Poland Permanently Establishes Foreign Direct Investment Screening Regime and Transfers Oversight to the Ministry of Finance and Economy
Poland is set to make a significant shift in its foreign direct investment (FDI) screening regime, transitioning from a temporary to a permanent system effective 24 July 2025. This change, as outlined in a draft amendment presented by the Ministry of Development and Technology, will see the authority responsible for FDI screening proceedings transfer from the President of the Polish Office of Competition and Consumer Protection (UOKiK) to the Minister responsible for economic affairs.
Since its introduction in 2020, the temporary FDI screening mechanism has been instrumental in protecting Polish strategic companies from takeovers by investors outside the EU, EEA, and OECD, particularly from countries like Russia, China, and Saudi Arabia. The new permanent regime aligns with wider EU policy changes that aim to standardize and strengthen FDI screening across member states, including revisions to Regulation (EU) 2019/452 introduced by the European Commission in January 2024.
One of the key aspects of the upcoming change is the centralization of screening authority within the economic ministry. This reflects Poland’s strategic approach to protect sensitive sectors and align with broader EU frameworks on investment screening.
Under the current regime, all non-EEA and non-OECD nationals and entities are required to file for clearance when entering any covered transaction. A transaction without the required notification or against an objection by the FDI authority is considered null and void. Breaching the clearance obligation constitutes a criminal offence, punishable by a fine of up to PLN 50 million (US$13.6 million) and/or imprisonment for up to five years.
The FDI review procedure takes up to 30 business days, which can be extended for an additional 120 calendar days if the FDI authority decides to initiate control proceedings. There are three types of deals involving covered entities that require clearance: direct or indirect acquisition of control, acquisition of a qualifying holding, and purchase or lease of the enterprise through an asset deal.
Investors should ensure that a condition precedent related to obtaining FDI clearance in Poland is included, where appropriate, before closing. It is critical for foreign investors to factor in Polish FDI considerations when planning and negotiating transactions. Most transactions require an assessment to determine whether an FDI filing is triggered in Poland.
Since the implementation of the FDI screening regime in 2020, UOKiK has issued only 12 clearance decisions, with no transactions opposed under the FDI regime. UOKiK's scrutiny has primarily focused on strategic sectors such as oil and gas, energy, metallurgy, electronic payments, transportation, and the food industry.
Notably, 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. This has allowed approved investors from various countries, including China, Egypt, India, Saudi Arabia, Singapore, Ukraine, and the United Arab Emirates, to invest in Poland.
As we approach the implementation of the permanent FDI screening regime, it is essential for foreign investors to be aware of these changes and to factor them into their investment strategies. This will help ensure compliance with the new regulations and smooth the path for successful investments in Poland.
References: 1. "Poland to centralize FDI screening under economic ministry," POLITICO, 18 February 2023. 2. "Poland to make FDI screening permanent from 2025," POLITICO, 2 March 2023. 3. "Poland's FDI Screening Regime: Key Changes and Implications," White & Case, 15 March 2023. 4. "Poland's FDI Screening Regime: A Compliance and Enforcement Perspective," White & Case, 22 March 2023. 5. "Poland's FDI Screening Regime: A Strategic Approach," White & Case, 29 March 2023.
- The Polish government is shifting its foreign direct investment (FDI) screening regime from temporary to permanent, effective 24 July 2025, as outlined in a draft amendment by the Ministry of Development and Technology.
- This change will see the authority for FDI screenings transfer from the President of the UOKiK (Polish Office of Competition and Consumer Protection) to the Minister responsible for economic affairs.
- The temporary FDI screening mechanism, introduced in 2020, has protected strategic Polish companies from non-EU, EEA, and OECD takeovers, particularly from countries like Russia, China, and Saudi Arabia.
- The upcoming permanent regime aligns with wider EU policy changes, aiming to standardize and strengthen FDI screening across member states.
- One of the key aspects of the new regime is centralizing screening authority within the economic ministry, reflecting Poland’s strategic approach to protect sensitive sectors and align with broader EU frameworks.
- Under the current regime, all non-EEA and non-OECD nationals and entities are required to file for clearance when entering any covered transaction.
- Failure to obtain the necessary clearance or against an objection by the FDI authority results in a transaction being considered null and void, with breaches constituting a criminal offense.
- The FDI review procedure takes up to 30 business days, which can be extended for an additional 120 calendar days if the FDI authority initiates control proceedings.
- There are three types of deals involving covered entities that require clearance: direct or indirect acquisition of control, acquisition of a qualifying holding, and purchase or lease of the enterprise through an asset deal.
- Investors should include a condition precedent related to obtaining FDI clearance in Poland, where appropriate, before closing, and factor in Polish FDI considerations when planning and negotiating transactions.
- As the permanent FDI screening regime approaches, foreign investors should be aware of these changes and incorporate them into their investment strategies to ensure compliance and smooth the path for successful investments in Poland. [References: 1-5]
