Transcript Slajd 1 - Krajowa Izba Gospodarcza

Legal aspects of doing business
in Poland
Krzysztof Wierzbowski, Managing Partner
18 marca 2014
2
Table of contents
Introduction
• The rule of economic freedom
• Prospects for foreign investments in Poland
• Concessions in Poland
Legal forms of doing business in Poland
• Forms of business activity permitted under Polish law
• The most common legal forms of doing business in Poland
among foreign investors
– a representative office
– a branch office
– a limited liability company / a joint stock company
• European Company (Societas Europea)
Other issue of importance
• Special Economic Zones (SEZ)
3
Introduction
• The rule of economic freedom
Since Poland's accession to the European Union on 1 May 2004,
all foreign persons (corporate and individual) from EU countries,
as well as persons belonging to the European Economic Area
(EEA), are allowed to establish and conduct a business activity
under the same rules as Polish entrepreneurs.
Pursuant to Article 50 of the TFEU, each entrepreneur within the
European Community has the right to choose from among the
various forms of business activity the one he finds most suitable
for his business. With this regard, the Member States are
obliged to realise the rule of economic freedom.
4
Prospects for foreign investments in Poland
According to the
World Investment
Report published by
UN agencies on Trade
and Development
(UNCTAD) in 2013,
in next two years
Poland will be 4th
in Europe and 14th
most attractive
economy in the
world.
5
Concessions in Poland
• Currently there are only a few types of business activities
that require concessions. Concessions are granted for an
indefinite period of time by the competent Minister,
in principle.
• However, concessions granted for conducting certain
business activities are for fixed term(3-50 years).
There is a stamp duty imposed on obtaining a concession,
value of which vary depending on type of concession.
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Concessions in Poland
Types of businesses activities requiring a concession:
– mining industry
– production and trade in explosives, weapon, ammunition
and products/technology for police and army
– production, processing, storage, distribution and trade
of fuel and energy
– private security services
– dissemination of radio and TV programmes
– air transport
– operation of gambling houses
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Forms of business activity
permitted under Polish law
•
•
•
•
•
•
•
•
•
•
a sole proprietorship (subject to notification in the Central
Registration and Information on Business)
a partnership
a registered partnership
a limited partnership
a limited joint-stock partnership
a professional partnership
a limited liability company
a joint-stock company
a branch office
a representative office
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Legal forms of doing business in Poland
• The most important factors determining the choice of the legal
form of business are: the scope and nature of business to be
conducted in Poland, requirements for initial share capital and
its further increase, scope of shareholders’ liability, legal
formalities and costs related to establishing and conducting
a business operation in Poland.
• Poland still has rather formalised rules for establishing
a business. The process of setting up a company may be long
(up to 1 month), but things are improving in this respect.
• In recent years the process of setting up a sole proprietorship
has been simplified significantly. Currently, own business may
be established via Internet.
9
Legal forms of doing business in Poland
• The most common legal forms of doing business in Poland
among foreign investors
– a representative office
– a branch office
– a limited liability company
– a joint stock company
10
A representative office
• The scope of the representative office’s activity is limited
exclusively to marketing and promotional activities, no trading
or manufacturing is allowed.
• Representative offices are obliged to keep books and records
according to Polish accounting and tax law requirements.
• Representative office must be entered into the Register of Foreign
Company Representative Offices maintained by the Minister of
Economy.
• The official cost of registering a representative office by the
Minister of Economy is PLN 1,000 (approx. EUR 240)
• Timing: up to two weeks after submitting a complete application
to the Minister of Economy
11
A branch office
• A branch office is treated as a part of the parent company.
It may be engaged in almost any kind of business activity,
provided that it is identical (or narrower) than the one
conducted by its parent company.
• A foreign entrepreneur is obliged to nominate his
representative in the branch who deals with „internal affairs”,
i.e. between an entrepreneur and his branch. Hence, in order
to represent a foreign entrepreneur before third parties,
separate power of attorney is required.
• A branch office may commence its business activity after
being registered in the National Court Register, obtaining
a statistical number and registering for tax purposes.
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A branch office
• Official costs: approximately EUR 143, including the PLN 500
(approx. EUR 119) court fee for entering the branch office into
the National Court Register and the cost of publishing an
announcement in the official gazette – PLN 100 (approx. EUR
24).
• Timing: the registration of a branch office in the National Court
Register takes up to three weeks from the date on which the
complete application is submitted.
13
A limited liability company / a joint stock company
• The Companies Code attributes corporate identity to both of
these types of companies. In principle, shareholders are not
liable for the company’s obligations, and their risk is limited to
the value of contributed shares.
• One of the key requirements is a PLN 5,000 (approx. EUR
1,195) contribution as initial share capital for setting up
a limited liability company and a PLN 100,000 (approx.
EUR 23,890) contribution as initial share capital for setting
up a joint-stock company.
• A limited liability company gives shareholders biggest influence
on a management board (for example a right to an individual
control).
• Generally a joint-stock company is a form for a biggest
business with numerous of shareholders.
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A limited liability company / a joint stock company
• A company is registered in the National Court Register
upon a written application accompanied by documents
such as a notarial deed on establishing a company in
Poland and specimen signature of the Management Board
members of the Polish company. A company shall submit
an application to a relevant tax office for a NIP (tax
identification number) and an application to statistical
office for a REGON (Polish National Business Registry
Number). All applications are submitted in the National
Court Register.
• A company must be registered within 6 months since the
conclusion of articles of association.
