There is no need to convince anybody that in recent years sourcing capital from foreign investors by Polish companies has been hugely popular. The statistics published in January 2022 by the Central Centre for Economic Informationdemonstrate that by the beginning of the year over 90,000 companies with foreign capital were operating in Poland! The increase in foreign direct investment stimulates the economic situation and facilitates the development of many business ventures. However, it should not be forgotten that financing with foreign funds also involves a number of formalities, sometimes also restrictions and additional obligations. Therefore, what should you pay attention to when planning a transaction in order to avoid being surprised? 

1. Are you building relations with a foreign investor? These are the things to be borne in mind!

Sometimes a foreign investor appears at the stage of creating an entity, and sometimes they join the company after its creation, providing funds for development or protecting the entity from collapse.  Often, thanks to the involvement of foreign capital, a given company becomes more credible, which strengthens its position in negotiations with counterparties, which in turn bodes well for development. However, the process of taking up shares/stocks or provision of finance by a foreigner or foreign entity is not as simple as it might seem. What does it look like in practice? Are there any restrictions? Could all entities benefit from this form of financing? What about Alternative Investment Fund

Clients also inquire – could persons or entities from outside the territory of the Republic of Poland be AIS investors or could AIS act in the interest of investors from outside the territory of the Republic of Poland? Absolutely yes. There are no statutory contraindications, but there are some limitations  which should be kept in mind. These restrictions do not apply only to alternative investment funds, but to all entities obtaining funds from the so-called third countries. In this respect, it is prudent to determine from which country the investor comes and what percentage of shares/stocks (or what degree of control) in the company will belong to the foreigner (s) as a result of such a transaction. 

2. Obligatory permit 

In some cases, the acquisition of shares or stocks by a foreigner in a company in the territory of the Republic of Poland requires obtaining a permit from the minister competent for internal affairs. 

This concerns the following transactions:

  • purchase or acquisition of shares or stocks by a foreigner in a trading company with its registered office in the territory of the Republic of Poland (as well as any other legal action pertaining to shares or stocks), if as a result the company being the owner or perpetual usufructuary of the real estate in the territory of the Republic of Poland becomes a controlled company;
  • purchase or acquisition of shares or stocks by a foreigner in a trading company with its registered office in the territory of the Republic of Poland, being the owner or perpetual usufructuary of real estate in the territory of the Republic of Poland, if the company is a controlled company, and the shares or stocks are purchased or taken up by a foreigner who is not a shareholder or stockholder of the company.

Recognising that for the vast majority of (although one could risk stating that for almost all) entrepreneurs the above-mentioned provisions are a kind of legal gibberish, in which it is difficult to discern a simple message. And since we know perfectly well that the client needs specific information, here we shall proceed to explain what a controlled company is. Well, pursuant to the Act on the Acquisition of Real Estate by Foreigners, it is a company in which a foreigner or foreigners:

  • have the voting power of directly or indirectly more than 50% of the votes at the shareholders’ meeting or at the general shareholders’ meeting (not only as the owner of the shares, but also as a pledgee, usufructuary or on the basis of any agreements with other persons) 


  • have a dominant position within the meaning of the provisions of the Commercial Companies Code, for example, they are entitled to appoint or dismiss the majority of the management board members or the supervisory board of a subsidiary

To put it in a nutshell, in practice, it is therefore necessary to verify each time whether, as a result of the transaction on the shares of a Polish entity, a foreign investor will reach such a level of involvement in the company that would lead to qualifying it as a controlled company. 


Of course, there are exceptions to the principle described above, namely in some cases it is not required to go through the procedure and obtain a permit.

The exemption applies to cases where:

  • shares or stocks sold to a foreigner are admitted to trading on a regulated market;
  • the company is the owner or perpetual usufructuary of an independent residential/commercial premises with a garage use or share in the ownership in such premises, or undeveloped properties whose total area in the whole country does not exceed 0.4 ha within town or city limits;
  • the investor is a citizen or an entrepreneur of a state being party to an agreement on the European Economic Area or the Swiss Confederation. 

In conclusion, there is a difference between the restrictions on a company acquiring  a foreign investor from a member state of the European Union and restrictions on acquiring an investor from China or New York. Each actual state of affairs, must therefore be considered on a case-by-case basis, verifying whether there occur conditions for exemption from the obligation to obtain a permit from the competent authority. 

3. Limitations resulting from the Foreign Exchange Law 

Further restrictions, which may concern both the issue of raising capital from abroad and       investing in the assets of entities outside the territory of the Republic of Poland, are provided for in the Foreign Exchange Law. For example – in order to invest assets or acquire shares/stocks in a company with its registered office in China – one should obtain an appropriate foreign exchange permit – general or individual. Restrictions are not so “stringent” in relation to capital flows between the Republic of Poland and the member states of the European Union, or even the United States. This stems, of course, from the free movement of capital and payments between member states provided for by treaties. 

