26 June 2018
Poland: Market Profile
- Picture: Poland factsheet
- Graph: Poland real GDP and inflation
- Graph: Poland GDP by sector (2016)
- Graphi: Poland unemployment rate
- Graph: Poland current account balance
- Graph: Poland merchandise trade
- Graph: Poland major export commodities (2016)
- Graph: Poland major export markets (2016)
- Graph: Poland major import commodities (2016)
- Graph: Poland major import markets (2016)
- Graph: Poland trade in services
- Graph: Poland FDI stock
- Graph: Poland FDI flow
- Graph: Poland short term political risk index
- Graph: Poland long term political risk index
- Graph: Poland short term economic risk index
- Graphi Poland long term economic risk index
- Graph: Poland vs global and regional averages
- Graph: Poland major export commodities to Hong Kong (2017)
- Graph: Poland major import commodities from Hong Kong (2017)
- Graph: Poland merchandise exports to Hong Kong
- Graph: Poland merchandise imports from Hong Kong
Poland, the largest economy in Central Europe, has seen broad-based productivity growth over the past decade and this has translated into remarkable progress in poverty reduction and shared prosperity. Despite a successful performance so far, however, a coherent set of policies is needed to respond to long-term challenges and opportunities, including managing one of the most rapidly aging societies in Europe, urbanisation challenges and leveraging technological change.
2. Major Economic Indicators
Note: (f) forecast
Source: IMF, World Bank
3. External Trade
3.1 Merchandise Trade
Source: WTO, World Bank WITS database
3.2 Trade in Services
4. Trade Policies
- Poland has been a member of WTO since 1 July 1995 and a member of GATT since 18 October 1967.
- Poland has been a member of the EU since 2004. All EU member states are WTO members.
- Trade flows are largely unhindered by import tariffs, which at 1.5% on average are among the lowest in the world, and non-tariff barriers to trade are minimal. There are no currency controls or import substitution policies that would burden importers, and trade standards and policies adhere to EU rules.
- Poland applies the EU's Common External Tariff (CET), which means goods manufactured and imported from within the EU are not subject to customs charges. The average tariff rate for EU states is just 1%, which is among the lowest globally, although goods imported from outside the EU will incur duties of between 0%-17%.
- The EU has imposed various anti-dumping measures on a wide range of products, predominantly in the areas of textiles, machine parts, steel, iron and machinery on goods coming from China and a few other Asian nations to protect domestic industries. Currently, a number of Chinese mainland-origin products are subject to EU’s anti-dumping duties, including bicycles, bicycle parts, ceramic tiles, ceramic tableware and kitchenware, fasteners, ironing boards and solar glass, which are of interest to Hong Kong and regional exporters. In November 2016, the European Commission (EC) imposed a provisional antidumping duty on imports of the some primary and semi-processed metals from China. The rate of duty is between 43.5%-81.1% of the net free-at-Union-frontier price before duty depending on the company. In the same vein, the rate of duty for similar goods from Belarus is 12.5% of the net, free-at-Union-frontier price before duty. As of end-December 2017, the EU did not apply any anti-dumping measures on imports from Hong Kong.
- Steel: In 2016, the EC introduced an import licensing regime for steel products exceeding 2.5 tonnes. The regulation will be active until May 15 2020.
- In March 2016, the EC announced a new support package for European farmers, which involves mobilising an estimated EUR500mn by 2019.
- In February 2018, the Polish government officially enacted its Act on Electromobility and Alternative Fuels. The Act will introduce excise duty exemptions for electric vehicles (EVs), tax exemptions for companies using EVs, a new government procurement plan based on electrifying its government fleet, as well as support for charging infrastructure development. This reform will position Poland well in terms of attracting investors that are higher-up the automotive and technology value chains.
- Value-Added Tax (VAT) is charged at a rate of 23% on sale of goods, services and imports; 0% applies to exports and supplies of goods within the EU. Reduced rates (applicable to specified goods and services indicated in the VAT Act, such as food, agricultural products and medical equipment).
