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Grants & Incentives Alert KPMG TAX M.MICHNA SP.K. On 23rd of September 2008, the Polish Government adopted new rules of financial support for foreign investments through national cash grants within multi-annual programs. Investors receive grants on the basis of an agreement between the Minister of Economy and businesses.
The financial support will be paid out in annual tranches during a period of up to 5 years, based on progress of commitments undertaken. For projects realized in Special Economic Zones, the maximum level of financial support cannot exceed 15 per cent of the investment costs. If the project is realized outside the borders of a Special Economic Zone, the maximum level of support rises to 30 per cent
Who can receive grants?
Grants are available for foreign entities planning investments, in particular in the following sectors:
- automotive,
- electronics,
- aviation,
- biotechnology,
- telecommunications,
- modern technologies, in particular IT, BPO services and R&D
Financial support will be granted to the foreign investor in the form of a refund of the part of the investment expenditure or the costs of creation of new workplaces.
What criteria should be met in order to receive financial support?
To apply for support by virtue of costs of the investment, the enterprise must be able to realize:
- new investments in production processes, with a minimum total investment value of 1billion PLN which create at least 500 new workplaces,
- undertakings in priority areas with the value at least 160 million PLN and which create at least 50 new workplaces.
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However, in order to apply for support by virtue of creating new workplaces, companies should:
- realize a new investment in production, which creates at least 500 new workplaces and has a minimum total investment value of at least 1 billion PLN,
- realize a new investment in production in priority sectors, that creates at least 250 new workplaces with a minimum investment value of 40 million PLN,
- realize of a new investment with regard to modernisation of services, creating at least 250 new workplaces,
- realize a new investment in the area of research and development, creating at least 35 new workplaces for employees with higher education and a minimum investment value of 3 million PLN.
To determine the level of state aid for investors, the Ministry of the Economy will take into the consideration different criteria, including costs per employee, the number of newly created workplaces, the location of the investment and its character. The maximum financial support for one workplace will be between 3 200 PLN (for an investment employing 250 employees), to 18 700 PLN (for an investment which employs over 1000 employees).
The cash grants from the multiannual support programs are only one of the available sources of the financial support for investments in Poland besides tax reliefs in Special Economic Zones and cash grants from the Structural Funds of the EU (the sources of assistance can be combined).
How we can help?
KPMG advisors from the Grants & Incentives Group have extensive experience in providing effective advice to businesses considering an application for grants from public funds. Identification of the sources of the state aid, successful negotiations with institutions, properly prepared applications and also the fulfilment of numerous formal conditions have a decisive influence on whether grants and different incentives of state aid may be obtained. We would be pleased to present to you further, detailed information about the new rules concerning financial support for your foreign investments and also other undertakings.
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