In this article, we have gathered the most relevant information about Poland’s free economic zones (FEZs) and how they operate. By reading it to the end, you’ll learn:
- The advantages and disadvantages for owners of small and medium-sized businesses.
- What benefits are provided to entrepreneurs and under which conditions.
- The structure of Polish SEZs today and what sets them apart.
- Whether Polish investors have advantages over foreign ones.
If you’ve decided to start a business in Poland, we would be happy to assist you!
- Special Economic Zones (SEZ) in Poland
- Special Economic Zones in Poland
- Map of Free Economic Zones in Poland
- How Are Poland’s Special Economic Zones Regulated?
- Zone Management Companies
- Conditions for Receiving Tax Benefits in SEZs
- What Investments Are Eligible for State Support?
- Quantitative Criteria
- Required Investment Costs Based on the Unemployment Rate in the County
- Qualitative Criteria
- Tax Benefits in SEZs and Available Support
- Map of Polish SEZs with Assistance Intensity
Special Economic Zones (SEZ) in Poland
A special economic zone (SEZ), also known as a free or special economic zone, is a designated area within a country with a special legal status compared to the rest of the country.
The uniqueness of this status is expressed in preferential conditions for conducting business, designed to stimulate the socio-economic development of the country, certain regions, or industries. Tax incentives encourage investment, increased exports, and the creation of new jobs.
Special Economic Zones in Poland
Every year, on May 31, the Council of Ministers is required by law to submit a report on the activity of these zones to the Sejm (Polish parliament). Since their inception, these zones have attracted investments totaling approximately 112 billion PLN. The oldest of these, Euro-Park Mielec, was founded in 1995.
Currently, there are 14 SEZs in Poland. Each consists of several dozen subzones located across the country. Their infrastructure is well-developed, making them highly attractive to both Polish and foreign investors. Polish and foreign investors receive tax benefits in the SEZs under the same conditions, helping Poland create an investment-friendly climate.
Since June 2018, with the enactment of the Investment Support Act, all of Poland has become a special economic zone. In addition to other benefits, this means partial exemption from income tax regardless of the investment location, provided certain criteria are met. Some SEZs remain operational until 2027 (until December 31, 2026).
Map of Free Economic Zones in Poland
How Are Poland’s Special Economic Zones Regulated?
Zone Management Companies
According to the law, the administrator of a SEZ must be either a joint-stock company or a limited liability company in which the state treasury or local government holds a majority stake at general meetings or shareholders’ meetings.
Out of the 14 SEZs, the state treasury controls 11. Two of them (Euro-Park Mielec and TSEZ Euro-Park Wisłosan) are managed by the Industrial Development Agency, while another, Słupsk, is managed by the Pomeranian Regional Development Agency, with control held by the city of Słupsk and the Pomeranian Voivodeship.
The primary tasks of the managers of companies overseeing the SEZs are:
- Organizing negotiations and tenders for issuing work permits.
- Building and developing infrastructure.
- Selling or facilitating land sales.
- Acting as intermediaries between investors and media providers, as well as local authorities.
- Post-investment care and monitoring compliance with the licenses issued.
The law governing the operation of special zones has been harmonized with European Union legislation. The state support offered in these zones follows the rules for regional investment aid in the EU.
Conditions for Receiving Tax Benefits in SEZs
The first and mandatory condition for using state assistance is obtaining an operational permit issued by the zone management company on behalf of the Ministry of Economic Affairs. The permit specifies:
- The type of activity.
- The minimum employment level.
- The minimum level of investment.
Tax exemption applies only to income from the activities specified in the permit.
The minimum investment amount in Polish SEZs is 100,000 PLN. The entrepreneur must contribute at least 25% of the total investment cost with their own funds.
Not every business can obtain a permit to operate in Poland’s free economic zones! It is not granted for:
- Manufacturing explosive substances.
- Manufacturing tobacco products.
- Processing motor fuel.
- Manufacturing, bottling, and processing alcoholic beverages (including alcohol for purposes other than bio-component production).
- Operating gaming centers.
- Services related to wastewater disposal and treatment.
What Investments Are Eligible for State Support?
To receive a decision on assistance, the investor must meet both qualitative and quantitative criteria, with the investor required to meet a significant portion (60%) of the criteria.
Quantitative Criteria
To participate in the support program and enjoy SEZ benefits, investments must be associated with relatively high qualified costs, depending on the entrepreneur’s status (small/medium/large) and the unemployment rate in the district. Poland is divided into voivodeships, voivodeships into counties, and counties into municipalities. Below are the basic requirements for large entrepreneurs — they are reduced for small and medium-sized enterprises and for certain types of investments.
