Incentives for innovations in

Lodz Special Economic Zone

Anna Kądzielewska – Specialist for Investment Development September 2013

LODZ REGION ACCESIBILITY

A1 and A2 motorways junctions, S8 and S14 express roads

THE REGION OF LODZ - HUMAN RESOURCES

The Region of Lodz is where almost 120 000 an excellent academic centre students attend 24 higher universities with more than 90% speaking English, Japanese, French, Russian, Arabic).

40% German. Apart from the most popular languages, students can choose different languages offered by the universities (Chinesse, Annualy, almost graduate from the universities in Lodz ready to enter the labour market.

30 000 young and competent people The number of students in Lodz allows the city to place in Poland in the ranking among among IT faculties and 6th among economic faculties , technical faculties .

6th 4th

SEZs IN POLAND

 

A special economic zone (SEZ) is a designated area in which manufacturing or distribution activities can be conducted on preferential terms The purpose of SEZs is to support regional development

     

Currently, there are 14 SEZs in Poland, each consisting of several subzones Total area of all SEZ – 20 000 hectares approx. 16 000 already occupied SEZ will operate until 2020 Permits to conduct activities in SEZ are issued by the authorities of each SEZ Minimum investment: EUR 100,000 Possibility of cover the land selected by an investor by SEZ

ABOUT LODZ SEZ

Lodz Special Economic Zone

administratively separated part of the territory of Poland, where companies may conduct their business activities on special, preferential terms determined by the Law on SEZ.

Lodz Special Economic Zone

one of the most dynamically developing economic areas in Poland, perfect localisation, tax incentives, rich traditions and full support in investment project implementation.

45

The area of subzones

1290 ha

LODZ SEZ LOCATION

developed area free area

RANGE OF ACTIVITIES IN LODZ SEZ

Production

including food processing

Services

including transport and storage

BPO/ SSC/ IT/ R&D

including accountancy and book keeping, call centre services, technical analyses

BENEFITS

 a total CIT exemption from (corporate income tax) in the amount calculated as

50%

of two-year labour costs of newly hired employees or of investment expenditures  intensity of the aid for SME’s sector: level of State Aid in the European Union

60-70%

- the highest  plots of land prepared for investment projects, available at competitive prices  free assistance in dealing with formalities related to the investment project  assistance in finding business partners (HR, consulting, construction, finances) – Partner Program.

POSSIBILITY OF COVERING AREA WITH SEZ STATUS

Based on the Law on SEZ

it is possible to establish a new SEZ

subzone on a land selected by a company for the purpose of a new investment project. The project has to meet the ministerial criteria in terms of number of new jobs and/or value of an investment.

CONDITIONS FOR ENLARGING THE ZONE I. Citerion referring to the unemployment rate in a district (poviat):

1) in a district (powiat) in which the unemployment rate is equal to or lower than 60% of the national average, the entrepreneur undertakes to create at least 500 new workplaces or to cover qualified investment expenditure in the amount of at least 350 million zlotys; 2) where unemployment is higher than 60% but not higher than the national average creation of at least 250 new jobs or investing at least 155 million zlotys; 3) where unemployment rate is higher than the national average, but not higher than 130% of the national average -creation of at least 200 new workplaces or investment of at least 138 million zlotys; 4) where unemployment rate is higher than 130% of the national average, but not higher than 160% of the average – creation of at least 170 new workplaces or investment of at least 120 million zlotys; 5) where unemployment rate is higher than 160% of the national average, but not higher than 200% of the average – creation of at least 150 new workplaces or invests at least 100 million zlotys; 6) in a district (powiat) in which the unemployment rate is higher than 200% of the national average, but not higher than 250% - creation of at least 100 new workplaces or investment of at least 70 million zlotys;

PREFERENTIAL CONDITIONS FOR ENLARGING THE ZONE II . Criterion referring to innovation

1) activity carried out as a result of the investment shall consist in implementation of new products manufacturing or manufacturing of significantly improved goods not manufactured on the Polish market or rendering services having such features and not being offered within the region or new technological solutions which have not been used so far or have been used on the Polish market for the period no longer than one year; fulfillment of the criterion shall be confirmed by the opinions of at least two scientific entities within the meaning of Article 2 item 9 of the Act of 8 October 2004 on principles of financing science (Journal of Laws of 2008, No. 169, item 1049), and 2) at least 30 new workplaces shall be created in connection with the investment and qualified investment costs in the value of at least 20 million zlotys shall be incurred.

CONDITIONS

 A new investment project of minimium value EUR 100.000

,  The investment and business activity has to be maintained for a period of minimum 5 years (3 years for SMEs*),  Creation of new jobs and maintaining employment level for a period of minimum 5 years (3 years for SMEs*),  Maintenance of the assets for which the investment costs were incurred for a minimum period of at least 5 years after they had been put into the fixed assets evidence (3 years – SMEs*)

* According to EU definition SMEs are companies that employ up to 50-250 workers and their yearly turnover does not exceed EUR 10-50M

POST-INVESTMENT CARE

Lodz SEZ is in constant contact with companies during the whole process of implementing investment project:  cooperation with local authorities;  (gas electricity power, etc. suppliers);  support in contacts and negotiations with infrastructure companies organization of free trainings and conferences;    annual meetings integrating entrepreneurs; promotion of companies; support in contacts with the Ministry of Economy.

LODZ SEZ - RESULTS

30000 25000 20000 15000 10000 5000 0 14756 18983 20844 23248 24450 25925

New workplaces

2007 2008 2009 2010 2011

Investment expenditures in billion EUR *

1 0,5 0 3 2,5 2 1,5 2012 0,97 1,45 1,79 2,05 2,3 2,5 2007 2008 2009 2010 2011 2012

* 1 Euro = 4,00 PLN

IT Pharmeceutics & cosmetics Household appliances / electro - engineering Packaging Others

230 COMPANIES ALREADY TRUSTED US

Architektura i generalne wykonawstwo Budownictwo HR Dostawcy mediów

LODZ SEZ’S BUSINESS PARTNERS

Finanse i consulting

LODZ SEZ’S BUSINESS PARTNERS

Inne

Adaptation and development of 19th century Ludwik Grohman’s factory for office spaces for Lodz SEZ and its investors – year 2011

April 2013 May 2013

Adaptation and development of 19th century Ludwik Grohman’s factory for office spaces for Lodz SEZ and its investors – year 2013

LODZ SPECIAL ECONOMIC ZONE One of the best rated by investors Special Economic Zone in Poland in years 2009-2012

* KPMG Report „Specjalne Strefy Ekonomiczne.” Edition 2012.

LODZ SPECIAL ECONOMIC ZONE

3rd place

in Europe

18th place

among Special Economic Zones worldwide Taking into account Lodz SEZ’s results, incentives, marketing tools and investment potential

* „Financial Times” fDi Global Freezones of the Future 2012/13

LODZ SPECIAL ECONOMIC ZONE

1st place

in Europe

4th place

among Special Economic Zones worldwide* Taking into account Lodz SEZ’s marketing tools used to attract potential investors * The fDi Digital Marketing Awards 2012, Financial Times

WE INVITE YOU TO

Lodz Special Economic Zone Joint Stock Co.

22/24. Tymienieckiego St.

90-349 Lodz, Poland Tel.: Fax.: +48 42 676 27 53, +48 42 676 27 54, +48 42 676 27 55

www.sse.lodz.pl