Poland

Capital: Warsaw
Largest city: Warsaw
Official Language: Polish
Government: Unitary semi-presidential constitutional republic
Area: 312,696 km2
Population: 38,268,000
Currency: Zloty (PLN)
GDP total: PLN 5.082 trillion (USD1.363 trillion)
GDP per capita: PLN 134,074.66 (USD35,957)
Time zone: UTC +1/UTC +2
Calling code: +48
Internet TLD: .pl

[Source: Wikipedia]

Total Foreign Investment in Poland
2018: USD228.5 billion (PLN842.7 billion)
2019: USD236.5 billion (PLN872.1 billion) with the top 3 foreign investors being Germany, the Netherlands and Luxembourg

[Source: santandertrade.com/ UNCTAD’s 2020 World Investment Report]

3 largest trading partners: Germany, Czech Republic and United Kingdom
Top 3 exports: Vehicle parts, Cars and Seats

[Source: worldstopexports.com]

Q&A on Foreign Investment

Are there any foreign investment laws in Poland?
Poland does not have a general law for foreign investments. There are specific regulations in the Participation of Foreign Undertakings in Trade Act of 2018 and in the act called Entrepreneurs’ Law 2018. The acts provide rules on provisions for both foreign and domestic undertakings in Poland, setting up branches and representative offices of foreign undertakings in Poland and recognition of certificates, guarantees and insurance granted and issued in EU member states.
Is there a governing or regulatory body responsible for overseeing foreign investment in Poland?
Polish law has no regulations limiting foreign investments in Poland. However, European Parliament Regulation 2019/452 applies in this respect.
This Regulation establishes a framework for the screening by Member States of foreign direct investments into the Union on the grounds of security or public order.
Under the regulations, EU countries are required to exchange information and raise concerns. The European Commission will give its opinion on the investments, but the final decision on accepting the investor remains with the Member States.
The government department responsible for Poland’s economy is the Ministry of Economic Development, Labour and Technology. The other ministries concerned in specific cases are involved within the scope of their competence. For example, the Polish Investment and Trade Agency, as the central foreign trade agency of the Republic of Poland, is responsible, among other things, for investor recruitment and advisory services.
What restrictions exist in Poland on foreign investment?
A notification requirement has been introduced for public company takeovers. The main regulatory body with respect to public takeovers is the Polish Financial Supervisory Commission and the Office of Competition and Consumer Protection (UOKiK). Notification to UOKiK is also required where the merging or acquiring companies in the previous financial year have a combined aggregate worldwide turnover of all parties exceeding EUR1 billion or the combined aggregate turnover generated in Poland by all parties exceeding EUR50 million.
The regulations of the Act on the Immovable Properties Acquisition by Foreigners should also be taken into account. An acquisition or take-up of shares by a foreigner in a commercial company with its seat in the territory of Poland shall require a permit of the minister for internal affairs if, as a result of such act, a company which is an owner of immovable property in Poland becomes controlled by a foreigner.
This approach is consistent with the EU Screening Regulation (EU) 2019/452. There are three areas of screening:
- Sector-specific screening: This covers acquisition transactions whereby a non-EU person directly or indirectly acquires control of at least 25% of the voting rights in a domestic company. If the domestic company belongs to a particular security-relevant sector, the threshold is 10% of the voting rights. Acquisitions that are subject to the sector-specific review must be reported to and approved by the UOKiK. They are ineffective until they are cleared, and fines may also be imposed on the parties involved if not approved first.
- Cross-sectoral screening, in accordance with public order or public security in sensitive areas: This covers all acquisition transactions by which a foreigner (also from other EU member states) directly or indirectly acquires control over at least 10% of the voting rights in a domestic enterprise that manufactures the goods legally established in Poland (predominantly this applies to certain military equipment).
- Screening of critical infrastructures in the broader sense: There is a notification obligation for the acquisition of critical infrastructures in the broader sense. Accordingly, the UOKiK must be notified in writing of the conclusion of a contract under the law of obligations on the acquisition of a shareholding of 10% or more or the assets of a domestic enterprise that is active in certain legally established areas.
Which industries do these restrictions apply to (if any)?
There are no specified areas of strengthened control. The following rules apply to the whole economy.
However, in some crucial sections of the economy (for example, power industry, petrochemical industry, financial services, transport) a concession is required.
Can foreign investors acquire real estate/ property/ land in Poland?
The Immovable Properties Acquisition by Foreigners Act regulates the requirements for the Acquisition of real estate by a foreigner in Poland. According to the general rule, the acquisition of immovable properties by a non-EU-foreigner shall require a permit.
Are there any sanctions or restrictions on foreign investors from certain countries?
Article 63 (1) of the Treaty on the Functioning of the European Union (TFEU) provides that in the EU restrictions on the movement of capital are in principle also prohibited in respect of non-EU countries, i.e. unrestricted freedom of movement of capital also applies towards third countries. An exception is made for “indispensable measures […] justified on grounds of public policy or public security” (Art. 65 (1) (b) TFEU).
Despite the existence of the EU Directive: (EU 2019/452) on screening for investments from third countries, the principle of non-discrimination must be respected.
Economic embargoes are in place against some countries, which focus primarily on military actions.
Are any governmental approvals required for foreign investment in Poland?
Here, reference is made Q&A 6 above on the freedom of movement of capital. As explained in Q&A 13 below, foreign entrepreneurs and investors need a residence permit. EU foreigners enjoy the freedom of movement and freedom of establishment.
What are the common types of foreign investment in Poland?
Key sectors include consumer goods, advanced materials, agriculture, automotive, pharmaceuticals and chemicals, wholesale and retail, online retail. Offering high potential are sectors such as: consumer services, high-tech, multimedia, electronics, health and biotechnologies, renewable energy (i.e. there is an ambitious development plan in solar, wind and renewable energy storage).
