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Increasing number of foreign enterprises
( 01 / March / 2005 )
The latest data released by the Central Statistical Office (GUS) indicate that there is an increasing number of companies with foreign ownership in Poland. It is the effect of the EU accession as well as low corporate tax (CIT).
According to the REGON database (where all legal entities are registered) published by GUS, at the end of 2004 there were 51,500 entities with a share of foreign ownership in Poland. This marks an increase of 1,500 as compared to June 2004.
Foreign entities choose limited liability company as a form of commencing their business activity in Poland. At the end of 2004 there were 2,440 new entities of this kind, while the number of newly established joint-stock companies amounted to 34.
The reason for setting up limited liability companies is related to financial apects. In order to establish a limited liability company, an entrepreneur needs to secure a minimum capital of PLN 50,000. In order to set up a joint-stock company one needs 10 times more. According to the economists, small and medium foreign enterprises (e.g. from Germany) stand behind newly established companies in Poland.
“Investments of small and medium enterprises are increasing,” Piotr Bujak, economist with BZ WBK, told Parkiet economic daily, ”Before the EU accession they were discouraged by bureaucratic impediments at the border. Now the problem does not exist anymore”.
Another reason for establishing companies in Poland is low corporate tax rate, which amounts to only 19%. E.g. in Germany the figure stands at 25%, or even, as it appears from the calculations of „Financial Times Deutschland" effective tax rate amounts to 38.5%.
According to analysts other incentives for foreign SMEs are GDP growth and strong zloty. In addition, Poland has become very competitive as compared to the "old" member states of the EU. Moreover, other costs of business activities are lower than for example in Germany.