Poland’s Defence Boom: Four Tips and One Must for Foreign Investors

Poland is spending on defence and security at a scale few countries match. In 2026 its defence budget reached a record PLN 200.1 billion, or 4.8% of GDP. According to the government, that is the highest share in NATO. The draft budget for 2027, now before the Sejm, plans PLN 198.1 billion, or 4.5% of GDP.

On top of the core budget, the government has launched several multi-year programmes:

• SAFE: EUR 43.7 billion (more than PLN 180 billion) in EU defence loans, the largest allocation of any member state. Poland signed the loan agreement in May 2026.
• Civil Protection and Civil Defence Programme 2027–2031: PLN 102.4 billion, mostly for investment, with more than a third to be spent through the regions.
• Security and Defence Fund: around PLN 23 billion from Poland’s Recovery and Resilience Plan, in loans and equity for companies and local governments.
• East Shield: fortification of the eastern border, budgeted at PLN 10 billion until 2028. The Defence Minister has said the final cost will be considerably higher.

Foreign manufacturers are following the money. Kongsberg has announced a plant in Pomerania, with production expected around 2028, and other EU countries plan to spend part of their own SAFE funds on Polish equipment. In October 2026, Poland beat Germany, the Netherlands and Norway to host the European service centre for PAC-3 missiles used in Patriot systems.

There are caveats. The 2027 budget is the first nominal decrease in defence spending since 2022. Much of the spending is debt-financed outside the state budget. Political disputes have already complicated SAFE: the President vetoed the act implementing it. The loan agreement was signed regardless, but using the funds outside the Ministry of Defence, for example for services under the Interior Ministry or for infrastructure, has become harder.

For the Polish government, security now also means infrastructure, civil protection, cybersecurity and healthcare. Public money will fund shelters, emergency power and water supply, drone detection, secure communications and hospitals able to operate in wartime. This opens the market to companies in construction, energy, IT and medical technology, not only to the defence industry.

Much of this money will not be spent by the Armament Agency. Local governments, hospitals and operators of critical infrastructure, such as power grids, gas networks and fuel pipelines, buy under the general Public Procurement Law. For suppliers of dual-use equipment, such as drone detection, sensors and perimeter protection, this route has different entry conditions from military procurement. SAFE’s European-content rules, for instance, apply only to purchases financed from SAFE.

The government is also changing how it buys. Statements by officials, including Deputy Defence Minister Magdalena Sobkowiak-Czarnecka, who has been responsible for armament since June 2026, point to four expectations. For foreign investors, they translate into four tips:

• Localise. Foreign suppliers are expected to be present in Poland. This means local production or local suppliers, Polish-made components, service and R&D centres, and technology transfer.
• Deliver on time. Tolerance for delays has ended. On-time delivery is now among the most important criteria.
• Stay flexible. The battlefield in Ukraine is changing fast. The government prefers flexible arrangements, such as framework agreements with shorter executive contracts, that let it react to these changes.
• Size is no barrier. Defence contracts are no longer reserved for industry giants. Small and medium-sized firms can compete, including directly for Armament Agency contracts, if they offer an innovative product and a flexible approach.

The four tips describe what the buyer wants. The must concerns whether a supplier is eligible to bid at all. In defence, eligibility is decided before price and product, and meeting the conditions takes months.

• Know which rules apply. A defence contract can be awarded under the general Public Procurement Law, under its separate regime for defence and security procurement, or outside procurement law altogether where the state invokes its essential security interests under Article 346 TFEU. Eligibility, deadlines, offset obligations and available remedies differ in each case. A supplier that does not know which regime applies cannot plan its bid or protect its position.
• Obtain licences and clearances early. Manufacturing or trading in military goods requires a concession from the Minister of the Interior. Contracts involving classified information require an industrial security certificate issued by the Internal Security Agency (ABW) or the Military Counterintelligence Service (SKW). Both procedures examine ownership, management and finances, and both take months.
• Structure ownership for the rules, not after them. SAFE-financed procurement is limited, with narrow exceptions, to contractors established in the EU, EEA-EFTA countries or Ukraine and not controlled from outside them, and components from other countries may not exceed 35% of the cost. Acquisitions of Polish companies in the sector may require foreign investment clearance. Ownership should be designed with these rules in mind before a tender opens.
• Get the consortium and contract terms right. Smaller firms usually enter through a consortium or as subcontractors to a prime contractor such as a PGZ group company. Consortium agreements must allocate joint liability, intellectual property and export-control obligations. Given the emphasis on deadlines, expect contractual penalties for delay to be applied rather than waived.

A supplier with this in place can respond when a procurement opens, not after it closes. That matters to the buyer as well: a procurement that ends in disqualification or appeal delays equipment the state has already decided it needs.