Poland’s tech funding rules risk pushing investors elsewhere

This article is a part of Poland Unpacked. Weekly intelligence for decision-makers

Brussels wants to strengthen industry and is generously supporting critical projects in clean tech, batteries, biotechnology, and deep tech. Unfortunately, Poland’s STEP programs are far more restrictive than the European framework. Investors may choose to go elsewhere.

Europe needs reindustrialization, and Brussels is committing billions of euros to make it happen. It supports businesses through instruments such as the Innovation Fund, which is financed by revenues from the ETS system and helps achieve climate goals by fostering European industry and net-zero technologies. The EU is also rolling out new support mechanisms, including CISAF and the Industrial Accelerator Act. For some companies, obtaining funding in Brussels may prove easier than securing it in Warsaw.

“The calls for R&D and investment grants in critical technologies – such as biotechnology, clean tech, and deep tech – announced in 2025 by the Polish Agency for Enterprise Development (PARP) and the National Centre for Research and Development (NCBR) exclude companies with a controlling shareholder from outside the EU or the European Economic Area (EEA). Importantly, plans for 2026 indicate that the same rules will remain in place. This means a systemic restriction on access to support for some global investors, even if they intend to locate production facilities and create jobs in Poland,” notes Magdalena Zawadzka, a partner at the advisory firm Crido.

Indeed, the rules will remain unchanged.

“The principles aimed at promoting the EU’s technological advantage in critical sectors and ensuring the Union’s sovereignty and security also apply to this year’s STEP competitions. Almost all calls have already been launched. The final one will open on July 7 and will be dedicated to projects that have obtained Seal status under the Innovation Fund program,” the press office of the Ministry of Funds and Regional Policy (MFiPR) says.

STEP: good for Brussels, not so good for Warsaw

The Crido partner points out that Poland’s approach differs markedly from the direction adopted at the EU level.

“Even the Industrial Accelerator Act (IAA) prepared by the European Commission – which, in its initial drafts, envisaged certain restrictions related to the origin of capital for very large projects (above EUR 100 million) – ultimately limits such restrictions to a very narrow group of technologies. In Poland, by contrast, these restrictions are much broader, despite the fact that STEP competitions concern significantly smaller projects. Moreover, under the IAA, the origin of capital is only one of six assessment criteria, and applicants need to meet just four of them. In practice, this means that the IAA – a tool designed to strengthen ‘Made in EU’ manufacturing – does not impose exclusions as far-reaching as those found in Poland’s STEP programs,” says Magdalena Zawadzka.

She adds that this excessive “gold-plating” of EU regulations has created a situation in which obtaining EU funding in Poland is more difficult than securing support directly from Brussels. One example is the Innovation Fund, one of the EU’s largest financing programs for advanced net-zero technologies. Beneficiaries of the program receive the so-called STEP Seal, a mark certifying the quality of a project.

“In theory, the STEP Seal enables companies to apply for support under the national program of the same name. In practice, however, a project recognized by the EU as critical stands little chance of obtaining additional support at the national level,” notes the partner at advisory firm Crido.

What matters is where the employees are, not where the board sits

There are many companies from outside the EU and the EEA that already operate factories in Poland or are planning to build them.

“This is a significant limitation in the use of the STEP instrument. Its purpose is to support the development of critical technologies in Europe. It should not exclude companies solely because of the origin of their shareholders’ capital or the entity that controls the business,” says Agnieszka Lewandowska, an expert in the EU Funds and Digital Education Department at the Polish Confederation Lewiatan.

She stresses that the origin of capital should not automatically be equated with a lack of contribution to Europe’s technological sovereignty.

“If a company is registered in the EU, invests in Poland, creates jobs, expands manufacturing in Europe, pays taxes here and strengthens local supply chains, then overly rigid exclusion rules may prove detrimental to the Polish economy. The key considerations should be where the project is carried out, where know-how is created, where specialists are employed, and whether the investment strengthens Poland’s and Europe’s technological capabilities,” says Agnieszka Lewandowska.

