Support provided to entrepreneurs in special economic zones versus the act on rules of supporting new investments

Adding date: 03.04.2018 | Poland

Special Economic Zones (SEZ [SSE in Polish]) have existed in Poland since 1994. They came into being pursuant to the Act on Special Economic Zones of 20 October 1994 as administratively separated regions of the country in which investors may run their businesses on preferential conditions. 

SEZs came into existence to boost the business development of some selected country regions. In Poland, there are now 14 SEZs with their geographic locations in: Kamienna Góra, Katowice, Kostrzyń-Słubice, Kraków, Legnica, Łódź, Mielec, Pomorze, Słupsk, Starachowice, Suwałki, Tarnobrzeg, Wałbrzych and Warmia-Mazury. SEZs are present in all provinces. Time of SEZs operation in their existing form has been extended until to 31 December 2026. 

Entrepreneurs run their businesses in SEZs on preferential conditions based on special permissions. Such permissions are issued as administrative decisions by entities administering a given zone under the authority of the minister having competence over for economic matters. 

Basic privileges entrepreneurs in SEZs may enjoy, among any other incentives encouraging the investment in such zones, are: tax exemptions (CIT or PIT) and real property tax exemptions (in some communes).  

To get and continue to have an aid the entrepreneur is obliged to: 

  • run a business in the zone on a continuous basis,
  • keep the ownership of asset components involving investment expenditure,
  • keep newly established job positions,

for a minimum of 5 years, and in case of small and medium-sized enterprises for a minimum of 3 years. Significantly, if the permission for operation in the zone expires, or if it is withdrawn, an entrepreneur loses the entitlement to any tax exemptions and has an obligation to pay all public liabilities for the entire period in which such an entrepreneur has enjoyed tax exemptions.


Income tax exemption is the major advantage entrepreneurs consider when deciding about making investments in a given area and which is a part of investments in SEZs.

Tax exemption becomes effective as of the month in which first expenses on investments have been made in the period beginning when the permission is obtained until the date on which permissible regional aid has been exhausted.

Regional investment aid is given to entrepreneurs as tax exemptions pursuant to art. 17 sec. 1 point 34 of CIT Act and art. 21 sec. 1 point 63a of PIT Act, and involves income earned in business run in the area of Special Economic Zone based on the permission given.

Public aid given to entrepreneurs as tax exemptions is a regional investment aid given due to:

  • costs of a new investment, calculated as a product of the aid maximum intensity in a given area and costs of investment qualifying for such an aid, or 
  • creation of jobs, calculated as a product of the aid maximum intensity in a given area and 2-year costs of newly employed employees, including costs of their gross pays, increased by compulsory contributions covered by the entrepreneur as of the date on which such employees are employed. 

Public aid for a new investment is conditional upon the participation of the entrepreneur's own funds, which are not public funds and which amount to at least 25% of the investment qualified costs.

Pursuant to the Regulation of the Minister Council of 10 December 2008 with regard to public aid given to entrepreneurs, whose business operation is based on the permission to run a business in the areas of Special Economic Zones, a new investment is regarded as the investment in fixed assets and intangible fixed assets involving either the establishment of a new enterprise, or extension of the existing enterprise, or diversification of the enterprise production through the introduction of new, additional products, or through a fundamental change in the entire production process of the existing enterprise. Also, the purchase of an enterprise, which is in liquidation or would be liquidated but for its purchase, is regarded as a new investment. Then, newly employed employees are those who are employed after the permission in relation to the new investment has been obtained, however, not later than within 3 years following the investment termination. The number of employees is the number of full-time employees employed during the year based on employment contracts, part-time and seasonal employees.  

Qualified expenses that are required to be incurred in order to obtain public aid are specified in the Regulation. Costs of the entrepreneur's investment less the value added tax (VAT) and excise liabilities are regarded as qualified expenses, if they are incurred in the Zone area in compliance with the permission given. They include, among other, the land or perpetual usufruct right purchase price, the acquisition price of fixed assets or costs of manufacturing them, provided that they can be considered a part of the taxpayer's assets under separate laws, costs of extension or modernization of existing fixed assets, acquisition price of intangible assets involving a technology transfer through the acquisition of rights to patents, licences, know-how or non-patented technical know-how, costs related to land or buildings tenancy or lease, acquisition price of assets other than lands and building constructions subject to tenancy or lease. A minimum amount of investment costs is EUR 100,000.

Now any business activity in Special Economic Zone does not impose on an entrepreneur any territorial restrictions as to do business in Special Economic Zone only. Each entrepreneur may run their businesses outside the Zone, however, any income earned in the business run outside the Zone, or exceeding the limits of the permission obtained will be subject to taxation on general rules. This also regards any business activity, which is excluded from SEZ permissions, e.g. fuel production or gambling centres.  


It is required that the resolution of respective local authorities be adopted to exempt entrepreneurs running their businesses in SEZs from taxes. The permission can be obtained particularly on condition that investment expenditures are made and new jobs created. Furthermore, a respective revenue authority has to be notified about an intention to use public aid funds plus the investment must be continued in the region for 5 or 3 years, respectively. The permission to be exempt from a tax depends on the resolution adopted by local authorities each time and on regulations effective in a given commune.


However, in the next few weeks a draft act on rules of supporting new investments will be submitted to Parliament and it will provide for new rules of supporting entrepreneurs in their new investments. The act on supporting entrepreneurs as planned is to replace the existing act on Special Economic Zones. New regulations will be in effect together with the present ones on SEZs. They will finally replace them after 2026 when SEZs stop existing. Zone permissions given on conditions being in effect so far can be given until the date on which secondary legislation of the new act becomes effective, i.e. regulations on providing public aid under new rules and in respect to the areas for which responsibility is taken by particular authorities administering such areas (present Administrators of SEZs). 

A major change in providing such a support is the removal of territorial restrictions. As it appears from the explanation to the draft act, the purpose of the new act is to ensure stable and uniform investment conditions. Pursuant to the new act any such support will be given to entrepreneurs making new investments when establishing a new plant, increasing production capacities, or a changing the production process of the plant already existing.  

Such a support will be given to entrepreneurs whose investments will satisfy the project qualitative and quantitative criteria and will involve qualified costs. It will be competence of Minister of Economy to issue the support decision. The support for new investments will be given to entrepreneurs in the form of income tax exemption, or in the form of specific services rendered to investing entrepreneurs. Such a support decision will be issued to a given entrepreneurs for not less than 10 years and not longer than 15 years. 

In its regulation, the Council of Ministers will provide what businesses will not be eligible for aid as well as what qualitative and quantitative criteria will be, i.e. requirements of compliance with medium-term investment strategy and a minimum investment size as corresponding to an unemployment rate in the county where a new investment will be made. The draft act also provides for Records of Investment Support with an intention to support economic and regional policy by the area administering authorities.

New regulations provide for the exclusion of an entitlement to exemption where an income from any business subject to an aid will result from actions aimed at getting income tax exemption mainly, or where any such actions are not of real nature, also in the situation where a taxpayer enjoying such an exemption takes legal steps, including any steps in businesses, which are not subject to exemptions, with a major intention to avoid taxation. 

New rules of providing entrepreneurs with support are aimed at encouraging investments. However, it is only after the act and secondary legislation are submitted in their final form, we will be able to see whether entrepreneurs shall be actually given optimal investment conditions.

Author: Magdalena Grzywaczewska-Łuczkowska, Legal Counsel in the Law Firm "Chudzik i Wspólnicy Radcowie Prawni" sp.p. 

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