Poland - a country of opportunities for Korean investors
South Korea is one of the largest non-European investors in Poland. Indeed, over 260 enterprises with Korean capital already operate between Oder and Vistula - and Korea’s involvement in Poland is growing. On the 30th anniversary of establishing diplomatic relations between the two countries, the Polish Agency of Trade and Investment (PAIH) and JP Weber prepared a report Poland Land of Opportunities, presenting the current investment activity of South Korean companies in Poland, as well as identifying the most promising sectors for Korean investors. The première of the report took place on May 24 in Seoul during the Polish and Korea business forum.
Report_Poland - Land of Opportunities
South Korean enterprises have been operating in Poland practically since the moment of establishing diplomatic relations. The scale of their involvement in the Polish economy is impressive. - South Korea is the third largest foreign investor from outside the European Union after the USA and Japan. PAIH has already served 53 projects from this country – says Krzysztof Senger, vice president of the Polish Agency of Trade and Investment, who co-authored the report and who organises the investment forum in Korea. As Senger points out, until recently, Korean investors in Poland had been associated mainly with the manufacture of electronic and household appliances. However, for several months, together with Polish engineers, they have been writing a new chapter in the history of automotive and capital venture.
- Thanks to the Koreans and the electromobility cluster emerging around the LG Chem factory, a revolutionary technological change is taking place in the Polish automotive industry. Poland is becoming an important manufacturing centre of electric cars in Europe – says Senger. In recent years, the discussion about the future of transport and its impact on the environment has prompted global automotive manufacturers to develop zero-emission drives. Korea, as an important manufacturer of solutions for electric cars, has bet on Poland. Now Poland is becoming the European production centre of green automotive components, manufacturing batteries and other elements for innovative electric vehicles.
The authors of the report emphasise that interest in Poland among Korean companies is, above all, connected with the high competences of Polish technical staff, the access to top-quality sub-suppliers and because of the over 160 innovation centres throughout the country. The attractive offer of incentives is of great importance too. The Korean economy is the most innovative in the world. This translates into the specifics of investment projects carried out by enterprises from this country. The Polish system of investment incentives meets them. It provides innovators with some of the highest tax exemptions among OECD countries, and offers a higher return on investment than the EU average - Senger explains.
- A strong incentive is the Polish Investment Zone with its chance to get exemption from CIT for a period of 10 to 15 years. This new solution allows investors to operate wherever they wish – practically throughout Poland, and does not force them to be limited to areas located in the resources of economic zones. An important impulse are the still available EU funds supporting R&D activities, i.e. attracting investments with a high degree of technological advancement and opportunities for further development of know-how in Poland. This is accompanied by instruments such as the exemption related to R&D, the Innovation Box, as well as the system of incentives at the local and government level for investments of significant importance for the economy. These are key arguments, apart from the availability of excellent engineering staff and a significant improvement of rail and road infrastructure, to convince the Korean investors to locate their factories in Poland - says Marcin Dudarski from JP Weber.
PAIH and JP Weber, cooperating with Korean investors on a daily basis, expect an influx of further investments from this country. In the international ranking of the most attractive locations for South Korean business, Poland is in the 14th place. Companies from this country are active in 11 Polish provinces. Moreover, in PAIH, as of this moment, 11 projects from South Korea in the electromobility segment are being processed. The authors of the report, however, see a growing interest in Poland among South Korean companies from other sectors. In order to take advantage of this potential, the PAIH Trade Office in Seoul organised a Polish-Korean Business Forum on May 24 in Seoul. - We intend to offer South Korean entrepreneurs cooperation in infrastructure projects, such as the Central Communication Port, or strengthen their presence on the commercial real estate market and in food production, and to look at the Polish modern services sector, including ICT - explains Krzysztof Senger.
The significance of the event for bilateral cooperation is evidenced by the presence of a large delegation of Polish institutions and companies. This was headed by Deputy Minister of Enterprise and Trade, Tadeusz Kościński. In order to commence investments in Poland, Koreans in Seoul are being persuaded by, among others, the Polish Agency of Trade and Investment, Industrial Development Agency (ARP), Katowice Special Economic Zone, representatives of the Central Communication Port, companies from the commercial real estate sector (such as Capital Park and CBRE), and representatives of Korean companies already present in Poland.
The analysis of the PAIH Trade Office in Seoul shows that Korean companies may be interested in both management and general contracting in regard to the Central Communication Port due to their experience in participating in similar projects in Iraq, Kuwait and Turkey. As it is, South Korean companies from the commercial real estate segment are already active in our country. At the end of 2018, an investment fund from this country has taken over several office buildings in Warsaw. Moreover, three branches of Korean banks – Industrial Bank of Korea, Shinhan Bank and Woori – already operate in Poland.
Korean companies will learn about how to take advantage of Poland's investment potential from the report Poland Land of Opportunities, electromobility and other sectors in the heart of Europe, whose première took place at the Business Forum in Seoul. Future investors will find in it, information on the economic, as well as formal and legal conditions for conducting business in Poland, and also the in-place system of investment incentives or support institutions and the sectors with the highest potential for successful investment in our country. The signing of up to three bilateral agreements between PAIH and the Korean sister entity, KOTRA, the government import agency KOIMA, and the Korean industry federation (FKI) will serve to strengthen cooperation during the jubilee year.