Required Investment Costs Based on the Unemployment Rate in the County
The unemployment rate is assessed annually based on the announcement of the President of the Central Statistical Office.
The required investment costs are reduced:
- For investments in modern business services, research and development (R&D) — by 95%.
- For microenterprises — by 98%.
- For small enterprises — by 95%.
- For medium enterprises — by 80%.
Qualitative Criteria
Qualitative criteria vary based on whether the entrepreneur intends to invest in the industrial production sector (a) or the services sector (b).
Criteria for Sustainable Economic Development:
- Investment in projects that support sectors (a) or service projects (b) that align with the country’s current development policy where Poland can gain a competitive advantage.
- Sales levels outside Poland.
- (a) Belonging to a national key cluster.
- (b) Establishing a modern business service center with a range beyond Poland.
- Conducting scientific and research and experimental development.
- Micro, small, or medium business status.
Criteria for Sustainable Social Development:
- (a) Creating specialized jobs for activities covered by new investments offering stable employment.
- (b) Creating well-paid jobs and providing stable employment.
- Conducting business with minimal negative environmental impact.
- Investment in regions with high unemployment or in one of the 122 medium-sized cities listed in the relevant regulations.
- Assisting with education and professional qualification acquisition, collaboration with sector-specific schools.
- Taking measures in worker care.
An applicant for support does not need to fulfill all the above conditions simultaneously! Meeting qualitative criteria occurs upon receiving 60% of the available points, i.e., 6 out of 10.
Tax Benefits in SEZs and Available Support
The main incentive for investors placing their projects in special zones is exemption from income tax (CIT or PIT, depending on the business form). State assistance is a form of reimbursement for costs related to new investment projects. Therefore, the amount of capital invested (or labor costs for newly hired workers) associated with such a project is the basis for calculating the tax deductions owed to the entrepreneur.
State support will be provided for a fixed period: 10, 12, or 15 years, depending on the level of government assistance in the given voivodeship. The validity period of the decision also determines the duration during which you can take advantage of tax exemptions in SEZs.
The amount of tax that an entrepreneur will not need to pay is calculated as the product of the eligible costs and the intensity of assistance provided for the voivodeship where investments will occur.
Map of Polish SEZs with Assistance Intensity
Exemption from income tax (CIT or PIT, depending on the form of entrepreneurship) ranging from 15% to 50% of qualified financial expenses or two-year labor costs for new employees.
Availability of an attractive, developed area with all necessary infrastructure.
The possibility of purchasing or renting already existing real estate in Polish SEZs. In some zones, it is possible to implement projects in the BTS system (built to individual orders) and rent them out later.
The opportunity to use other investment incentives, including:
- Exemption from property tax (often offered to new investors by municipalities),
- Investment grants from the government,
- Subsidies from county employment offices,
- Participation in EU funds.
(The total support level from all sources cannot exceed 30-70% of capital costs!)
Administrative support from the zone management companies on legal and organizational matters related to implementing investments (media, local authorities, etc.) and other post-investment support.
Disadvantages
Obligations to incur certain expenses and operate the business for 3 or 5 years, which may be difficult in the event of a sudden deterioration in market conditions or a change in the company’s strategy.
Regional (administrative) fee to cover the administrative expenses of the zone management company incurred throughout the term of the respective license.
Additional reporting obligations and a greater number of control measures related to compliance with permit conditions and proper use of government assistance, implemented by fiscal authorities. (If a company operates both within and outside the special zone, separate accounting must be maintained).
Real estate prices in special zones may be higher than prices for similar properties outside of them.
Limited availability of office space that can be used for quick launch (e.g., in modern financial service centers).
Due to the limited operation period of special zones — until the end of 2026, companies that started late will not be able to fully use the tax benefits in SEZs they were entitled to.
Restrictions on the types of business activities.
If a company chooses a site to be included in the SEZ, it must wait for a resolution from the Council of Ministers to change the boundaries of the area, which may delay the implementation of the financial project.
Poland’s Free Economic Zones as a Tool for Stimulating Investment
Despite the aforementioned disadvantages of working in Polish SEZs, over the past two decades, they have made a significant contribution to the development of the Polish economy and attracted a number of financial investments. This was made possible by advantages such as:
- Improved infrastructure with the most promising investment zones. (OEZs were typically created in highly industrialized regions, often based on infrastructure left by traditional, retreating industries).
- Availability of qualified labor (especially in regions with strong industrial traditions).
- Simpler procedures (friendly attitude towards investors from the outset + the significant role of zone councils and platforms for cooperation with local authorities).
- Developed investment marketing.
