Government

We Support Polish Companies in the Czech Republic

Marcin Warchol is the head of the Polish Investment and Trade Agency (PAIH) office in Prague. He is a Pole with experience in multinational and Czech companies, a graduate of Czech universities and an expert in Czech-Polish economic relations.

You know the Czech business environment very well, as you live in Prague. What is the interest of Czech companies in investing in Poland?
First, I must mention that the main mission of our Prague office of the Polish Investment and Trade Agency is to support Polish companies in the Czech Republic. Therefore, 90% of our activities are focused mainly on the Czech market. As far as investments in Poland are concerned, we are a kind of liaison point for Czech companies. In the event of investment interest in Poland, we connect interested Czech parties with our colleagues directly at the headquarters in Warsaw. I can confirm that Poland has long been on the radar of Czech investors, not only because of its very stable economy with an established macroeconomic position, but also its sound public finances, long-term investment planning strategy, economic stability, and predictability. The unique conditions for operating and starting a business are underpinned by repeatedly demonstrated resilience to economic crises. Direct evidence of investor confi dence is that 94% of investors are willing to reinvest in Poland. Generally speaking, the largest share of all foreign investments in terms of number, value and job creation is registered in electromobility, BSS-SSC and BSS-IT. If we focus on Czech companies, the greatest activity is shown by companies from the real estate investment sector, not only in the construction and rental of warehouses, office buildings or business centres but also in residential real estate. Poland attracts Czech real estate funds mainly due to its large size and, therefore, a greater number of opportunities, value and attractive yields. Another active group are companies involved in healthcare acquisitions. An example is the Czech-Slovak group, which already owns the largest network of private hospitals in Poland and announced further investments in Poland amounting to EUR 200-300 million. We should also not forget about Czech companies from traditional manufacturing sectors such as the automotive and electrical engineering sectors, which, by investing mainly in the Polish border region, respond to the long-term shortage of labour in the Czech Republic.

Today, the investment opportunities cannot do without investment incentives. What incentives does Poland offer?
After more than 20 years of operating the special economic zones, the law was amended in 2018, allowing the use of incentives throughout Poland. According to the new regulations, companies or projects that can apply for incentives are defi ned as follows: the establishment of a new enterprise; increase in the production capacity of an existing plant; diversifi cation of production by introducing products that were not previously produced in the plant; major changes in the production process of an existing plant, etc. The amount of public aid in the form of income tax exemption is determined based on the regional aid map for the period 2022–2027 (representing up to 50% of costs). It applies only to so called “eligible costs”, which, in accordance with the rules on public support for new investments, are:
• Costs of land acquisition; costs of acquiring, extending or upgrading fixed assets (e.g. machinery); costs of acquiring intangible assets (computer software, licences, certifi cates, etc.). The assets acquired must be new, except for assets acquired by SMEs. For large companies, costs of intangible assets are eligible only up to 50% of the total eligible initial investment costs.
• 2-year labour costs of newly recruited staff. Estimated wage costs of job creation after the initial investment, calculated over a two-year period. In addition to the above-mentioned incentives, however, the quality human potential — one of the largest in the EU and signifi cantly exceeds the population of other CEE countries — is also crucial for potential investors. It should also be stressed that Polish employees are very well educated and have experience resulting, among other things, from the long-standing presence of many different foreign companies in Poland.

There are several thousand companies with Polish capital in the Czech Republic. What sectors of the Czech economy are Polish investors interested in?
According to the latest information, there are just over 3,500 companies with Polish capital in the Czech Republic. Most of these companies are active mainly in direct trade and services. Of course, there are significantly fewer Polish companies investing in the Czech Republic, but it should be noted that Poland is a much larger investor in the Czech Republic than the Czech Republic is in Poland. This is a natural effect of the size of the Polish market and thus the growth opportunities of Polish companies. Polish companies are naturally attracted by the geographical location and, last but not least, by the political and business stability and the friendliness that the Czech market offers. Polish investors are interested in the traditional industries: engineering, electrical engineering and petrochemical, which are more likely to be involved in activities related to increased investment or reinvestment. New investments can be observed in the luxury goods sector, in which Poland is traditionally strong, and demand for these goods is growing in the Czech Republic due to the rising standard of living. Polish companies are combining favourable prices and high quality to meet this demand. We can also observe the considerable activity of Polish companies in the financial, food, construction and highly specialised services sectors. The Czech market has been interesting for Polish companies for a long time. Therefore, an increase in their activity can be expected. This fact is mainly positive for the Czech client in terms of a richer offer of goods and services.

Thank you for the interview.

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