The Polish FDI regime, introduced in 2020, establishes a foreign investment screening mechanism overseen by the Polish Competition Authority (UOKiK). This framework supplements the 2015 investment control regime, administered by relevant ministries. The earlier regime applies to a limited but steadily growing number of strategic entities—currently 23 across various sectors—and is enforced regardless of an investor's nationality.

Summary of major changes in 2024

• The year 2024 marked the much-anticipated revision of the FDI guidelines by the UOKiK. The updated guidelines incorporate developments—albeit limited—based on the UOKiK's experience and market practices. They also confirm a gradual alignment of the Polish FDI regime with the merger control framework, and highlight the growing formalism in the UOKiK's assessment of transactions.
• There remains a limited number of precedential decisions available, with he UOKiK issuing nine clearance decisions since 2020. Only one transaction underwent a more detailed review in control proceedings. The UOKiK has not objected to any transactions reviewed under the FDI regime, although one filing was withdrawn by the notifying party. Most filings were rejected for falling outside the scope of the FDI rules.
• The UOKiK has primarily focused on heavy industries such as oil & gas, energy and metallurgy, as well as the electronic payments, transportation and food sectors. However, transactions across a wide range of other sectors and industries could also come under scrutiny.
• An investor's nationality is not a decisive factor. Approved investors have included those from China, Egypt, India, Saudi Arabia, Singapore, Ukraine and the UAE.

Who files?

All non-EEA and non-OECD nationals (natural persons without EEA or OECD citizenship) and non-EEA and non-OECD entities (those without a registered office in the EEA or OECD for at least the past two years) are required to file for clearance when entering into any covered transactions. The origin of an investor is assessed at the ultimate parent level, meaning the nationality of the party directly involved in the transaction is not of primary importance.

In cases of indirect acquisitions, the obligation to submit a post-closing filing lies with the acquired entity holding dominance or a qualified stake in the covered entity. However, market practice shows that, to ensure greater deal certainty, parties often opt for pre-closing filings even in such scenarios.

The FDI rules include specific provisions to prevent circumvention of the EEA/OECD domicile requirement. For instance, subsidiary entities, branches or representative offices of non-EEA/non-OECD nationals or entities are also classified as non-EEA/non-OECD entities.

Even if an acquisition is conducted by an EEA/OECD citizen or entity with a registered office in the EEA/OECD, the buyer may still be deemed "foreign" if there are indications of law circumvention. Examples include cases where the buyer engages only in holding shares or controlling other entities, does not conduct sustainable business activities or lacks staff within the EEA/OECD.

Types of deals reviewed

There are three types of deals involving covered entities that require clearance.

The first is the direct or indirect acquisition of control over the covered entity, including: holding more than 50 percent of the votes at the general/shareholders' meeting, or 50 percent or more of the capital; having the right to appoint or dismiss the majority of the members of the management board or the supervisory body of the covered entity; and having any other right to decide the direction of the covered entity's business, including under an agreement with the covered entity.

Deals also require clearance where they involve the direct or indirect acquisition of a qualifying holding in the covered entity, representing 20 percent or more of the votes at the general or shareholders' meeting; share capital; or share in distributed profits. This also includes the acquisition of any holding that would raise the buyer's total to more than 40 percent of the votes, share capital or share in distributed profits.

Finally, the purchase or lease of the enterprise—or an organized part thereof—of the covered entity through an asset deal also requires clearance.

The clearance obligation is also triggered if any of the above arises from the redemption of shares by a covered entity; a covered entity's purchase of its own shares; or the merger or spin-off of a covered entity.

Scope of the review

The UOKiK may issue an objection if the transaction poses at least a potential threat to public order, public security or public health in Poland, or if it might negatively impact projects or programs of interest to the EU. Therefore, political considerations may form the basis for potential objection decisions issued by the UOKiK.

A transaction made without the required notification or despite an objection by the UOKiK is considered null and void.

In the case of an indirect acquisition through transactions not governed by Polish law—such as the merger of non-Polish entities resulting in a change of control over a covered entity—while such transactions will not be unwound, the acquirer will not be allowed to exercise its corporate rights in the covered Polish company.

Additionally, breaching the clearance obligation constitutes a criminal offense, punishable by a fine of up to PLN 50 million (US$12.2 million) and/or imprisonment for up to five years.

Finally, in the case of an indirect acquisition, a person required by law or by agreement to manage the affairs of a subsidiary that has not submitted the required notification will also be subject to a fine of up to PLN 5 million (US$1.2 million) and/or imprisonment for up to five years, if that person was aware of the acquisition being made.

Review process timeline

The FDI review procedure before the UOKiK takes up to 30 business days. However, this can be extended for an additional 120 calendar days if the UOKiK decides to initiate control proceedings. Deadlines are suspended when the UOKiK is awaiting requested information and documents.

How foreign investors can protect themselves

The merging parties must consider the FDI rules whenever contemplating a transaction with a Polish element, such as when a Polish company is directly targeted or part of the target group. Most transactions require an assessment to determine whether an FDI filing is triggered in Poland. This assessment can be complex, requiring data from the parties involved, including detailed information on the capital group structures, the domicile of the ultimate beneficial owners, and the transaction structure and scope of business of Polish targets.

Due to the potential for varied interpretations of the FDI rules and the fact that consultation with the UOKiK may be necessary, FDI analysis should be started early in the transaction process. Moreover, as recent practices of the UOKiK confirm, the authority is becoming increasingly formalistic when it comes to the documentation required for FDI proceedings. The UOKiK may request documents to be translated, apostilled or legalized, depending on the case, which can significantly extend the document collection process. As a result, if an FDI filing is required, it can take several weeks to collect the necessary data and prepare the filing.

As with other jurisdictions, it is critical for foreign investors to factor in Polish FDI considerations when planning and negotiating transactions. Investors should ensure that a condition precedent related to obtaining FDI clearance in Poland is included, where appropriate, before closing. In some cases, it may also be necessary to allocate potential risks related to the FDI proceedings between the merging parties.

In most instances, obtaining swift clearance requires the FDI notification to be drafted clearly and informatively, accompanied by convincing evidence that the transaction will not raise any concerns. This necessitates not only a deep understanding of the transaction dynamics, but also efficient cooperation between different teams of advisers and effective communication with the client.

As the UOKiK is responsible for both FDI and merger control rules in Poland, it often applies "merger control" concepts when interpreting and implementing FDI rules—for example, in relation to turnover calculation or control relationships. As a result, advisers need to be well versed in both regimes and adept at guiding clients through this increasingly complex legal framework.
After submitting an FDI filing, it is essential to remain actively engaged in the process, build a positive working relationship with the UOKiK, and respond promptly to all queries from the authority.

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