The Polish government has just announced plans to replace the existing Special Economic Zones (SEZ) — scheduled to expire in 2026 — with a new system of permits providing a tax exemption for investments made anywhere in Poland, including outside the current SEZs.

The SEZ permits issued prior to the effective date of the new laws will continue in force until 2026 in accordance with the rules currently in place. No new SEZ permits will be issued under the rules applicable to date after the new system is launched.

As announced by the government, the conditions for issuing permits will differ significantly from those currently applicable to SEZ permits. The investor will still have to take on certain obligations concerning investment volume and employment headcount, but in the new system they will depend on the local unemployment rate and the investor’s size. Additionally, certain quality criteria will apply, including with regard to the location of the investment, quality of employment, innovative nature of the project and compliance with the government’s Responsible Development Strategy. In this new points-based system, the required minimum number of points will be lower in less developed areas.

It will probably be more difficult and complicated to obtain the new permit than it is now and the process of preparation and assessment of the application for a permit will significantly differ from current practice. However, the permit could be obtained for an investment located anywhere in Poland, without having to wait for your ideal location to be formally included in a SEZ, as is currently the case. Importantly, permits granted under the new rules will be valid for 10-15 years, and in the case of investments situated within currently existing SEZs for 20 years.

The new rules for issuing permits are tentatively slated to come into force on 1 January 2018.

Generally, the proposed changes are considered favorable, as they are expected to accelerate the investment process, attract investors (also due to extended time for the effective use of the available tax exemption) and further increase in the quality of investments located in Poland. Therefore, businesses planning to make new investments in Poland or to extend their operations should assess which of the rules — the current or the planned ones — better suit their particular circumstances and act accordingly in order to obtain a permit based on the rules that are most appropriate for them. You should also factor in the issue of compliance of the planned system with EU regulations on state aid.