- In April 2015, the Polish parliament amended the pharmaceutical law, restricting exports of medicinal products from the country. The amendment also introduced strict reporting obligations for marketing authorisation holders and warehouses.
Source: WTO – Trade Policy Review, BMI Trade and Investment Risk report
5. Trade Agreement
5.1 Multinational Trade Agreements
- Poland is a member of WTO (Effective date: July 1, 1995) and the EU since 2004.
- The European Union (EU) is a political and economic union of 28 member states that are located primarily in Europe. As an EU member, Poland applies the EU Common External Tariff and enjoys tariff-free trade within the EU. Within the Schengen Area, passport controls have been abolished. A monetary union was established in 1999 and came into full force in 2002, and is composed of 19 EU member states which use the euro currency; however, Poland maintains its own currency.
- The Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada will be provisionally applied as of September 2017. The agreement is expected to boost trade between partners as CETA removes all tariffs on industrial products traded between the EU and Canada. CETA also opens up government procurement. Canadian companies will be able to bid on opportunities at all levels of the EU government procurement market and vice-versa, though some sectors are restricted. The agreement will only enter into force fully and definitively, however, when all EU Member States have ratified the Agreement.
- Europe Free Trade Association (EFTA) includes Switzerland, Norway, Liechtenstein, Iceland. The European Economic Area (EEA) unites the EU Member States and the three EEA EFTA States (Iceland, Liechtenstein, and Norway) into an Internal Market governed by the same basic rules. These rules aim to enable goods, services, capital, and persons to move freely about the EEA in an open and competitive environment, a concept referred to as the four freedoms. The Agreement on the European Economic Area, which entered into force on 1 January 1994, brings together the EU Member States and the three EEA EFTA State, Iceland, Liechtenstein and Norway, in a single market, referred to as the Internal Market.
EU-Japan FTA: Japan wants to speed up negotiations for an early signing of a FTA with the EU; however,significant differences between the two sides are stalling a deal. For instance, Japan still wants the EU to waive import duties for the automobile sector in a bid to support Japanese autos, auto parts and electric device manufacturers, while the EU insists Tokyo must lower tariffs on agricultural produce and processed foods.
Source: WTO Regional Trade Agreements database, BMI Trade and Investment Risk Report
6. Investment Policy
6.1 Foreign Direct Investment
6.2 Foreign Direct Investment Policy
- Government bodies that are responsible for FDI promotion, licensing and regulations - There are a variety of Polish agencies involved in investment promotion: The Economic Development Ministry has two departments involved in investment promotion and facilitation: the Large Investment Support Department and the International Relations Departments. The Foreign Affairs Ministry promotes Poland’s foreign relations, including economic relations, and along with the Polish Chamber of Commerce, organises missions of Polish firms abroad and hosts foreign trade missions to Poland. Starting February 2017, the Polish Investment and Trade Agency (PAIH) replaced the Polish Information and Foreign Investment Agency (PAIiIZ) as the main institution responsible for promotion and facilitation of foreign investment. The rebranding is connected with the expansion of the scope of the agency's activities. Apart from providing services to investors in the country, PAIH will support Polish investors abroad. The agency will operate as part of the Polish Development Fund, which integrates government development agencies. PAIH will coordinate all operational instruments, such as diplomatic missions, commercial fairs and programs dedicated to specific markets and sectors, as well as promote the Polish economy and attract foreign investors to the country and these services are available to all investors.
- Related law and regulations on foreign investment are well established; however, some restrictions still remain for FDI such as limits on foreign ownership and business activity in core sectors. The Act on the Control of Certain Investments entered into force in 2015 and provides for the screening of acquisitions in energy generation and distribution; petroleum production, processing and distribution; telecommunications; and the manufacturing and trade of explosives, weapons and ammunition.
- Poland’s support for foreign investors is generally sectoral in focus; regional support is provided in the context of sectoral investments. Any company investing in Poland, either foreign or domestic, may apply for assistance from the Polish government. Foreign investors have the potential to access grants and certain incentives. There are 14 Special Economic Zones located throughout Poland on major supply chain routes. The benefits available for locating in these zones include income tax exemption, real estate tax exemption, competitive land prices and close access to high-quality local suppliers.
