Poland has extended its controls on new foreign direct investments for another three years, until mid-2025. As discussed in more detail in our previous update on this subject matter (GT Alert), the Polish FDI regulations were introduced as part of the cross-European trend to implement sovereign control mechanisms for direct foreign investments in relation to the crisis resulting from the COVID-19 pandemic. The FDI regime places certain restrictions on the acquisition of Polish businesses by investors from outside the European Union, EEA and OECD. As a justification for the extension of the controls, the government invoked the need to protect Polish companies against hostile takeovers in the midst of the current geopolitical crisis unfolding in Ukraine and its international effects.
The new Act Amending the Law on Goods and Services Tax and Certain Other Laws from 12 May 2022, signed by the Polish President, extends, among other things, the FDI restrictions and amends the existing (i) Act on Control over Certain Investments from 2015; and (ii) the Act on Subsidies to Interest on Banking Loans Granted to Businesses Affected by COVID 19 and on Simplified Composition Proceedings Related to COVID 19 from 2020. The changes, which will become effective as of 1 July 2022, include:
- a time extension of the Polish Covid-19 FDI regime by three more years, to 25 July 2025; and
- an amendment to the scope of the Polish Covid-19 FDI regime, extending the language from references to “Covid-19” to “Covid-19 and or an international situation disrupting the market or competition”, in the relevant legislation.
For a more detailed analysis of the Polish FDI regulations, which apply to acquisitions of significant interests or achieving a dominant position, please see the previous GT Alert.