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As
of 1 January 2001, business activities conducted by non-residents in
Poland are subject to the Law on Commercial Activity of 19 November
1999 and the Commercial Companies Code of 15 September 2000. Subject
to meeting certain conditions, foreign entities and physical persons
may operate in Poland in accordance with the general principles applicable
to domestic entrepreneurs. The formation
of a company with foreign participation takes place without the
necessity of obtaining a permit from any state administration organ. Simultaneously, on 1 January 2001 the National
Court Register of Entrepreneurs replaced the previous locally based
registration system. The
obligation to be registered rests on companies operating under commercial
law, state-owned enterprises, co-operatives and other entities, as specified
in the Law on the National Court Register of 20 August 1997. This also
applies to natural persons undertaking business activities in Poland. A company registered in Poland acquires legal
personality upon being entered in the Register of Companies at the National
Court Register of the Economic Court having jurisdiction over the seat
of the company that is being formed. Foreign
investors may conduct their operations in the following legal forms:
In
addition foreign entities and individuals may operate branches, representative
offices, partnerships and operate as sole traders, subject to obtaining
a certificate from the relevant Polish Consulate confirming that
the law of their home country allows Polish nationals and companies
to operate in that country in a similar manner. In practise there may
be some difficulties in obtaining such certificates, due to differences
in legal solutions adopted by each country. In
all aspects, foreign owned Polish registered companies are treated on
the same basis as Polish owned companies. Foreign investors may receive or acquire shares
in companies already existing in Poland. Shares may be acquired in public
sales, through the Stock Exchange or, if the company is not listed on
the Stock Exchange, through individual negotiations with the existing
owners. The
Law on Commercial Activity enumerates
several areas, such as mineral extraction, air transport, trading in
arms and explosives, etc. in which economic activity may be undertaken
only if an appropriate license is granted. Such licenses are granted
for a period of no less than two and no more than fifty years.
Furthermore, operating in some other areas requires a permit on the
grounds of other legal acts. The
new law changed the scope of obtaining permits.
In many cases, where the law hitherto applied provided for the
necessity of a license / permit being obtained, the new law has changed
this obligation to the requirement of having a permit. In accordance
with the new law, a positive decision concerning the granting of a permit
solely depends on complying with appropriate statutory conditions. This
eliminates the arbitrariness of decisions passed in respect of granting
commercial activity permits. Among others, this relates to such services
as manufacturing of tobacco products, detective services, courier services,
customs agency services and organisation of tourist events. The new
law does not regulate certain spheres of business activity, such as
the processing industry, trading in non-ferrous metals and market place
services, regulated previously. There is no minimum value of a contribution
by a foreign party (subject to overall minimum share capital requirements
for companies) and no provisions either for minimum, or maximum percentage
share of foreign participation in the equity of a company, thus
it is also possible to form a company with exclusively foreign shareholding.
Nevertheless, in rare cases a company can be excluded from a specific
field of activity when the share of foreign parties in its total equity
exceeds a certain proportion (e.g. broadcasting). According to the Polish Commercial Companies’
Code, the minimum founding capital of:
Existing
companies, which have a share capital lower than the minimum applicable
up to 31 December 2000, will, over a period of up to 5 years, have to
increase their basic share capital up to the new minimum. Contributions of a foreign investor to the
company's capital may be made in-kind, in cash (in PLN obtained from
documented sources) or in foreign currency transferred by the foreign
investor through a foreign bank. Contribution in-kind to a joint stock
company is inspected by court-appointed experts. Fixed assets, which
are the contribution in kind of a foreign shareholder may be exempted
from customs duty. Please note, however the changes in the Customs Code
of 9 January 1997 introduced by the Law of 22 December 2000 on Changing
Customs Code and VAT and Excise Tax Law, which replace this provision
with a much more restrictive one, pertaining to entrepreneurs transferring
their operations to Poland from abroad. These changes enter into force
as of 1 January 2002. After the annual balance sheet has been approved
by the shareholders (and audited if the company is subject to statutory
audit) a foreign shareholder is entitled to transfer abroad the whole
of his share of the after tax profit. Foreign investors are also allowed
to transfer abroad proceeds from the sale of stocks and shares, and
other assets or compensations received. Companies are free to employ
whoever they may choose, including foreign nationals (subject to obtaining
a work permit), with pay terms at the discretion of the company (subject
to minimum wages legislation). Foreign employees are allowed to buy
foreign currency for the zlotys they earn in Poland and transfer the
currency abroad. Alternatively, the employer may transfer the pay net
of taxes direct to the employees' foreign bank account. The banks may
however require proof of payment of any taxes due. The interests and rights of foreign investors
as well as their property are protected by law. Poland has signed bilateral
agreements on the protection and promotion of foreign investments with
a number of countries. Foreign investors are guaranteed compensation
in the case of nationalisation or expropriation of their property. Poland
is also a member of MIGA and OECD. Radical changes resulted from the Law on Economic Activity of 19 November 1999, which is in force as of 1 January 2001. This law provides for equal treatment of Polish and foreign citizens with regards to business activity, on the basis of reciprocity. However, even in instances where there is no reciprocity, foreign subjects now have a wider choice of legal forms to select for their economic activity in Poland, since they are now able to conduct operations in the form of a limited partnership.
The
Polish Agency for Foreign Investment was established by the Polish government
in order to actively promote Poland's investment opportunities and encourage
foreign companies to choose Poland as their investment location. It
has three major objectives: to help foreign companies to invest in Poland,
to promote Poland as an attractive place for investment and to advise
Polish authorities on how to improve laws relating to foreign investment.
PAIZ offers a wide range of information, advice and guidance services
to prospective foreign investors free of charge. There are three state entities responsible for privatisation of the Polish economy, and thus dealing with foreign investors taking part in it. Naturally, the most important is the Ministry of the Treasury. The other two are specialised agencies, the Privatisation Agency and the Agricultural Property Agency of the State Treasury. To
some extent promotion of foreign investments in Poland is also carried
out by the Polish Chamber of Commerce and other, sectoral and bilateral
chambers. The
Warsaw Office of the United Nations Industrial Development Organization
(UNIDO), which offers its assistance to individual potential foreign
investors also plays an important role in the promotion of foreign direct
investment. By opening its Investment and Technology Promotion Office
in Warsaw in 1983, UNIDO became one of the first international organisations
to establish close relations with Poland. The
UNIDO Office in Warsaw has been very active in attracting foreign investors
to Poland. Already in the late 1980s it organised International Investors'
Forums, which enabled the international business and financial community
to get acquainted with the investment environment and opportunities
in Poland.
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