WHY DOES IT PAY TO INVEST IN POLAND ?

WHY POLAND ?

Poland's entry into the European Union on 1 May 2004 was the culmination of wide-ranging political and economic transformation initiated in 1989. As a part of the Single European Market, Poland is still undergoing economic and social changes. With economic growth at 5.7% (2004 est.), a young, well-educated and ambitious labour force, location at the very heart of the continent and low corporate income tax (19%), Poland has become an exciting place for investors from around the world.

Because of its 38,6 million market and cheap and skilled labour force Poland is a very attractive place to invest in but not only for that reasons. Poland has prepared a number of economical incentives for foreign business to make it one of the most interesting and beneficial places in Europe to invest in.

Investors who benefit from the investment grants are eligible also for other forms of support, such as: tax relieves in Special Economic Zones, local tax relieves etc., however the total value of grants and other kind of public aid offered to the investor cannot exceed 50% of the investment outlays.

Poland is also one of the youngest countries on the continent - 35% of Poles are under 25 years of age.

The average price of 1 m2 of a new apartment on a real estate market in 2002 was 391,5 USD. The highest prices (691 USD) you can find in the central Poland with Warsaw as a capital where prices average between 750USD and 1250USD/m2. The cheapest apartment can be found in the south (with a strong mining industry and Katowice as a capital) priced at 256USD/m2.

Polish labour force is still very cheap. It costs just $3.0 an hour (including social security contributions) to employ a skilled manufacturing worker in Poland.

In 2002 the average gross salary in Poland was estimated at 633 USD per month. The lowest guaranteed salary in Poland (from 01.01.2003) is 280 USD.

PURCHASE OF REAL ESTATE BY FOREIGNERS

Purchasing property by foreigners is governed by the provisions of the Act of 24 March 1920 on Purchase of Real Estate by Foreigners with further amendments. The general rule is that foreigners require a permit from the Minister of Internal Affairs and Administration to buy real estate.

The following real estates you may buy without the obligation to obtain a permit

• Purchase of independent residential premises
• Purchase by a controlled corporate entity, for its statutory purposes, of undeveloped real estate in urban areas if their total area in the entire country does not exceed 4,000 m²
• Purchase of real estate by a foreigner who has been residing in Poland for at least five years from the issuance of a permanent residence permit
• Purchase by a foreigner whose spouse is a Polish national and who has resided in Poland for at least two years from the issuance of a permanent residence permit, of real estate that will become the joint property of both spouses
• Purchase of real estate by a foreigner if, on the day of purchase, the foreigner is entitled to statutory succession after the assignor of the real estate, provided that the assignor was its legal owner or perpetual usufructuary for at least five years
• Purchase of real estate by a foreign bank, which is a mortgagee, after an ineffective auction under enforcement proceedings

Cases where a permit is required

A permit is required in each case of real estate purchase, i.e. acquisition of ownership title or perpetual usufruct right to real estate on the basis of a legal transaction.
The following require a permit:

• Purchase of real estate
• Purchase or taking up of shares in a commercial company which has a registered place of business in the Republic of Poland and is the legal owner or perpetual usufructuary of the real estate

European Economic Area (EEA) nationals and entrepreneurs must obtain a permit in the following cases:

• To purchase agricultural and forest land - for 12 years after Poland became a member of the EU (i.e. until 2 May 2016),
• To purchase a second home (i.e. the real estate which is intended to be developed for residential or recreational purposes and which will not be used by a foreigner as the habitual residence) - for five years after Poland became a member of the EU (i.e. until 1 May 2009).

However, EEA foreigners will not be required to obtain a permit during those transitory periods in the following cases:

Ø to purchase agricultural land situated in:

• the eight western and northern provinces – after the end of the seven year period since the execution of a lease contract (date of execution must be certified), if during that period they have pursued farming in person on the land concerned and have legally resided in Poland,
• the eight central ane eastern provinces – after the end of the three year period since the execution of a lease contract (date of execution must be certified), if during that period they have pursued farming in person on the land concerned and have legally resided in Poland

Ø to purchase a second home:

• if the purchaser has legally and continuously resided in Poland for at least four years, or
• for the purpose of pursuing business activities in the form of tourist services

  Real and Estates Fair

  We have partaken in the Real and Estates Fair in Warsaw, on 1-2nd April, 2006: Estates Fair, Warsaw 1-2 April, 2006

http://www.windykator.st.pl/index_eng.htm
10 reasons why it is worth investing in Poland
INVESTING IN PROPERTY
1. Poland has the biggest apartment market among the new EU members.

2. The price level in the most expensive town - Warsaw (average ca.
1100 EUR per sq meter) is still low in comparison with other EU states.

3. Poland is going to face systematic increases in apartment prices –
only last year the prices increased by over 12%. A systematic increase
in prices by ca. 10% annually is foreseen.

4. Migration to the biggest towns. Large discrepancies between
salaries in big towns (particularly Warsaw) and the rest of the
country result in permanent strong inflow of population (new clients)
to these towns. The surveys show that 60% of the purchasers of new
apartments in Warsaw are persons who were not born there. Other
promising markets are Kraków, Wrocław, Tricity (Gdańsk, Gdynia, Sopot)
and Poznań.

5. Low quality of apartments built under the socialist regime. In
15-20 years first demolitions will take place. At the same time, the
purchasers prefer buying newly built apartments. This ensures
permanent demand for the currently built apartments for many years.

6. Strong, systematic increase in GDP, on average by ca. 5% during the
last decade.

7. Systematic increase in real salaries results in increase in
purchase power of the Poles.

8. The perspective of joining the EURO zone increases confidence in
the Polish currency which remains stable and even gains in strength in
relation to Euro. At the same time Poland is one of few states that
did not experience currency crisis.

9. Huge potential of the apartment market. The level of apartment
loans in relation to GDP in Poland does not exceed 5% of GDP as
compared to almost 50% in the EU.

10. Unlike purchase of other property, purchase of apartments by the
foreigners is free of any permissions.

Sample offers in Warsaw:
among the chosen offers (127):
total price: 129 360 PLN - 615 330 PLN
sqm price: 4 700 PLN - 5 300 PLN
area: 26,40 m2 - 116,10 m2
number of rooms: 1 - 5
completion: October 2005
among the chosen offers (110):
total price: 188 650 PLN - 674 160 PLN
sqm price: 4 900 PLN - 5 300 PLN
area: 38,50 m2 - 127,20 m2
number of rooms: 1 - 5
completion: July 2006
luxury apartment: 3 room, 88,41 m2
storeys: ground floor
total price: 530 460 PLN
price per sqm: 6 000 PLN
mortgage rate from: 2 322 PLN
completion: April 2005

luxury apartment: 1 room, 39,18 m2
storeys:  6
total price: 311 454 PLN
price per sqm: 6 980 PLN
mortgage rate from: 1 364 PLN
completion: December 2005

uxury apartment: 2 room, 52,10 m2
storeys:  2, 4
total price: 271 908 PLN
price per sqm: 5 196 PLN
mortgage rate from: 1 190 PLN
completion: 4th quarter 2006

see  also MARKET OF REAL ESTATES IN POLAND  at
http://www.windykator.st.pl/index_eng.htm (English version, bottom of
the site)