What are the common business entities open to foreign investors?
In the light of Polish law, every foreigner has the right to undertake and conduct business activity in the form of:
- a limited partnership;
- a partnership limited by shares;
- a limited liability company;
- a joint stock company.
Each foreigner may acquire the shares or stocks, unless international agreements provide otherwise.
A foreign entrepreneur may conduct in Poland:
- a branch through which they carry out economic activity to the extent that they carry out it in the country of its seat;
- a representative office that allows a foreign entrepreneur to perform activities only with respect to advertising and promotion.
Are there any tax advantages for foreign investment in Poland?
Poland has about 90 double taxation agreements.
Travellers, who have their place of residence in a non-EU member state and do not hold a residence permit can make purchases in Poland free of VAT.
Are there any incentives for foreign investors in Poland?
Poland has indirect funds to channel money flows into designated regions or economic and innovation sectors. The funding is also available to foreign investors as long as they meet certain requirements. Measures led by the Polish government include:
- Grants for investment (a program for supporting investments of significant importance to the Polish economy for the years 2011-2030) – support is granted based on the number of jobs created, investment costs, training costs, investment in areas at risk of exclusion; and
- State aid.
Are there any free trade zones in Poland, which are attractive to foreign investors?
The Act on support for new investments amended the instruments of income tax exemption (CIT or PIT) in order to adjust the provisions to the current market situation and entrepreneur’s needs. The tax exemption is now available across the entire territory of Poland, for companies carrying out new investments, on publicly as well as privately owned land. There are also Special Economic Zones in Poland. The basic task of the Zone is to issue, on behalf of the minister responsible for the economy, decisions on support, which are the basis for granting public aid to economic entities in the area under its jurisdiction. In Poland, there are 14 Special Economic Zones.
Can foreign investors obtain work visas in Poland?
Schengen Visa: For business trips with a maximum duration of stay of 90 days, a Schengen visa can be applied for. It is an important instrument of business and company-related mobility and suitable for a self-employed person working abroad who wants to enter Poland, for example, to check the business activities in a representative office or permanent establishment belonging to the company and located here.
National Visa: A national visa must be obtained for a longer-term stay in Poland. It allows entry and a continuous stay in the territory of Poland or to several consecutive stays which jointly last longer than 90 days. The period of validity of a national visa cannot exceed 1 year.
Temporary Residence Permit: The requirement for the establishment of a business by a third-country national in Poland is that the person must also reside permanently in the country. The application for the residence permit must be submitted to the Voivodeship office (which represents the Polish government in each region) in the intended place of residence. A residence permit is given for a period of time not exceeding three years, whereby an extension of the title may depend on a positive evaluation of the previous entrepreneurial activity.
Permanent Residence Permit: An unlimited settlement permit can be granted under certain conditions. Family reunification is also possible and regulated by law.
Are there any foreign currency or exchange controls regulations in Poland relating to foreign investment?
The Anti Money-Laundering Act has been in force in Poland since 2018 to combat money laundering. According to this law, reporting, due diligence and documentation obligations exist for larger transactions of EUR10,000 or more.
The bank must report payments of more than EUR15,000 to the tax office.
Travellers entering or leaving EU countries and carrying cash of EUR10,000 or more (as well as the equivalent in any foreign currencies or other easily convertible assets, e.g. cheques made out to third parties) must declare this amount to the customs offices.
Can foreign investors invest in government projects? If so, are there any restrictions or penalties imposed on the withdrawal of such investments?
Foreign investors are allowed to invest in government projects. However, the investors should observe the tendering regulations and participation of foreign undertakings in trade regulations.
Are there any safeguards or investor protection frameworks in place in Poland for foreign investors?
There are no unitary safeguards, but specific ones. There are regulations at the global level (e.g. ECT, MIGA), at the EU level (e.g. anti-dumping measures), national (e.g. antitrust law) and bilateral (e.g. investment protection agreements).
Is Poland a signatory to any investment protection treaties with any countries?
As an EU member, Poland participates in all trade agreements concluded by the EU (e.g. CETA, TTIP). In addition, Poland has signed a double taxation agreement with 90 countries. Since 1990, more than 50 investment protection treaties have been concluded. These provide a basis for the mutual protection of investors (legal and private) under international law. Poland is a signatory to the Convention of the MIGA (Multilateral Investment Guarantee Agency) and ECT (Energy Charter Treaty).
Have there been any recent changes in law or developments for reform that may affect foreign investment in Poland?
It should be noted that the administrative control over investments in some strategic business systems has been strengthened by the recent amendment of the Act of 24 July 2015 on the Control of Certain Investments. The Act empowers the minister of state assets, the minister of defence and the minister of maritime economy to veto investments which result in acquiring 20% or more shareholding in some strategic industries such as energy, explosives, chemical and telecommunications. Further restrictions on foreign investment in strategic sectors or concerning critical infrastructure, such as the energy sector, have been introduced.
What tips are there for foreign investors to be aware of when dealing with foreign investment in Poland?
The choice of location plays a major role when applying for funding. Different funding rates apply depending on the region, and these are higher especially in the eastern part of the country. Migrant entrepreneurs can apply for numerous business bonuses. The level of human capital is high, and especially in big cities, there is no shortage of qualified specialists in various fields.
The standard corporate income tax rate is 19%. As a rule, the provisions of EU directives have been implemented into the Polish taxation system.

