Legal framework for the establishment of special economic zones

The establishment of special economic zones in Poland is regulated by the law of 20 October 1994 (Dziennik Ustaw 1996 no 123, item 600, no 106, item 496). The purpose of special economic zones is to accelerate development in a certain region. The task is to be achieved through the development of specific spheres of business activity, developing and taking advantage of new technological solutions in the national economy, development of export, increasing the competitiveness of manufactured goods and rendered services, management of the existing post-industrial property and economic infrastructure, creation of new workplaces and management of unused natural resources according to the rules of ecological balance. Zones are to be established by decree of the Council of Ministers.

The zone is managed by the management specified in the decree. The role of the management may be performed only by a joint-stock company or a limited liability company, regarding which the State Treasury possesses the majority of votes which may be cast at the general meeting or meetings of partners. The State Treasury, represented by the Minister of State Treasury, is also entitled to appoint and recall the majority of the management and supervisory board members. The zone management's task is to conduct activities aimed at development of business activity in the zone.

Business entities may be granted tax allowances in the zone on the grounds of permission issued for a limited period of time by the Minister of Economy. Entities entitled to such allowances are chosen through invitation to an unlimited tender or negotiations. However, the Minister of the Economy may renounce that way of using permissions in special cases justified by an important economy's interest. The permission may expire or be withdrawn in circumstances specified in the decree. By way of decree, the Minister of Economy may charge the current zone manager with the task of issuing permissions for undertaking economic activities in the zone.

The decree on the establishment of a special economic zone may assign the matter and scope of activity which may be conducted in the zone without applying for special permission. Business entities that wish to conduct other activities may apply for permission. The following activities may be undertaken without special permissions in existing special economic zones:

• installation, repair and maintenance of machinery, appliances and other things used for conducting economic activity in the zone;
• services in the realm of commerce;
• repairing of motor vehicles, motorcycles, household and personal use articles;
• hotel and restaurant services;
• transportation and storage services;
• financial brokerage services;
• services connected with real estate;
• services in the realm of public administration or national defence;
• legally guaranteed social welfare, municipal services and other social and personal services rendered in family households.

Activity forbidden in the special economic zones

The decree also sets the scope of activities which may not be undertaken in the zone. The following activities are excluded in existing zones:

• production of explosives;
• production, processing and bottling of spirits and alcoholic beverages;
• production and processing of motor fuels or tobacco;
• running of gaming houses;
• any activity causing the emission of effluents to the atmosphere that results in exceeding the permissible concentrations.

Tax allowances, preferences and facilities in special economic zones

Economic entities acting in the zone may bank on tax allowances and preferences. Incomes of economic entities entitled to the exemption from income tax may be totally exempt from income tax in the period equal to half of that for which the zone has been established. After that period, economic entities may be granted 50 per cent exemption from income tax. Entities which have no rights to such allowances are entitled to preferences in the form of the possibility of recognising investment expenditures connected directly to economic activity conducted in the zone as revenue earning costs or the possibility of applying increased amortisation rates. Such preferences may be employed alternatively. Moreover, economic entities acting in the special economic zone are exempt from local fees and taxes (eg, tax on land).

An additional facility for potential investors is the fact that the chief of the regional administration department may entrust the right to issue administrative decisions relating to licences for building in the zone, to the zone management. Moreover, the procedure for issuing permissions for property acquisition by foreigners has been accelerated by the Ministry of Internal Affairs and Administration, reducing the waiting period to one month (or less) starting from the day in which the interested party made an application.