZTYN ZIELONA GORA OPOLE KIELCE LUBLIN RZESZOW 201 > 151 – 200 101 – 150 51 – 100 50 < No. of students (thousands) The most popular majors

6. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Languages in business centres Source: Hays 2013 Services conducted in the 400 centers are provided in 37 languages

7. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme FDI inflows to CEE countries (mln USD) Source: UNCTAD World Investment Report 2012

8. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Perception & Taxes & Incentives Eastern Poland – Macroregion Macrofuture Competitiveness & FDI Why Poland Cooperation with China

9. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme 13 th place as the most attractive FDI destination 1 st place in the CEE region – the most attractive country to establish operations 3 rd place worldwide as the best quality location for manufacturing projects 2 nd location in Eastern Europe and Russia offering the greatest revenue opportunities over next three years Poland classified as a mature outsourcing location 3 rd best location in the world after India and China, for outsourcing businesses in financial, accounting, advisory 6 th among top 10 destination countries in Europe in 2012 International recognition

10. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Effective incentives system Tax breaks CIT exemption in Special Economic Zone CIT relief for acquisition of new technology Real estate tax exemption Government grants Cash grants available through EU Funds Cash support The EU budget: present and future financial perspective 2007-2013 Total:975 bn EUR Poland:69 bn EUR (7% of total) 2014-2020 Total:960 bn EUR Poland:72.9 bn EUR (7.6% of total)

11. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Tax rates Corporate Income Tax (CIT)19% Personal Income Tax (PIT)18%, 32% Value added tax (VAT) basic: 23% reduced: 8%, 5% export: 0% Social Security Tax paid by employer between: 19.48% and 22.67% Source: PAIiIZ compilation

12. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Corporate income tax rates across Europe Source: http://www.worldwide-tax.com/ Entrepreneurs in Poland pay one of the lowest CIT in Europe

13. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme 14 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 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 aid plot of land prepared for an investment project, available at a competitive price free assistance in dealing with formalities relating to the investment project

14. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme 35% 20 % Warsaw Warsaw: - until 31.12.2017 – 15% - as of 1.01.2018 – 10% 35% 50%35% 50% 35% 25% Regional state aid map – Maximum intensity in years 2014-2020

15. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Priority sectors Production automotive electronics aviation biotechnology „big investment” in other sectors Modern services ICT SSC BPO R&D activity (e.g. software development) Program of support of investments of considerable importance for Polish economy Government grants – priority sectors development of innovativeness and competitiveness of Polish economy Purpose of support 53 programmes of total amount PLN 900 m (since 2004) 19,000 of new jobs Result of support

16. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Cooperation with China Eastern Poland – Macroregion Macrofuture Competitiveness & FDI Why Poland Perception & Taxes & Incentives

17. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Source: fDi Intelligence from The Financial Times Ltd Chinese FDI into Europe 2003-2015 Between 2003 and 2015 a total of 1247 Chinese FDI projects worth EUR 47.2 bln were recorded in Europe, creating over 180 000 jobs (806 companies). Top 5 companies: Huawei Technologies (85 projects); ZTE (37); Bank of China (27); Industrial and Commercial Bank of China (ICBC) (21); China National Chemical (17); Major sectors: Communications (166); Electronic components (136); Industrial Machinery, Equipment & Tools (127); financial services (86); Automotive OEM (63); Source states: Beijing Municipality (288); Guangdong (259); Jiangsu (123); Zhejiang (120); Shanghai Municipality (118); Destination countries: Germany (413 projects worth EUR 2.5 bln); UK (169 projects worth EUR 9.2 bln); Russia (115 projects worth EUR 16.8 bln); France (83 projects worth EUR 1.0 bln); Netherlands (47 projects worth EUR 0.5 bln); Poland (35 projects worth EUR 1.2 bln);

18. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme YearNumber of projects Jobs createdCapital investment TotalAverageTotal (EUR m)Average (EUR m) 2015 1156 7.26 201441,482370233.9358.44 20134939234127.9932.02 2012450012542.5210.67 201191,275141122.4713.65 20104958239253.6163.42 200921396915.137.61 20083753251198.6766.22 200711,000 85.03 200611,500 111.54 20051100 9.54 2004113 2.80 Total358 8152511 210.5834.56 Source: fDi Intelligence from The Financial Times Ltd Chinese FDI into Poland 2003-2015

19. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Top 10 Chinese Companies in Poland: Jobs Created and Capital Investment The top 10 companies account for 65% of job creation and 56% of capital investment Source: fDi Intelligence from The Financial Times Ltd Company Name Jobs createdCapital investment Total Average per project Total (EUR m) Average (EUR m) Nuctech2939754.0618.02 Aviation Industry Corporation of China52217477.4225.81 Dragon Power2096914.784.90 XCMG Construction Machinery2729051.1817.06 Haier Group67233668.3234.12 Admiral Overseas (AOC)2,5001,250196.5798.24 EiW Industrial Development100 9.54 Sany511 48.12 BYD Electronics590 157.47 Shanxi Yuncheng Plate-Making Group30 5.16 A total of 25 companies from China invested in Poland between January 2003 and March 2015

20. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Chinese FDI into Poland trends by sectors Source: fDi Intelligence from The Financial Times Ltd Sector No of projects Jobs CreatedCapital investment TotalAverage Total (EUR m) Average (EUR m) Industrial Machinery, Equipment & Tools101,179117138.7013.90 Automotive Components41,02225591.9023.00 Automotive OEM31,770590472.40157.50 Consumer Electronics377225778.4026.20 Financial Services346815621.807.30 Non-Automotive Transport OEM232916468.0034.00 Communications21959753.0026.50 Business Machines & Equipment22,5001,250196.6098.20 Business Services125 0.50 Aerospace1136 34.60 Other sectors441910454.6013.60 Total358,8152511,210.6034.60

21. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Eastern Poland – Macroregion Macrofuture Coooperation with China Competitiveness & FDI Why Poland Perception & Taxes & Incentives

22. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme What makes Eastern Poland different? Lithuania Russia Belarus Ukraine Slovakia Baltic Sea Warminsko- Mazurskie Podkarpackie Swietokrzyskie Podlaskie Lubelskie One of the fastest developing regions of Poland Territorial potential: 212 cities 6 cities over 100 thous. inhabitants 38 border’s crossing points between the EU and Eastern Europe 6 road’s and 5 railway’s international transportation corridors between the EU and Eastern Europe the lowest labour costs in Poland is one of the most ecofriendly regions in the whole of Europe young and highly-skilled workers Positive outlook for road infrastructure development Warsaw

23. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Young well-educated population is the major asset of Eastern Poland ✓ 31.8% of population below 25 ✓ birth rate at the level of 2.7% (one of the highest in Poland) ✓ 53 universities in Eastern Poland ✓ over 331,000 students – more than 47,000. students are studying the technical faculties ✓ 213,000 students of the secondary vocational schools in Eastern Poland 17.3% 63.8%18.9% Population in production age Population in pre- production age Population in post- production age

24. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme

25. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Priority Sectors in Eastern Poland ✓ the food sector – dairy products produced in an ecological way (ca. 50% of all eco farms are located in Eastern Poland) ✓ furniture production – 4th biggest producer in the world ✓ the metal and machinery sector – modern technology park actively supported since the entry to the EU in 2004 ✓ BPO – young people fit for the industry as they know languages ✓ the aviation industry – Polish aircraft industry is situated in 90% in Eastern Poland ✓ the yacht industry – tradition of production in the 1000 lake district ✓ business tourism – luxury hotels and spas for an affordable price

26. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Active projects serviced by PAIIIZ (as of the end of May 2015) PAIIIZ has in the project pipeline 169 potential investments Value of investment: EUR 3.0 bn Number of new job places: 30 660 Main sectors: ✓ Automotive (33) ✓ Business Process Outsourcing (32) ✓ R&D (19) ✓ Aviation (12) Major countries-investors: ✓ USA (47) ✓ Germany (27) ✓ France (11) ✓ China (7) – 5 in BPO, 1 in biotechnology and 1 in pharmaceutical / 8th major partner

27. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Why Poland Coooperation with China Competitiveness & FDI Eastern Poland – Macroregion Macrofuture Perception & Taxes & Incentives

28. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Poland Highlights Poultry – The largest producer in the EU Apples – the largest producer in Europe (third in the world) Tobacco – second biggest producer in the EU Champignon mushrooms – the largest producer in Europe Furniture – Third largest exporter in the EU Windows and doors – second largest producer in the EU (largest exporter of PVC and wooden windows in Europe) LCD sets & Household appliances – largest producer in the EU Aviation sector - Virtually every passenger aircraft in the world carries at least one part made in Poland Yachts – European leader in the production of yachts up to 9.5 m

29. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Why Poland? Availability of skilled human resources Economic and political stability Effective incentive system including EU-Funding Strategic location – gateway to the EU

30. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Tatra Mountains Baltic Sea Masurian Lake District Bialowieza Forest Landscape diversity

31. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Cracow’s Historic Center Wieliczka Salt Mine Wooden Churches of Southern Little Poland Old City of Zamosc Castle of the Teutonic Order in Malbork 13 properties inscribed on the World Heritage List! There are 13 UNESCO World heritage sites in Poland!

32. Project co-financed by the European Union under the European Regional Development Fund as part of the Development of Eastern Poland 2007-2013 Operational Programme Eastern Poland Macroregion - Macrofuture Polish Information & Foreign Investment Agency ul. Bagatela 12 00-585 Warszawa tel. +48 22 334 98 00 fax + 48 22 334 98 86 e-mail: invest@paiz.gov.pl www.paiz.gov.pl Thank you for your attention