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Foreign Direct Investment in Krakow, Poland

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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 Krakow 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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