ABOUT THE AUTHORS

Dr. jur. Jan Muszyński
Attorney at law in Poland, Von Zanthier & Schulz

Jan Muszyński graduated from the Adam Mickiewicz University in Poznań with a degree in law in 2012. After graduation, as a scholarship holder of the Konrad Adenauer Foundation, he received a doctoral degree in law at the University of Bayreuth. His doctoral thesis was published by the prestigious Berlin publishing house Duncker & Humblot. He has been working with the law firm VON ZANTHIER & SCHULZ since 2019, specializing in providing ongoing advice to entrepreneurs especially in the areas of labor law, corporate law, including M&A transactions and business law.

Paulina Czaja
Trainee attorney at law in Poland, Von Zanthier & Schulz

Paulina Czaja studied law at the Adam Mickiewicz University in Poznań. In 2019 she graduated German law studies at the Georg-August University in Göttingen, obtaining the Master of Laws degree (LL.M.). During her law studies Paulina Czaja gained professional experience working for Polish and German law firms specializing in legal advisory in corporate law.
She cooperates with VON ZANTHIER & SCHULZ since February 2020. In January 2021 Paulina Czaja is beginning her legal traineeship at the Regional Bar Association in Poznań.

ABOUT THE FIRM

Name: Von Zanthier & Schulz
Address: Von Zanthier & Dachowski Kancelaria Prawnicze sp. K.ul. Garabry 56, PL 61-758 Poznan
Telephone: 0048 61 85 82 550
Email: poznan@vonzanthier.pl
Website address: www.vonzanthier.com
Key contact: Dr. jur. Jan Muszyński, Lawyer, muszynski@vonzanthier.pl
Established: 1995
Number of lawyers:
Languages: German, English, Polish

Brief description:
We are an interprofessionally organised law firm of solicitors, auditors and tax consultants with offices in Berlin, Poznań and Warsaw. We offer consultancy services in Germany in the field of German business and tax law and can assess your economic situation. Since 1992, we have been dealing with international matters and guiding you in national and cross-border law. In Poland, we can support you with Polish business and tax law.

Key practice areas:
Commercial law, Corporate law, Real Estate law, IT law, Labor law, Law on Renewable Energy, Medicine law, Tax law and Bookkeeping

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