The situation is different in relation to the countries lying outside the zone where economic freedoms are in force, for example in Asia. This is particularly important from the perspective of the functioning of alternative investment funds and their pursuit of the objective of collecting assets and investing them in the interest of investors. Assuming, of course, that in such a factual state, the subject of investments would be assets located in third countries not being members of the European Union, the European Economic Area (EEA) or the Organisation for the Organisation for Economic Co-operation and Development (OECD). In such cases, we must consider foreign exchange regulations and remain vigilant when planning this kind of investment. 

Moreover, the Foreign Exchange Law also imposes restrictions on fund transfers by requiring the involvement of specialised institutions (which are authorised to provide payment services) to process transfers of funds. Restrictions apply if the amount of the transfer or the settlement in a foreign currency exceeds the equivalent of EUR 15,000. 

4. Mechanisms of controlling foreign investments in the territory of the Republic of Poland 

For almost 2 years, among others due to the SARS-COV-2 pandemic, stringent restrictions have applied to transactions resulting in the acquisition of a significant share in specific Polish companies by foreign entities. Restrictions apply to foreign investments (direct and indirect) in public limited companies, but also in selected companies operating e.g., in the energy, food and telecommunications industries

Transactions with the participation of investors from countries not belonging to the EU, EEA or OECD and companies controlled by entities from outside these areas are subject to monitoring. Investors from China and many other Asian countries, the Middle East and African countries are therefore subject of scrutiny.

Currently, companies that are subject to control include those which in one of the two years preceding the notification generated revenue in the amount exceeding EUR 10,000,000 in the territory of the Republic of Poland, and additionally meet one of the following criteria: 

  • they are public limited companies (regardless of the subject of their business activity);


  • they possess critical infrastructure at their disposal, i.e., ICT, energy supply, and healthcare systems etc., or provide (own/modify) software to operate these systems;


  • they conduct business activity in strategic industries – e.g., telecommunications, pharmaceutical, medical, food, chemical or energy industry.

Foreign investments made in the aforementioned companies (even at the stage of planning to acquire assets ensuring significant participation/domination) will require prior notification to the President of the Office of Competition and Consumer Protection. It refers to transactions, as a result of which a foreign investor will acquire: 

  • 20% (or more) of the shares/number of votes in the decision-making body of the capitalised company;
  • the ability to determine the directions of the operation of the capitalised company;

Interestingly and importantly, it is not only about achieving a dominant position in the entity by means of direct financing. Restrictions also extend to all indirect forms of achieving dominance through e.g., obtaining preferential rights, the right to share in the company’s profit, increasing the position as a result of the redemption of a company’s shares/stocks, or even asset dealtransactions (lease of the company).

There is no need to convince anyone that such mechanisms slow down the finalisation of investment processes.

5. Monitoring of foreign direct investments in the European Union

The monitoring framework for foreign direct investments in the European Union was established by Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019, which entered into force on 11 October 2020. 

The Regulation was introduced in response to the increasing degree of market integration between the countries belonging to the European Union and aims at monitoring foreign direct investments in order to detect potential threats to security or public order outside the member state in which such investments are made. 

The cooperation of the member states and the European Commission with regard to investment monitoring concerns all types of direct investments made by a foreign investor (from outside the European Union), which lead to the establishment/maintenance of permanent and direct links between this investor and the company in order to conduct business activity in a member state. This also applies to investments allowing participation in managing or supervising the company. 

The scope of the Regulation refers to situations when the acquisition of an EU company involves a direct investment by one or more entities domiciled outside the European Union. It does not cover those cases when investments are made by one or more entities domiciled in the EU. 

It is assumed that foreign direct investment can be made both in the form of the so-called greenfield investments (mainly the creation of new enterprises), as well as in the form of mergers and takeovers (i.e., the transfer of ownership in already existing assets to a foreign owner). They are monitored only for the reasons of security or public order – other reasons would go beyond the scope of the regulation.

What about internal restructuring of corporate groups?

Consequently, a number of doubts arise as to whether monitoring of transactions also applies to transactions conducted as part of the internal restructuring of groups of companies which conduct business in several different countries. Thus, for example, investments in which a foreign investor and a given company are controlled by one specific foreign company are not covered by the scope of the Regulation. These are cases when a parent company sells its shares in a given enterprise to its subsidiary or separates part of its business, thereby establishing a new subsidiary operating within the same corporate group.

6.    Attracting foreign investors – Summary

The dynamic growth of foreign investment in Polish entities, as well as investments of assets in foreign entities by Polish companies is definitely pleasing to the eye. Undoubtedly, it contributes to the development of many business ventures in individual sectors. However, in the heat of the race to raise capital for the implementation of plans/concepts of a specific entity, it should not be forgotten that in foreign exchange dealings there are certain restrictions and requirements necessary to meet in order to finalise the transaction safely and legally. The same principle applies also in the case of investing assets in foreign projects/products. Any entity interested in introducing a foreign investor to the company or in capitalising on the investment of an entity from outside the Republic of Poland should, therefore, determine beforehand what restrictions are connected with the implementation of its business plans. This will prevent far-reaching negative consequences of legal and fiscal nature.