Krakow
has attracted foreign direct investment worth billions of
dollars
Forty-million
Poland
is situated in the very center of Europe,
it has a long border with Germany, and the Polish economy is integrated with the Western European
markets as the country has joined the European Union in 2004. At the same time Poland’s labor costs
stay at a third of Germany’s. Small wonder
foreign investors, from multinationals to fairly
small enterprises, have flocked in the recent decades either to buy a privatized company here or
to set up a brand-new one. The more so that
Poland boasts a sizeable and fast-expanding
internal market of its own, enjoys a healthy GDP
growth year after year, and remains a model of
political and economic stability in the region.
And the country does encourage foreign
investments.
If you want to jump the bandwagon
and invest in Poland, Krakow appears a
particularly good place.
Advantages
of investing in Krakow
Krakow
has just a million
inhabitants or so in its immediate metropolitan area but some
8.5 million live within a radius of 100 km. And
the city is situated at Europe’s crucial
crossroads between Germany and Ukraine and
between Scandinavia and the south of the
continent, with the country’s best road and
rail links, and its international airport second
busiest in Poland after the Warsaw one.
In
Krakow practically everything costs much less than in the bursting capital,
Warsaw. It applies to living costs as well as,
say, office space and notably labor.
The right staff
is also far more readily available here than in skills-hungry Warsaw, while Krakow’s
25 institutions
of higher education
produce 30,000-plus graduates a year. At the same time the
city’s various charms, the quality of life,
cultural robustness, fine
restaurants, etc, are
incomparable. And crime in Krakow is the lowest among
Poland’s major cities (the country as a whole
being much safer than the USA, to say nothing of
Russia).
The
downside, notably for major corporations, is
greater distance to the Warsaw corridors of power
and the lack of the critical-mass concentration
of big businesses.
Krakow's
FDI
In
the years 1989 to 2005 foreign
direct investments in Krakow amounted to US dollars 4.67 billion.
The figure translates into 6,177 dollars per
capita.
Americans
invested more money in Krakow than any other
nation but German FDI projects proved more
numerous.
To name names
the following are foreign companies that invested the biggest
money in Krakow to date:
Hypo-Vereinsbank (Germany) paid
$1,011 million for the BPH bank.
Philip
Morris (USA) paid $521 million for the Krakow Tobacco Plant.
Pliva
(Croatia) paid $209.8 million for the Polfa
Pharmaceutical Plant.
Mittal
Steel Company (UK) paid $202.1 million for the Huta im.
Tadeusza Sendzimira (HTS) Steelworks and its affiliates.
RR
Donnelley&Sons Co.
(USA) invested $123.7 million to build printing plants.
Dutsche
Bank (Germany) paid $119.5 million for the BWR Bank,
GTC Korona office block, and GTC Galeria Kazimierz shopping
mall.
Carrefour
(France) built three shopping
centers
for $98.5 million.
Fortis
Bank (Belgium) paid $97 million for the Pierwszy
Polsko-Amerykanski Bank SA.
HGA
Capital / HSH Nordbank (Germany)
invested $93.7 million to build Galeria Krakowska shopping
mall.
ECE
Projektmanagement (Germany) invested $93.7 million to
build Galeria Krakowska shopping mall.
Tesco
(UK) invested $92.7 million in its Polish subsidiary, the
Tesco Polska S.A.
Mid
Europa Partners (USA) paid $88.6 million for the
Aster City Sp. z o.o. cable television.
Rumeli
Group (Turkey) paid $79.1 million
for the Nowa Huta Cement Works.
Metro
(Germany) invested $77.7 million to build the M1 shopping
center and the Makro Cash & Carry hypermarket.
Accor
(France) invested $65.9 million in hotel chains.
Klepierre
(France) invested $63.8
million to build the Krakow Plaza shopping mall.
Kardan
Group (Israel) invested $60.5 million in the
Galileo office block, and GTC Galeria Kazimierz shopping
mall.
Plaza
Centers (Israel)
invested $50
million to build the Krakow Plaza shopping mall.
BP
(UK) invested $48.5 million in its Polish subsidiary, PB
Poland Sp. z o.o.
Sheraton
/ Starwood Hotels and Resords (USA) invested
$43.2
million in the Sheraton Krakow Hotel.
Ikea
(Sweden) invested $40 million in the Ikea shopping center and
the Cracovia Business Center office block.
Tips
for foreign investors.
1. You need a lot of patience in dealings with bureaucracy –
in Krakow as everywhere.
2. A knowledgeable native helper with connections
can prove pretty instrumental in cutting through
the red tape.
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