STEP: Germany, France, Italy, and Spain offer better conditions

Magdalena Zawadzka believes Poland stands to lose from the current approach, while other EU countries are likely to benefit.

“Do we really prefer to see the production of critical components located in Czechia or Italy? These countries have not introduced comparable restrictions based on the origin of capital, nor has the European Commission itself. Under such a policy, Poland’s role is reduced to that of a recipient of innovations developed and manufactured elsewhere. These restrictions also run counter to the broader discussion on supporting local content,” says Magdalena Zawadzka.

Agnieszka Lewandowska of the Polish Confederation Lewiatan shares this view.

“If other EU member states do not impose similar ownership-related restrictions while Poland continues to do so, a global corporate group may decide to locate its R&D project or manufacturing operations in a country where access to public support is simpler and more predictable. Lewiatan has already pointed out that previous STEP calls in the EU’s largest economies – Germany, France, Spain, and Italy – did not contain comparable ownership restrictions,” says Agnieszka Lewandowska.

CISAF – the government fell behind

Worse still, other EU countries are already taking advantage of the latest programs prepared by Brussels, while Poland is not. This is the case, for example, with the CISAF mechanism, which is still undergoing domestic implementation work in Poland.

“If other countries notify state aid programs more quickly and do not narrow access based on the origin of capital, Poland may lose the competition for investments that could otherwise be located here,” says Agnieszka Lewandowska.

The Crido partner echoes this view.

“Italy has already notified support programs for net-zero technologies under CISAF. These schemes allow for financing of manufacturing investments even in developed regions, where there is an established workforce and infrastructure base. In Poland, however, we have been waiting for a year for the real deployment of the CISAF mechanism. It could enable the creation of attractive programs designed to bring in investors from the critical technologies sector,” says Magdalena Zawadzka.

Defense also limited to the EU?

The restrictions will also apply to the planned STEP Defence track.

“The same rules regarding limiting the participation of entities from third countries, and entities controlled by them, will also apply to the planned STEP calls in the defense sector,” the press office of the Ministry of Funds and Regional Policy said.

Experts consider this a mistake.

“It is worth noting that the SAFE program allows purchases from Canada. It is fairly obvious that STEP should support offset arrangements and the relocation of production by Canadian companies to Poland,” says Magdalena Zawadzka.

Agnieszka Lewandowska believes the policy should go even further.

“Regarding investors from allied countries, particularly NATO members, it would be worth considering easing these restrictions. In defense, of course, national security, technology control, and the protection of strategic interests must be taken into account. But automatically excluding companies solely because they are controlled by capital from outside the EU/EEA may run counter to Poland’s interests,” says the Confederation Lewiatan expert.

She adds that if the government wants to introduce restrictions for security reasons, it should first conduct an impact assessment covering specific sectors, critical technologies, and competitive conditions.

“As a possible solution, we have proposed expanding the eligible group to include companies controlled by entities from the EU, EEA, Switzerland, or NATO,” she says.

Few high-quality projects in STEP

So far, the programs’ budgets have not been heavily utilized. The Polish Agency for Enterprise Development (PARP) and the National Centre for Research and Development (NCBR) have held 12 STEP calls to date – four each in the Cleantech, Digital, and Biotech tracks. PARP allocates funding to investments, while NCBR supports research and development. In none of the tracks has funding utilization reached even half of the available budget.

In the Cleantech call, for which NCBR announced results on June 2, 2026, only one project was selected out of 39 submissions. The grant amounts to PLN 16.7 million (approximately EUR 3.9 million), corresponding to just 9.8% of the available budget. Undoubtedly, if more companies were eligible to apply, there would be more applications deemed worthy of support by PARP and NCBR.

