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PAIiIZ: more to be done to improve investment climate


2010-12-05



Although Poland remains one of the most attractive destinations for foreign direct investment (FDI) in the region, there are still a number of barriers in the country’s legal and administrative environment that are an obstacle to greater investor activity, according to surveys commissioned by the Polish Information and Foreign Investment Agency (PAIiIZ) whose findings were discussed at a recent conference in Warsaw.

First, investors complain about lack of transparency in the workings of public authorities; long procedures for obtaining residence and work permits; and lack of local zoning plans, which makes the obtaining of building permits more time-consuming. Furthermore, although the country has created a fairly attractive system of incentives for investors, there is considerable room for improvement here, in several areas. To begin with, the laws pertaining to Special Economic Zones should permit easier changes to declared investment parameters; tax regulations applying to investors in the zones are too complex; the rules for expanding their area too rigid; and investors are practically unable to utilise their tax exemptions fully until 2020 (see the news item 'Poland to lobby Brussels for extending lifetime of Special Economic Zones'). With respect to government grants, again procedures are seen as too long, the level of aid too low, and certain restrictions, such as those denying support to investments in large cities with low unemployment rates, or prohibiting the combination of government grants with other forms of regional aid (EU grants, CIT exemption), are considered excessive. Finally, the awarding of EU grants from the Innovative Economy Operational Programme is also marred by long and unstable procedures and lack of a general schedule of application rounds. Besides these weaknesses in the legal/regulatory environment, infrastructure is also seen as requiring improvements.

Nevertheless, the country has a lot to be said for it and is clearly worth recommending as an investment location, according to most investors. Its key strengths are seen to be good availability of skilled workers, big market, macroeconomic stability amid the global downturn, and strong position in the EU.



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PMR is a British-American company providing market information, advice and services to international businesses interested in Central and Eastern Europe as well as other emerging markets. PMR key areas of operation include business publications (through PMR Publications), consultancy (through PMR Consulting) and market research (through PMR Research). With over fourteen years of experience, high international standards in projects and publications, highly skilled multilingual staff and a wide network of co-operating research companies and market experts, PMR is one of the largest companies of its type in the region.