Economic situation caused by the COVID-19 pandemic may have negative impact on the level of financial capability of Polish entities. As a consequence – currently the Polish government is proceeding with the statutory changes to protect Polish strategic enterprises against potential acquisitions by entities from outside the European Economic Area. The Polish government is amending the Act on The Control of Certain Investments (Act of July 24, 2015). According to the amendment – the state control over acquisitions of strategies entities will highly increase. The amendment is planned to apply only temporarily – for 24 months from day the new legislation enters into force.
Pursuant to the planned amendment – UOKIK, a Polish antimonopoly office, should be notified priorly about any transaction with natural or legal person from outside the European Economic Area if this transaction results or may result in achieving (i) the significant participation in protected entity or (ii) the domination status over the protected entity. By the „significant participation” the regulation means having an exerting impact on activities or actions undertaken by this entity – e.g. by holding the ownership title of at least 20% of the total number of stocks or shares in capital company or at least 20% of contributions in the partnership or the right to at least 20% of the profit. Status of the domination applies to situation if entity e.g. has a majority of the total number of votes in the decision-making body of other entity or has the right to appoint and recall a majority of members of the managing or supervising bodies of other entity.
By the meaning of the new regulations – the protected entity is the undertaking with its registered office in Poland, which has at least one of the features described below:
- is a public company – in the meaning of provisions on public offering and the terms for placing financial instruments in the organised system of trading and on public companies (in fine a company listed on a Warsaw Stock Exchange Market), or
- owns a property that has been placed in a uniform list of facilities, installations, equipment and services included in the critical infrastructure, or,
- develops or modifies the software listed in the regulation, or
- runs business activity in a subject strictly specified in the regulation – 21 enumerative listed branches of the industry – including e.g. the production of electricity, the production of motor gasolines or diesel oil as well as telecommunications activities
if the sales and service revenue of that undertaking in the territory of the Republic of Poland exceeded the equivalent of EUR 10,000,000 in any of the last two financial years.
The control authority which should be notified about the transaction is the Office of Competition and Consumer Protection. According to the new regulations – proceedings before UOKIK are planned to be a time-limited proceedings, which will consist of two independent phases – initial proceedings (up to 30 days) and control proceedings (up to 120 days).
Pursuant to the amendment acquisition of significant participation or domination over the protected entity conducted without proper notification to the controlling authority – is invalid. Additionally, persons responsible for gaining the significant participation or domination over protected entity without prior notification – shall be liable to a fine penalty amounted to 50.000.000 polish zlotys or imprisonment from 6 months up to 5 years, or both this penalties together.
As a consequence, when planning capital investments in Poland – it is highly recommended to understand and strictly follow the new regulations and obligations arising from planned amendment to the Act on The Control of Certain Investments (Act of July 24, 2015).
At the same time, it has to be noted, that the above mentioned legislation depicts that the Polish government is aware that due the COVID-19 the attractive and strategic for the Polish economy companies may be worth paying-attention to. Nevertheless, as most of the Polish companies will not be subject to this legislation it is a great and right moment to start to invest in Poland what was even confirmed by the Polish government itself. Please also have a look into the following links:
It is a right moment to be here in Poland and JGBS Biernat & Partners S.K.A. as your trustworthy partner in Poland will help you with all legal matters to succeed here.
Attorney-at-law Karol Spaliński and Attorney-at-law Kamil Biernat