- Foreign ownership is permitted with the exception of some sectors designated as strategic. Polish law restricts foreign investment in land and real estate. Polish law limits non-EU citizens to 49% ownership of a company's capital shares in the air transport, energy, radio and television broadcasting and airport and seaport operations sectors.
- Licences and concessions for defence production and management of seaports are granted on the basis of national treatment for investors from OECD countries.
- Polish law restricts foreign investment in land and real estate. Since Poland's EU accession, foreign citizens from EU member states and EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland) do not need permission to purchase non-agricultural real estate, or to acquire or receive shares in a company owning non-agricultural real estate in Poland. Land usage types such as technology and industrial parks, business and logistic centers, transport, housing plots, farmland in special economic zones, household gardens and plots up to 2 hectares are exempt from agricultural land purchase restrictions. Citizens from countries other than the EU and EFTA are allowed to purchase an apartment, 0.4 hectares of urban land, or up to one-half hectare of agricultural land with building restrictions and restrictions on eligibility for government support programs. In order to make large commercial real estate purchases, foreign citizens must obtain a permit from the Ministry of Interior (with the consent of the Defense and Agriculture Ministries), pursuant to the Act on Acquisition of Real Estate by Foreigners. Laws to restrict farm land and forest purchases came into force April 30, 2016.
Sources: WTO – Trade Policy Review, The International Trade Administration (ITA), U.S. Department of Commerce
6.3 Free Trade Zones and Investment Incentives
|Free Trade Zone/Incentive Programme||Main Incentives Available|
|There are 14 Special economic zones (SEZs) located throughout Poland on major supply chain routes.|
Source: BMI Reseach – Investment Openness Report
7. Taxation – 2017
- Value added tax: 23%
- Corporate income tax: 19%
Source: PwC Taxes at a Glance 2017, BMI: Taxation Report
7.1 Important Updates to Taxation Information
- Poland has double taxation agreements (DTA) with China (mainland) but there are no separate agreements in place with Hong Kong.
- Poland's tax regime is applied evenly to both resident and non-resident businesses. A corporate entity is considered resident for tax purposes if it has been legally incorporated in Poland or if its place of effective management is located there. Resident companies are subject to income tax on worldwide income, while non-resident entities (branches of foreign companies) are taxed on Poland-sourced income only. A flat rate of 19% is applied to profits and capital gains of both resident and non-resident businesses.
7.2 Business Taxes
|Type of Tax||Tax Rate and Base|
|Corporate Income Tax||19% on taxable earnings. The 15% corporate tax rate applies only to start-up taxpayers and taxpayers whose revenue from sales (including value-added tax due) in the preceding tax year did not exceed the local currency equivalent of EUR1.2mn (small taxpayers).|
|Branch Tax||19% on profits|
|Capital Gains Tax||Treated as taxable income; 19% on profits|
|Withholding Tax (interest, royalties, services)||20% on net earnings|
|Real Estate Tax||5%|
|Value-Added Tax (VAT)||23% on sale of goods, services and imports; 0% applies to exports and supplies of goods within the EU. Reduced rates (applicable to specified goods and services indicated in the VAT Act, such as food, agricultural products and medical equipment).|
8. Foreign Worker Requirements
8.1 Localisation Requirements
Foreigners can only be employed in positions for which no suitable candidate could be found within Poland or in other EU member states. After a five-year period, EU citizens acquire the status of permanent resident if he or she continues to fulfil the respective conditions.
8.2 Obtaining Foreign Worker Permits for Skilled Workers
In order to employ foreign workers from outside the EU, businesses must apply for work permits according to the type of activity the worker will undertake and the length of their stay in Poland. The rules and regulations regarding labour mobility are broadly in line with EU directives, allowing for the free movement of labour within the EU. People from the EU do not need any work permit, but their employer must inform the job office about their being hired.Most non-EU citizens require a work visa and permit in order to work in the country - which generally takes about a month to obtain.The EU Bluecard Regime makes it easier for highly skilled workers outside of the EEA to enter the country. Poland accepts EU Blue Card applications from highly skilled third-country nationals who have an employment contract with a Polish company and possess the required qualifications.
