The Act includes provisions introducing, i.a., restrictions for certain foreign investments in Polish companies, and as such follows the trend taken by the European Union Commission and other member states.
The restrictions are to apply after the lapse of 30 days from the date the Act is published and will remain in force for 24 months. The Act was signed by the Polish President on 22 June 2020 and officially published on 23 June 2020. Below we present a brief summary of the restrictions.
Which investors are affected?
The Act introduces certain restrictions in relation to investments contemplated by investors from outside the EU, EEA, or OECD.
What kind of investments will be subject to the contemplated restrictions?
The Act introduces a comprehensive definition of investments whereby the restrictions are triggered as follows:
Acquisitions of shares resulting in exceeding the level of 20% or 40% of the shares or votes in the total number of shares or votes in a given company
Acquisitions of shares in profit of a given company exceeding the level of 20% or 40% of the stake in the total profits of such company
Acquiring a dominant position towards the target company by:
o acquisition of its shares leading to exceeding the level of 50 % of the shares in the total number of the shares in such company
o entering into an agreement regarding the management over such target company or transferring its profits
Acquiring or leasing from the protected entity, its enterprise or its part
The restrictions are triggered by both direct and indirect acquisitions
What type of companies will be protected?
The Act introduces a wide scope of investments in Polish companies which will be subject to the restrictions, provided that their annual turnover for each of the last two years exceeds EUR 10 million, which will include, i.a.,:
Public listed companies
Companies owing critical (strategic) infrastructure
Companies developing crucial IT software, such as software for power plants, water plants, communication, payments, hospitals, transportation, food supplies etc.
Companies operating in strategic sectors, such as electricity, oil and gas, chemicals, defence telecommunication, medical, food etc.
What is the screening procedure?
The screening procedure foreseen in the Act is modelled on the current procedure for antimonopoly clearance. As a rule, the relevant authority (the Polish Office of Competition and Consumer Protection) must be notified prior to any acquisitions triggering the restrictions.
The procedure consists of two stages:
o does not raise any objections towards the contemplated acquisition, and therefore the acquisition may proceed, or
o issues its decision to start a formal control procedure
What are the consequences of not following the new restrictions?
Apart from the acquisition being null and void, not complying with the procedures as foreseen in the Act may result in fines of up to PLN 50 million, or imprisonment of between six months and five years.