Israeli investors, businesses are flocking to Poland

Real estate developers investing in residential and office buildings, shopping malls, medical centers, hospitals, cinemas, food and beverage.

polish flag 88 (photo credit: )
polish flag 88
(photo credit: )
Reports of Israeli investments in Poland indicate that there is an ever-growing Israeli presence in Polish real estate and hi-tech. But no one really knows the true extent of Israeli investments in Poland, because a number of Israeli companies are registered or merged under different names in other countries in a bid to outsmart the Israeli income tax authorities. Israeli investment in Poland at the end of 2006 was €30 million, according to Robert Seges, team head of the Polish Information and Foreign Investment Agency's Foreign Investment Department. But according to different sources, he recently told a trio of visiting Israeli journalists, the sum is closer to €2 billion. The majority of Israeli companies are treated as Dutch investors, he added, because the investment does not come directly from Israel, but from the Netherlands for tax purposes. Israeli real estate developers are investing in residential and office buildings, shopping malls, medical centers, hospitals and cinemas. Israelis are also part of Poland's food and beverage business. The Strauss Group, for instance, has a significant place in Poland's coffee industry, and its Polish subsidiary is known as Strauss Café Poland. Previously known as Elite Coffee Services, Strauss has been operating in Poland since 1995. Prior to the arrival of Strauss, Poland was largely a tea-drinking country with a tradition that was hard to overcome, Strauss Café Poland CEO Jacek Kazimierski said. Strauss was the first coffee company to come to Poland, and thus captured an appreciable share of the market, he said, adding that it's now trendy to drink coffee in Poland. Poland welcomes all categories of Israeli investment, Seges said, especially information technology and security-related hi-tech sectors. Specifically, Poland wants to make use of as many Israeli security devices as possible during the Euro 2012 Soccer Championship, which it is co-hosting with Ukraine. With millions of soccer fans and other visitors flocking into the country by air, rail and road, Poland does not want to take any chances in matters of security. Its defense industry already has substantial agreements with Israeli companies, Seges said, but Poland is on the lookout for Israeli security expertise in the civilian market. Poland will this year mount a major promotion campaign in Israel within the framework of "Polish Year in Israel," Seges said, which is geared to the enhancement of bilateral relations on every level, but particularly in trade and direct foreign investment. According to a survey conducted by Ernst & Young, Poland, with its strategic location in the heart of Europe, ranked second in Europe for potential preferred investment by foreign companies, he said. Foreign direct investment in Poland in 2006 was approximately €15.2b., Seges said, adding that 2007 was expected to be equally successful based on figures for the first 10 months of the year. Ever increasing numbers of foreign companies are setting up production plants in Poland, he said, because although the Polish economy has grown by leaps and bounds, labor costs remain relatively low. There is growing interest in Poland from Asian countries such as India and Japan, and China is also gaining a firm foothold. Poland, which is now pursuing a policy of innovative economy, is keen to marry science to industry. Since the level of education in Poland is high, with 427 institutions of higher education and some 2 million university graduates a year, Poland provides very fertile ground for R&D-oriented foreign investors, Seges said. There are 40 R&D centers in Poland belonging to foreign investors, including the largest Indian companies, who find it more cost effective to operate in Poland, he said, adding that Israel's creativity and expertise in R&D and IT would be mutually beneficial in the establishment of technological parks in Poland. Technological parks are among the pet subjects of President Shimon Peres, who has been invited to go to Poland for the 65th anniversary of the Warsaw ghetto uprising. If he accepts the invitation, there is little doubt that Polish officials will utilize the visit to discuss technological parks with him. As its economy improved, Poland also began investing abroad, but this, Seges said, "is a new issue for the Polish economy," and started only in 2000. Polish investments today are primarily in the Czech Republic, the Netherlands, Sweden, Switzerland, Russia and Ukraine. Seges did not rule out the possibility of Poland investing in Israel. Meanwhile, efforts are being made in Warsaw to revive the Poland-Israel Chamber of Commerce. Due to reorganization in Poland's economic circles, it had fallen by the wayside. Malgorzata Januszewska, the the Polish Chamber of Commerce's senior manager, is trying to revive it, and paid tribute to Henryk Levinski, chairman of the Israel-Poland Chamber of Commerce, for his contribution toward this goal. He was instrumental in organizing the Polish sister chamber, and is now involved in getting it back on its feet. The Israel-Poland Chamber of Commerce was established in 1988. It cooperates with the commercial sections of the Israeli Embassy in Poland and the Polish Embassy in Israel, and enjoys the support and cooperation of the Israel Export International Cooperation Institute, the Foreign Ministry, the Manufacturers Association of Israel and the Federation of Israeli Chambers of Commerce. The Polish zloty is strong against the euro and the US dollar. Whereas it was more or less on par with the Israeli shekel when Poland freed itself from Communist rule, the zloty is now worth considerably more than the shekel.