Polish Investment Zone – conditions, procedure and practical aspects
Support for new investments in Poland
The Polish Investment Zone (PSI) is a support system that allows entrepreneurs to obtain income tax exemption (CIT or PIT) on income from new investments in Poland. This relief was introduced by the Act of May 10, 2018, on Supporting New Investments, replacing special economic zones (SSE).
Support under the PSI takes the form of a tax exemption in the form of regional public aid. The exemption amount is limited in accordance with the allowable aid intensity for a given region of Poland. The exemption applies to income generated from business activities specified in the decision and is available for a specified period – from 10 to 15 years, depending on the investment location.
Conditions for obtaining a decision on support – quantitative and qualitative criteria
To receive a support decision, an investment must meet strictly defined quantitative and qualitative criteria set out in the regulations.
Quantitative criteria define the minimum eligible investment costs that an entrepreneur must incur, depending on the size of the company and the situation in the investment region. As a rule, the higher the unemployment rate in a given district (relative to the national average), the lower the required investment expenditures. For a large enterprise investing in a district with very low unemployment (below 60% of the national average), the entry threshold is PLN 100 million in eligible costs. In the least developed regions (with unemployment above 250% of the national average or so-called medium-sized cities losing their functions), a large company must invest only PLN 10 million. Similarly, lower thresholds apply to medium-sized, small, and micro-enterprises. Additional preferences are provided for investments in the modern business services sector and for research and development (R&D) activities – in these cases, the required minimum level of expenditures is lower (treated as for smaller companies).
In addition to financial criteria, the investment must contribute to economic and social development, assessed according to qualitative criteria. The regulations provide for a total of 10 possible qualitative criteria (scored), grouped into two categories: economic sustainability and social sustainability. For example, these criteria include:
- implementation of investments in preferred sectors consistent with the country's development policy or the region's smart specializations,
- conducting R&D activities,
- implementing innovations,
- automation and robotization of processes,
- pro-ecological investments (OZE),
- cooperation with local suppliers (creating cooperative links),
- supporting employees (e.g. subsidizing childcare, employing people with disabilities),
- creating high-quality jobs (stable employment in specialized positions),
- locating the project in a district with very high unemployment or in a city losing its socio-economic functions.
Each criterion is assigned a point weight, typically 1 point for meeting a given requirement. The applicant declares which criteria they will meet – they must earn the minimum required number of qualitative points and at least one point from each category (economic and social). It should be noted that the detailed lists of criteria vary slightly depending on the nature of the project – separate sets (though similar) apply to industrial investments and service projects.
The procedure for obtaining a decision on support – authorities, application, validity period, beneficiary's obligations
An application for a support decision should be submitted to the appropriate SSE Manager, acting on behalf of the minister responsible for the economy. Fourteen SSE Managers (operating as commercial companies) have been designated in Poland. The relevant SSE Manager will be the one who manages the area (district) where the investment covered by the support decision is to be located.
The application itself is submitted on a form. In addition to the applicant's details, the form must include the new investment implementation plan, eligible investment costs, employment information (current employment levels and the number of employees planned for the new investment), and qualitative criteria that the applicant undertakes to meet as part of the planned investment. In addition to the above information, a number of declarations must be submitted (including information on public aid received to date and the applicant's financial situation).
The form must also be accompanied by: (i) a detailed business plan for the new investment, (ii) financial statements for the last three financial years (if the applicant operated for that number of years before submitting the application for the decision) and (iii) an information form presented when applying for de minimis aid with detailed information on the economic situation of the applicant, its capital connections and the type of business activity conducted by the applicant.
The key issue in the procedure for obtaining a decision on support is that the application, together with annexes, should be submitted to the relevant SSE Manager before the commencement of the new investment, i.e. (i) before the commencement of construction works related to the investment covered by the project, or (ii) before the applicant signs the first legally binding commitment to order equipment, or another commitment that makes the investment irreversible.
The decision on support will be issued by the relevant SSE Manager, acting on behalf of the Minister responsible for the Economy. The condition for issuing the decision on support is that the applicant meets all the conditions for granting public aid (meeting quantitative and qualitative criteria) as well as formal criteria (providing all required information and documents).
If the applicant disagrees with the decision issued by the SSE Manager acting on behalf of the Minister of Economy, an appeal procedure is available. Under this procedure, the applicant may submit a request to the Minister of Economy for a reconsideration of the matter, and then to the Provincial Administrative Court in Warsaw.
Pursuant to the Act of May 10, 2018, on Supporting New Investments, a support decision is issued for a fixed period, no shorter than 10 years and no longer than 15. The validity period of the decision depends on the aid intensity established for the given area. Decisions with a maximum validity period (15 years) are available to entrepreneurs whose investment will be located in an area that is at least 51% within the boundaries of a special economic zone, as defined by Article 2 of the Act of October 20, 1994, on Special Economic Zones.
