Updated Guidelines for Polish FDI Screening Mechanism

Poland has multiple FDI screening systems

FDI requirements apply to transactions concerning certain companies (both share and asset deals) that involve foreign investors. The Polish Act on the Control of Certain Investments of 24 July 2015 (the "Act") sets out the requirements, which apply until 24 July 2025.

Furthermore, the acquisition of shares in a company owning real estate (and direct real estate acquisitions) by foreigners are subject to restrictions. There are also restrictions on the acquisition of certain companies active in sectors such as energy, telecommunications, finance, defence or chemicals.

Polish Office of Competition and Consumer Protection is responsible for FDI oversight

The Act protects public companies as well as companies owning critical infrastructure, developing critical IT software, or operating in strategic sectors if their annual turnover in any of the past two financial years has exceeded EUR 10m.

The President of the Office of Competition and Consumer Protection (UOKiK) is responsible for overseeing transactions involving entities protected by the Act.

Restrictions under the Act apply to investors coming from outside the EU, EEA or OECD.

Under the Act, investments triggering the application of the restrictions include acquiring a dominant or significant interest in a protected company. By way of example, the purchase of shares (both directly and indirectly) as a consequence of which shares, votes or shares in profit, as the case may be, exceed 20 or 40 percent of the protected company's total share capital, as well as the purchase or lease of a protected company's enterprise, whether in whole or in part. 

In practice, evaluating certain types of transactions can be challenging. For example, the Act does not specifically exclude intra-group reorganisations from its scope. Similarly, transactions where multiple investors gain joint control require careful review.

Familiar proceedings

The notification is mandatory, and clearance must be obtained before closing (except for indirect transactions from Article 12c Section 7 of the Act, where the foreign entity obtains the status of a dominant entity in relation to an entity with a significant share in the protected entity or a dominant entity in relation to the protected entity – that exception can be triggered with foreign-to-foreign transactions).

The procedure under the Act is modelled on the current merger control procedure. The preliminary investigation takes up to 30 business days but can be extended for a further 120 calendar days if UOKiK decides to initiate control proceedings.

Updated UOKiK guidelines

So far, the President of UOKiK has conducted 15 investment control proceedings. UOKiK has not banned any transactions and has not issued any conditional decisions. Drawing on that experience, UOKiK updated its procedural guidelines in May 2024. The updated document is a response to the expectations of the market, including businesses and law firms.

The updated guidelines have not addressed every issue but are useful, nevertheless. Below we set out our key observations on the changes that appear in the updated guidelines.

• As in the case of merger control rules, the turnover of subsidiaries of the Polish company (target company) potentially protected under FDI rules must be taken into consideration when verifying if the turnover threshold for the mandatory FDI clearance requirement is exceeded.
• When considering the FDI clearance requirement, we must look at the company or other entity heading the capital group making the investment or at the natural person who ultimately controls the entities that intend to undertake the investment. This is crucial in the case of transactions conducted by SPV companies registered in EU, EEA, or OECD member states but which have foreign capital.
• Before being translated by a sworn translator, foreign official documents attached to the UOKiK notification must be legalized. Documents from a country that is a party to the Hague Convention should have an apostille clause, except for certain documents from countries with which Poland has signed international agreements abolishing such legalization requirement.
• Following the UOKiK notification, the applicant must complete a separate FDI questionnaire as set out under Article 6 of the EU FDI Regulation 2019/452.

The Polish version of the updated UOKiK guidelines are accessible at the following site.

If you need more information or further guidance in this area, please contact Marcin Alberski or Szymon Golebiowski.

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