“The allocation under the FEND program for Priority 5, created for STEP, amounts to EUR 900 million (approximately PLN 3.9 billion). The funds were shifted from Priority 1. The pool is very large. Meanwhile, across the entire country, we selected 23 development projects in three areas, including 11 under the innovation track,” notes Magdalena Zawadzka.

She points out that channeling EU funds into STEP is beneficial for the budget.

“There is no required national co-financing from the state budget. Therefore, this instrument should be designed in a way that directs as much funding into it as possible. At the same time, it should be used to support local content policy in critical areas, especially clean tech. Market demand driven by the energy transition in Poland is among the highest in the entire EU,” says the Crido partner.

European Commission would take a cautious approach

Officials argue that their approach is correct.

“Regulation (EU) 2024/795 on the STEP initiative does not contain specific legal provisions in this regard and does not impose any restrictions in this area. However, in light of STEP’s overarching objective of reducing strategic dependencies, European Commission support for such companies could be assessed cautiously and potentially limited,” the press office of the Ministry of Economic Development and Technology (MRiT) responded.

It is worth noting that the ministry simultaneously applies a different approach in other instruments, such as its grant programs, where all companies are eligible to apply.

Ministry representatives add that the European Commission encourages Member States to draw inspiration from selection criteria used in directly managed programs, such as Horizon Europe and the European Innovation Council (EIC).

“Ultimately, the decision to support such projects lies with the managing authority. It should be borne in mind that funding a company from a third country could deepen the EU’s dependency. By design, the European Commission’s STEP initiative is intended to support projects that meet one of two criteria. The first is bringing an innovative, cutting-edge, and breakthrough element with significant economic potential to the internal market. The second is a key contribution to reducing the EU’s strategic dependencies by strengthening its sovereignty,” the MRiT press office stated.

Officials also note that the requirement for control by an entity from an EU, EEA country, or Switzerland does not stem from the STEP regulation itself. It originates from Polish legislation and implementation documents.

“These provisions allow for additional restrictions to prevent funding being directed to companies from third countries if this could deepen the European Union’s dependency. Responsibility for defining eligibility criteria under the European Funds for a Modern Economy (FENG) program lies with the Ministry of Funds and Regional Policy,” MRiT said.

This is what the European Union intends

The Ministry of Funds and Regional Policy (MFiPR) takes a similar view.

“The European Union launched the STEP initiative in order to strengthen its position in the technological race and reduce dependence on suppliers from outside Europe. It concerns technologies considered strategic – from semiconductors and biotechnology to solutions related to the energy transition and security. For this reason, companies from outside the EU, EEA, and Switzerland were not eligible to apply for support in last year’s STEP calls launched under the FENG program’s Critical Technologies Support Fund,” the MFiPR press office states.

The ministry also points to requirements set by Brussels.

“The European Commission also emphasizes that STEP funding is intended to support the development of critical technologies as well as Europe’s economic and technological security. This is consistent with approaches used in other EU programs, including Horizon Europe. It also reflects a broader trend toward protecting strategic sectors of the economy. This can be observed, for example, in the United States, the United Kingdom, Canada, Japan, and India,” the ministry added.

Poland excludes companies controlled by capital from outside the EU and EEA from a number of EU-funded support schemes targeting critical technologies, including clean tech, biotechnology, and deep tech. By contrast, neither the European Commission nor most major EU Member States apply similarly strict ownership-based restrictions.
Experts from advisory firms and business organizations warn that this approach may discourage foreign investors from locating production, R&D activities, and jobs in Poland. In their view, what matters more than the origin of capital is where technologies are developed, where employees are hired, and where taxes are paid. Critics argue that Poland risks losing investment competition to countries such as Germany, France, Italy, and Spain, which operate more open support frameworks.
However, the Ministry of Economic Development and Technology and the Ministry of Funds and Regional Policy defend these restrictions. They argue that they are intended to safeguard the EU’s technological sovereignty and reduce dependence on entities from outside Europe.