The support decision will impose obligations on the beneficiary related to the implementation of the new investment (meeting quantitative criteria), employment, and meeting qualitative criteria. These include the deadline for completion of the new investment, the deadline for incurring costs (at the agreed level), and the period from which and for which the appropriate level of employment related to the new investment must be maintained. In practice, particularly with large and complex investments, delays in the investment process may occur, resulting in the inability to meet the deadlines specified in the support decision. In such a situation, a request for a change in the support decision regarding the deadlines specified therein, applicable to the entrepreneur, should be submitted to the Minister of Economy as soon as possible. The request to amend the support decision must include detailed justification and evidence supporting the claims made in the application (usually factual circumstances beyond the entrepreneur's control that result in the inability to meet the deadlines related to the investment). Similarly, after the investment is completed, if the beneficiary encounters any difficulties resulting in the inability to meet the obligations specified in the support decision, it is necessary to submit an application for a change of this decision as soon as possible in order to avoid conducting business in a way that does not meet the criteria specified in the decision.
It should be noted that in the event of failure to comply with the obligations specified in the support decision or failure to remedy the violations in fulfilling these obligations, the Minister responsible for the Economy is authorized to repeal such decision. If the decision is repealed, the beneficiary will be obligated to repay the granted public aid. A similar situation will occur if the business ceases to operate during the decision's validity period.
Support settlement
Benefiting from tax exemption imposes reporting and record-keeping obligations on the investor. The entrepreneur should maintain separate records (books) to determine tax-exempt income. In practice, this means assigning revenues and expenses to the activities covered by the support decision and separately to activities taxed under general rules.
Moreover, taxpayers benefiting from public assistance are required to determine its present value at the time the decision on support is obtained. The net present value of the maximum assistance under the PSI requires calculating a discount on investment expenditures. Similarly, the use of public assistance obliges the taxpayer to discount the hypothetical value of income tax on exempt income.
Discounting public aid serves to ensure comparability of investment value and tax relief over time. In other words, discounting reduces "future" expenditures and tax relief amounts to their present value (PV). This allows for a comparison of the value of investment expenditures with the value of public aid (tax relief) received, even if these occurred in different accounting periods.
The discounting mechanism plays a key role in cumulating public aid from different sources within the same investment project. Regulations allow for combining SSE/PSI tax relief with other forms of support (e.g., grants, EU subsidies, property tax exemptions), provided that the total value of such aid does not exceed the maximum allowable regional aid intensity for a given area (e.g., 30%, 40%, or 50%).
Statute of limitations for PSI claims
It should be noted that the statute of limitations for claims for reimbursement under the PSI is 10 years. Given the long statute of limitations and the fact that the PSI exemption is "rolled over" (carried over from year to year), the beneficiary must retain accounting records throughout the entire period of implementation and use of the investment. An error in PSI settlement in the past translates into errors in future settlements.
Zone administrators also require periodic reporting of investment progress, e.g., submitting information on project completion, incurred expenditures, and the hiring of new employees.
Benefits and limitations of PSI tax exemption
Income from activities covered by the decision is exempt from corporate income tax (CIT) or personal income tax (PIT), which, given the basic 19% income tax rate, allows for the retention of a significant portion of net profit. However, the maximum tax exemption is limited by the provisions on regional investment aid.
The tax exemption applies only to income directly related to the new investment. In practice, the entrepreneur must precisely separate the activities covered by the decision – for example, a separate technological line, a separate plant, or a new product. Only income generated under the support decision is exempt. If the taxpayer also conducts other activities, they must allocate revenues and costs to the portion covered by the tax exemption and the portion subject to taxation. This creates practical challenges and can be a source of disputes with tax authorities. Tax authorities require the taxpayer to demonstrate a connection between the income and the supported investment in accordance with the terms of the decision. Court rulings have already emerged on these issues, although interpretations continue to evolve in line with tax practice.
Another limitation is the public aid limit. A business cannot benefit from the exemption in an amount greater than the allowable aid intensity. This is particularly important when the taxpayer also receives other forms of support, such as subsidies, government grants, or local tax exemptions. In such cases, the aid is cumulative and cannot exceed the allowable ceiling. The recipient of public aid must monitor its current value.
It's also worth mentioning industry-specific restrictions – not every business qualifies for PSI. Entire sectors are excluded, including:
- production of tobacco and alcohol products,
- retail and wholesale trade,
- financial and development services,
- education,
- health care and many other intangible services.
The program is primarily aimed at industrial production and modern business services. From June 2025, the defense industry can also benefit from the PSI exemption.
How can we help?
If your company is considering a new investment or already operates within the Polish Investment Zone (PSI) and Special Economic Zones (SSE) in Poland, Crowe Law Firm provides comprehensive support at every stage of this investment project.
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