About a year ago, Poland introduced a fully-fledged foreign investment screening regime to protect Polish companies in sensitive industries (known as "protected entities"). The regime covers a broad range of transactions (acquisitions of more than 20% of shares, voting rights or rights to profits may trigger a filing requirement) carried out by investors from outside the EU, EEA or OECD countries into Polish companies active in sectors considered to be sensitive, such as energy, defence, software, pharmaceuticals or cloud computing.
The wide scope of application of this new legislation initially raised concerns among both investors and Polish companies. They expected the law to place an excessive burden on potential investors. In addition, lawyers anticipated an influx of filings to the Polish competition authority, the agency responsible for reviewing such cases. However, after nearly a year of being in force, the Polish foreign investment regime has resulted in only limited enforcement from the Polish competition authority.
The limited number of cases so far should not lead parties to overlook the new law when considering investments in Poland. This is because M&A transactions carried out without notifying the Polish competition authority as required are void, and responsible managers may face criminal sanctions including imprisonment. To this end, it is particularly important to note that indirect acquisitions of Polish protected entities could trigger a post-closing filing requirement. In such cases, a filing should, as a rule, be made within seven days of closing. Until clearance is granted, an acquirer cannot generally exercise its corporate rights concerning the Polish protected entity.
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