Special economic zones: 45 days left until deadline for attractive tax breaks

Investors are swarming to locate in special economic zones (SSE) before January 1, 2001 when new regulations take effect ending attractive tax breaks.Some 130 licenses could be issued over the next 45 days. The frenzy has been caused by two bills scheduled to take effect next year, one of which is to define the conditions under which investments located in the zones will operate. Curiously enough, the bill does not yet exist in any form, but it is no secret that once formulated it will repeal all the tax breaks investors in the zones now enjoy. Instead the companies will receive a partial investment refund from the state. Although virtually no one knows what influence the regulations may have on the market, SSE authorities predict they will bring only chaos and fear that for a few months next year they will have no legal basis on which to grant new licenses. Sector representatives say that in eliminating its SSE's Poland decided to adjust its law to EU standards prematurely, making Poland a less attractive market for foreign investors, who will locate instead in the Czech Republic and Hungary, where SSE's still offer attractive breaks. In the five years that SSE's have been in existence they managed to attract 496 companies pledging to invest zl.10.6 billion. (Puls Biznesu, p. 7)