8.3 Visa/Travel Restrictions
The work permit holder must have worked and resided in Poland lawfully for at least two continuous years before becoming eligible to sponsor accompanying family members for residence in Poland. Dependants and family members that are non-EU/EEA must enter Poland as tourists and obtain visas according to their nationality. Businesses that bring workers with family members that are EU/EEA/Swiss nationals can enter Poland with a valid identification document confirming their citizenship. Family members of EU/EEA/Swiss nationals who are not citizens of these countries can enter Poland with a valid travel document and a visa, if required. After a continuous period of residence of five years on Polish territory, an EU/EEA/Swiss national obtains a right of permanent residence. The European Parliament and the Council of the European Union have tightened the Schengen Borders Code regulations on external border crossings. Effective April 7 2017 all persons crossing an external border will undergo thorough checks.
Source: BMI Labour Market Risk
9.1 Sovereign Credit Ratings
|Rating (Outlook)||Rating Date|
|Standard & Poor's||A- (Stable)||15/01/2016|
Source: Moody's, Standard & Poor's, Fitch Ratings
9.2 Competitiveness and Efficiency Indicators
|Ease of Doing Business Index||25/189||24/190||27/190|
|Ease of Paying Taxes Index||58/189||47/190||51/190|
|Logistics Performance Index ||33/160||N/A||N/A|
|Corruption Perception Index||29/176||36/180||N/A|
|IMD World Competitiveness||33/63||38/63||N/A|
Source: World Bank, IMD, Transparency International
9.3 BMI Risk Indices
|Economic Risk Index Rank||36/202|
|Short-Term Economic Risk||66||72.5||71.7|
|Long-Term Economic Risk Score||64.1||72.6||70.2|
|Political Risk Index Rank||27/202|
|Short-Term Economic Risk||76.5||70.8||69.6|
|Long-Term Economic Risk Score||77.9||81.6||81.6|
|Operational Risk Index Rank||30/201|
|Operational Risk Index Score||67.2||69.2||58.7|
Note: NB scores rated from 0-100, with 0= Highest Risk, 100= Lowest Risk
Source: BMI Research
9.4 BMI Political and Economic Risk Indices
BMI Risk Summary - Q2 2018
Policies put in place by the ruling nationalist and populist Law and Justice (PiS) party will continue to damage Poland's reputation as a stable and investor friendly country with strong democratic institutions. PiS' control of both the lower and upper house, its dismantling of Poland's constitutional court, and increasing control of state media, have left government policies without crucial checks and balances. This risks triggering a political crisis and isolating Poland politically on a European Union (EU) level, following the European Commission's decision to launch an infringement proceeding against Warsaw. Furthermore, right-wing PiS policies will continue to increase tensions with the opposition and lead to further anti-government protests.
Poland's long-term economic risk rating reflects the country's solid growth trajectory and steady convergence with Western EU member states. Poland's large domestic market, by regional standards, provides a measure of protection against a volatile global economy and uncertainty regarding eurozone stability and UK's decision to leave the EU. The risk score has fallen slightly due to the PiS government's policies and expansionary fiscal policies in recent years. Nevertheless, real GDP growth will remain strong over our ten year forecast trajectory, public debt is low, and unemployment has fallen sharply to its lowest level since Poland's independence in 1991.
Poland offers an attractive investment destination, benefitting from access to a large domestic and regional consumer market, EU membership and a diversified domestic manufacturing base, all of which are key elements that support healthy growth in trade and investment. The country boasts a well-developed domestic financial market and broad investment incentives. Cross-border trade is facilitated by strong road and rail connections to neighbouring states as well as international maritime connections. There are some key risks to consider, however, including the government's increasingly populist leanings, high exposure to weak demand in key export markets, a shrinking labour pool and uncompetitive utility costs.
