The special economic zones are part of the Polish territory set up for a specific period of time (most until 2017 but are planned to be extended until 2020) where companies' operations are governed by specific, more favourable rules.

Entities operating in SEZ may take benefit for example of:

• exemption from income taxes (CIT or PIT),

• assistance with legal formalities related to the investment,

• exemption from real estate tax in some regions.

The income tax exemption is treated as regional public aid within the meaning of EU law. The maximum permissible aid for one investment project performed within SEZ equals maximum aid intensity for a given region (from 30% to 50%) multiplied by investment costs or two-year employment costs of new employees, whichever is higher. This means that the exemption may amount up to 50% of the qualified investment costs. The qualified investment costs include the expenses incurred in zone during the SEZ permit validity, such as on:

• acquisition of land or perpetual usufruct,

• acquisition or production of fixed assets included into tax payer's property,

• extension or modernisation of existing fixed assets,

• acquisition of intangibles related to the obtaining of patent and licence or know-how.

The amount of available tax exemption can be utilised by the investor until the end of the given SEZ existence with respect to the income generated on the business activity specified in the SEZ permit (income generated on activities which have not been specified in the permit is taxable under the standard rules).

Tax exemption within SEZ can be granted only on the basis of a permit for running a business in a SEZ, which is issued upon application. In order to obtain a SEZ permit and take advantage of the SEZ incentives the following conditions should be fulfilled:

• the investment should be financed at least in 25% from own sources (other than SEZ aid),

• the investment should operate for a period of at least five years after its completion (three years in case of small and medium enterprises),

• new jobs must be maintained for at least five years (three years in case of small and medium enterprises).

The SEZ permit contains the specific conditions levied on the investor, in particular: the value of the planned investment, the intended level of employment, date of commencing the business activity and deadlines for fulfilling all the obligations.

The SEZ regulations provide a list of business activities which cannot be performed within the SEZ, such as: construction services, services related to real estate, financial intermediary services, hotel and catering services, services of retail and wholesale trade. The most beneficial effects from operating in the SEZ are accessible for production companies and shared service centres.

One of the most important changes introduced on August 4 2008 is the possibility to establish/extend SEZ on private land more easily with the consent of its owner or perpetual usufructuary. So far SEZ was established mainly on the state land.

SEZ is one of the most effective instrument attracting new investments into Poland. The experiences of the companies taking advantage of tax incentives offered in SEZ are very positive and new investments are welcome.