Foreign Direct Investment in Poland

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Foreign Direct Investment in Poland
Foreign direct investment, according to the OECD definition, means an investment made ​​by a resident of one country (the direct investor) in order to achieve long-term benefits of capital employed in the company - a resident of another country (called the direct investment enterprise). Usually, foreign investment in many ways have a positive impact on the economy of the country in which they occur. The introduction of new technologies leads to the modernization of production and increase the level and the adaptation of new methods of management and organization improves the functioning of the company. Companies with foreign capital play an important role in the reconstruction and modernization of the economy and usually gain a significant share of foreign trade. Foreign investment can have a positive impact on the labor market, especially when they are localized in areas with particularly high unemployment. Foreign direct investment enterprise is an entity in which a direct investor owns at least 10% of ordinary shares (ie share capital) or rights to 10% of the votes at the general meeting of shareholders or members. Brief history of legislation on FDI in Poland. The first measure, which was to allow foreign investment in the field of trade and services in Poland was the Minister and Trade Regulation of 1976, however, its introduction did not affect the interest of foreign investment in Poland at that time. It is the law of 1982 on the activities of foreign companies in the field of small-scale production can be regarded as the real beginning of the interests of foreign companies doing business in Polish. It should be noted, however, that at that time the legal and political conditions permit primarily to make investments to individuals of Polish origin, less foreign entrepreneurs. The situation had improved Act 1986 for joint-venture companies. However, the requirement imposed arbitrarily partnership with the state-owned enterprises and limited management by foreign entities meant that only 50 companies established above. type. The Act of 23 December 1988 on companies with foreign capital was a further strong incentive for foreign investors. Although administrative barriers related to the creation of companies by foreigners were still significant, but roughly balanced to some extent applicable investment incentives, such as a three-year exemption from income tax, tariff concessions, as well as the possibility of the creation of the exclusive participation of foreign capital. A breakthrough in the field of FDI were the changes in the political system and the entrance to the road Polish market economy. Despite the many restrictions , present in enacted in 1991 a new law on companies with foreign capital (Controlling the purchase or disposal by a foreign entity or shares in existing companies that operate on the basis of previously granted licenses. Under the freedom of establishment of companies without the administrative supervision of excluded include: marketing and real estate agents, wholesale consumer goods, and the provision of legal aid.) , FDI in Polish was bigger, because the law allowed for foreign investors conducting business as a limited company or a limited liability company. An important event was the equalization of rights of foreign companies with national law Business Law. At the beginning of the transformation of FDI sizes were small. In subsequent years, the inflow of foreign capital slowly increased in 2000 to reach a very high annual value of over 10 billion euro - the data is illustrated in the table. However, the period of economic downturn in Poland and the overall unfavorable economic situation in the world in 2001-2003 weakened the inflow of FDI into the country by more than half compared to the value of FDI in 2000 were not conducive to FDI and other factors, including such as the erosion of preferences for foreign investors, the volatility of legal and tax...
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