New directions, new risks. This is how Polish companies are expanding beyond Europe.

• Polish companies are increasingly choosing the Balkans, North America, and "exotic" markets to minimize risk and gain a market advantage.
• Successful expansion requires information support, knowledge of local regulations and strategic alliances.
• The Foreign Expansion Fund helps reduce investment risk, accelerates development and makes it easier for medium-sized companies to enter global markets.
• A report on foreign expansion and the role of Polish diplomacy will soon be published on the CIS and CIS Economic Trends websites: "New Exports, New Diplomacy – Where Are Polish Companies Headed?" The report's partners are PFR TFI and KUKE.

Just a few years ago, the directions of Polish companies' international expansion were largely obvious – European Union countries, especially immediate neighbors like Germany and the Czech Republic, were the main investment destinations. Geographic proximity, regulatory similarities, and economic and political predictability all created a sense of comfort and relative security.

Today, when looking for attractive directions of expansion, it is worth looking a little further - also in a less obvious direction.

Investors are looking with greater confidence at more distant destinations. Strategies and motivations for foreign markets are also changing. A growing number of Polish companies are seeking growth opportunities outside the EU – in the Americas, Southeast Asia, and Africa. These companies are driven not only by the desire to find new customers but also by the need to build resilience to challenges – both geopolitical, raw materials, and logistics. Geographic diversification is becoming a viable risk management strategy, not just a profit-seeking one.

We are at a point where Polish businesses see international expansion as an opportunity for the next stage of their development . From the perspective of the Foreign Expansion Fund, I can say that we are increasingly partnering with companies that are going abroad not only to acquire new clients, but also to acquire technology, talent, and know-how. Entrepreneurs are also very careful when choosing their expansion direction.

In the neighborhood and beyond...

Foreign industrial companies are discovering the potential of the Western Balkans. Due to its geographic location, trade links, and cultural proximity, this region could also be of interest to Polish companies.

It is worth citing the results of research conducted by the Vienna Institute for International Economic Studies in cooperation with the chambers of commerce of six countries in the region – Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. The results confirm the growing importance of nearshoring in the region.

As we read, the inflow of FDI to the region, especially to Bosnia and Herzegovina, Kosovo and North Macedonia in 2020-2023 significantly exceeded the values recorded in the long term.

Investors who have invested in the Western Balkans cite its favorable geographic location , skilled labor, and competitive labor costs as key factors attracting businesses. Seventy-two percent of respondents expressed satisfaction with investing in the region, and 11 percent said they had relocated from more distant locations to be closer to EU markets.

Analysts point to emerging investment niches in sectors such as infrastructure, energy, agri-food processing, and municipal services. An additional advantage is the growing interest of the European Union in these countries' accession processes, which translates into increased aid funds and institutional support. Now is the time to build a position there – before global players do.

On the high seas

The latest data from the United Nations Conference on Trade (UNCTAD) show that developed economies were hit hardest by last year's decline in FDI inflows.

According to the World Investment Report, FDI inflows to developed countries in 2024 reached $626 billion, down 22% from the previous year, when investments worth $807 billion were announced. It's worth noting, however, that North America bucked this trend , recording a 23% increase in inward FDI. Foreign investment there reached $343 billion in 2024 and $280 billion in 2023, respectively.

Despite strong competition and relatively high costs, developed markets attract investors for at least several reasons.

Let's start with the fact that they offer a high level of legal protection and an efficient institutional environment, and for long-term investors, the security of investing capital is often one of the decisive factors .

The second factor is advanced infrastructure. Efficient ports, rail connections, air transport, and digital infrastructure enable integration with global value chains. Let's not forget that developed countries, with the US at the forefront, are the home of innovation clusters. Investors are therefore attracted by the highly skilled local workforce, universities and research centers, and access to startups and licensed technologies.

In the US and Canada, companies operating in sectors such as IT, fintech, healthcare services, organic products, precision industrial components, and advanced agricultural technologies currently have the greatest opportunities . The key to success is knowledge of local certification systems, partnerships with local companies, and professional advice—both legal and strategic.

Exoticism with potential

PFR TFI argues that when looking for attractive investment destinations, it is also worth looking at regions that are not usually among the top destinations most frequently chosen by investors in its reports, which it prepares with PwC Polska in cooperation with KUKE.

We want Polish companies to thrive in the global market, fully utilizing the potential of international expansion . Markets previously perceived as "exotic" – in various parts of Asia (India, Vietnam, Malaysia), Africa (South Africa, Morocco), and South America (Chile) – offer not only a dynamically growing middle class and rising consumption, but also less competition and higher margins. For many companies, this represents an opportunity to establish a market position ahead of global players.

However, these same markets are associated with higher political risk and cultural barriers. Therefore, successful expansion depends not only on strategy but also on practical operational preparation – knowledge of local law, tax systems, capital repatriation options, and even staff availability.

Economic diplomacy – when business needs support

It's impossible to plan international expansion today without considering geopolitical risks. Shifts in supply chains, growing trade tensions between China and the US, regional conflicts, and currency instability all require companies to make quick decisions and demonstrate flexibility.

In this context , economic diplomacy is becoming increasingly important . It's no longer just about providing protocol support or assisting with organizing trade missions. Its informational role is becoming crucial – access to knowledge, support in analyzing regulatory risks, and assistance in establishing contacts with partners and local administration. Strong, well-established development institutions and investment promotion agencies are becoming informal "knowledge hubs," benefiting even the most experienced companies.

Most countries in the world have established investment agencies aimed at promoting and facilitating investment, with a particular emphasis on attracting multinational enterprises and reaping the benefits of foreign direct investment.

Polish entrepreneurs who would like to develop their business abroad have at their disposal a wide range of services from the PFR Group , which carries out a wide range of activities – from promoting the Polish economy and strengthening the brand of Polish companies on the international stage, through providing access to information on the economic environment, to various forms of financing Polish investments abroad.

A stable partner is worth its weight in gold

The Foreign Expansion Fund (FEZ), managed by PFR TFI, was established to stimulate Polish direct investment. The first fund launched in 2016 and has already completed its investment period. During that period, it financed 20 transactions. Two years ago, in response to growing interest, we launched a second fund that continues this mission and operates on similar principles. By offering financing for foreign investments by Polish companies, the Fund helps reduce their risk while accelerating business development. Thus, the Fund's offerings help fill a gap in the Polish financial market and help remove key barriers to the international expansion of domestic companies. In this way, the Fund helps implement much larger-scale projects or preserve its own funds for other purposes, including further acquisitions. Experience shows that after a successful first acquisition, the appetite for further acquisitions grows.

The fund offers more than just the funds necessary to finance the transaction; it actively participates in the process of assessing the project's business assumptions and can share the risks associated with the investment. The fund's nearly 10 years of experience demonstrate that by gradually increasing their presence in foreign markets, Polish companies gain increasing knowledge and valuable business experience, which in turn allows for a smooth transition to increasingly advanced forms of internationalization.

The greater the knowledge, the lower the uncertainty and risk of undertaking business outside the home country. The distance, both geographical and psychological, also decreases , thus increasing the company's willingness to invest capital in projects in markets that are less obvious from the perspective of Polish international expansion – one might even say, off the beaten track.

In summary, it's safe to say that Polish companies are learning to operate globally. International expansion is no longer the domain of the largest companies, but is becoming a strategic element for a growing number of medium-sized enterprises. The key to success today lies not only in capital, but also in access to information, flexibility, and carefully selected partners. The role of institutions like the Foreign Expansion Fund is to shorten, secure, and accelerate this journey—because time and efficiency are today's greatest competitive advantages.