Note: Higher score = Lower risk
Sources: BMI Economic, Political Risk Indices, BMI Country Risk summaries
9.5 BMI Operational Risk Index
|Operational Risk||Labour Market Risk||Trade and Investment Risk||Logistics Risk||Crime and Security Risk|
|Central and Eastern Europe Average||58.3||54.2||60.1||61.2||57.9|
|Central and Eastern Europe Position (out of 8)||2||4||2||1||2|
|Emerging Europe Average||55.5||53.8||56.8||56.0||55.2|
|Emerging Europe Position (out of 28)||2||10||3||1||3|
|Global Position (out of 201)||29||56||32||25||26|
Noted: 100 = Lowest risk; 0 = highest risk
Source: BMI Operational Risk Index
|Country||Operational Risk Index||Labour Market Risk Index||Trade and Investment Risk Index||Logistics Risk Index||Crime and Secruity Risk Index|
|West Bank and Gaza||21.5||34||30.2||47.4||36.8|
|Emerging Markets Averages||46.8||48||47.5||45.8||46.1|
|Global Markets Averages||49.8||49.8||50||49.3||49.9|
Note: Higher Score = Lower Risk
Source: BMI Operational Risk Index
10. Hong Kong Connection
10.1 Hong Kong’s Trade with Poland
|Number of Poland residents visiting Hong Kong||29,233||1.72%|
|Number of Poland citizens residing in Hong Kong||N/A||N/A|
Source: Hong Kong Tourism Board, Hong Kong Immigration Department
|Number of European residents visiting Hong Kong||1,909,825||2.51%|
|Number of Emerging Europe residing in Hong Kong||N/A||N/A|
10.2 Commercial Presence in Hong Kong
|Number of EU companies in Hong Kong||N/A||N/A|
|- Regional headquarters||447|
|- Regional offices||717|
|- Local offices||948|
Source: Hong Kong Census & Statistics Department
10.3 Treaties and Agreements between Hong Kong and Poland
- No specific Double Taxation Avoidance Agreements (DTAs) exists between the two, though mainland China has a DTA with Poland covering dividends (10%), royalties (0/10%) and interest (7/10%)
- Investment Promotion and Protection Agreements/Investment Agreements (IPPAs)
Source: Hong Kong Department of Justice
10.4 Chamber of Commerce (or Related Organisations) in Hong Kong
The Poland Hong Kong Chamber of Commerce was establised in 2009 with the aim of supporting individuals and businesses based locally and also promoting trade, networking and investment in Hong Kong.
Address: Level 3A Causeway Corner, 18 Percival street, Causeway Bay, Hong Kong
Source: Directory of Hong Kong Trade and Industrial Organisations, Hong Kong Trade and Industry Department
Polish Consulate General in Hong Kong, Hong Kong
Address: Room 2506, Level 25, Hopewell Centre, 183 Queens Road East, Wanchai, Hong Kong
Hours of Business: Monday to Friday, 9:00 a.m. - 5:00 p.m.
- Please note: Consulate opening hours can vary. Always contact the Consulate before a visit.
Honorary Consul: Miroslaw Adamczyk, Consul General
Tel: (852) 2840 0779
Fax: (852) 2596 0062
Source: Hong Kong Protocol Division of Government Secretariat
10.5 Visa Requirements for Hong Kong Residents
- Visa Application must be completed prior to travel. The Consulate General of the Republic of Poland kindly informs all applicants, that it is obligatory to register the visa application on-line prior visiting the Consulate. The visa process takes 15 calendar days counting from the date of submitting the application. However, the time may vary according to the case nature and number of applications submitted at the same time.
- All the documents must be translated to English language.
- Visa fee: HKD600 (or EUR60) in cash only.
- The Consulate reserves the right to require additional documentation at any time. Generally, HKSAR passport holders do not need a visa to the Schengen area for a stay up to 90 days in any 180-day period. For information on the stay period in the Schengen area, please visit the website of the European Commission: click here.
Source: Visa on Demand