15
A limited liability company / a joint stock company
• Official costs: a notary’s fee (on the notarial deed
establishing the company) – the exact amount depends
on the value of the initial share capital, but must not be
higher than PLN 10,000 (approx. EUR 2,390) – and a
National Court Register fee of PLN 600 (approx. EUR 143)
that includes: the register fee itself and a publication fee
on the entry into the register in the official gazette.
• Timing: registering a company in the National Court
Register takes up on average to three weeks from the date
on which the complete court application is submitted.
16
Pan-European enterprises
• In connection with Poland’s EU membership, it is also possible
to operate as a European Economic Interest Grouping (EEIG),
a European Company (SE) and a European Cooperative
Society (SCE).
• Poland has enacted a Law on the EEIG and SE as well as
a Law on the SCE; incorporating a EEIG and a SE has been
permitted since 19 May 2005, while a SCE – since 18 August
2006. Pan-European enterprises established in Poland (having
its registered seat in Poland) are registered in the National
Court Register (a SCE and a SE) and/or in Business Activity
Register (a EEIG).
• In setting up a Pan-European enterprise, rules set out
in relevant EU laws must be observed. Among other
requirements, these stipulate a minimum initial share capital
value of EUR 120,000 (a SE) and EUR 30,000 (a SCE).
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Other issue of importance:
Special Economic Zones (SEZ)
• There are currently 14 SEZs in Poland. In principle they will
be active until 31 December 2026 (the deadline imposed by
the Regulation of the Council of Ministers of 23 July 2013).
• A Special Economic Zone is a designated area in which
manufacturing or distribution activities can be conducted on
preferential terms. The purpose of SEZs is to support
regional development.
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Special Economic Zones (SEZ)
•
The main incentive for investing in one of the SEZs is tax
exemption (CIT or PIT) – up to 50% of the investment’s
value, applicable for the entrepreneur that in one of the
two consecutive years employed on average more than
250 employees and showed annual net sales of
goods/services/higher than the zloty equivalent of EUR
50,000,000 or a balance sheet asset value that exceeded
the zloty equivalent of EUR 43,000,000 at the end of
either of the two most recent years.
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Special Economic Zones (SEZ)
•
For small and medium-sized entrepreneur, the tax exemption
is increased by 20% and 10%, up to 70% and 60% of the
investment’s value respectively
•
A ”small entrepreneur” is defined as an entrepreneur that in one of
the two most recent financial years employed an average of fewer
than 50 employees and showed annual net sales of goods/services
no higher than the zloty equivalent of EUR 10,000,000, or a
balance sheet asset value that did not exceed the zloty equivalent
of EUR 10,000,000 at the end of either of two most recent years.
•
A ”medium entrepreneur” is defined as an entrepreneur that in at
least one of the two most recent financial years employed an
average of fewer than 250 employees and showed annual net sales
of goods/services not greater than the zloty equivalent of EUR
50,000,000, or a balance sheet asset value that did not exceed the
zloty equivalent of EUR 43,000,000 at the end of either of the two
recent years.
20
Special Economic Zones (SEZ)
The tax exemption is calculated separately in case of ”large
investment”. To be classified as ”large” the investment shall
fulfil all following conditions:
1. the investment is undertaken within 3 years by one or
several entrepreneurs,
2. the fixed assets are combined in an economically indivisible
way, and
3. the costs eligible for the aid exceed the zloty equivalent of
EUR 50,000,000.
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Special Economic Zones (SEZ)
The following incentives are possible in a SEZ:
– tax exemption (CIT or PIT)
– competitively priced plots of lands
– free assistance in handling formalities connected
with the planned investment
– exemption from real estate tax
22
Warsaw Stock Exchange
Dr Krzysztof Haładyj, Head of Banking & Finance
18 March 2014
23
Warsaw Stock Exchange
• the largest stock trading market in CEE
• different platforms of trading
– Main Market
– NewConnect
– Catalyst
• experience with foreign issuers (46 out of 451 listed)
• capitalisation of 866 billion PLN as of 5 March 2014
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Benefits of IPO
• raising funds
• bringing liquidity to shares
• receiving market valuation
• marketing and promotion
• providing alternative options for motivating key employees
• bringing transparency to organisation
25
Concerns related to IPO
• listing costs
• post-IPO costs related to a public company status
• disclosure obligations
• protection of minority shareholders
• responsibility towards investors
26
Legal Environment
• Polish law
– Act on Public Offering
– Act on Trading in Financial Instruments
• EU law
– European Commission Regulation (EC) No. 809/2004
• Listing rules
– WSE Rules
– NDS Rules
• Estonian law
– Regulations on disclosure obligations
27
IPO Process
• selecting advisors
• building up equity story
• preparation of financial statements
• legal, financial and business due dilligence
• drafting up the prospectus
• approval of prospectus in Estonia
• passporting prospectus th Poland
• role of Polish Commission, NDS and WSE
• admission to trading
• post-IPO
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Taxes in Poland
Karolina Stawowska, Tax Advisor, Partner
18 March 2014
29
Taxes in Poland
• Corporate Income Tax – 19%
• Personal Income Tax – 19%, 18% - 32%
• VAT – 23%, 8%, 0%
• Civil Law Activities Tax – 1%, 2%
There are also other taxes: excise tax, gambling tax, real estate
tax, stamp duty, donations and inheritance tax, etc.
In comparison with Estonia, taxes may not be a convincing
reason to invest in Poland 
30
Taxes in Poland
• Poland is a country where certain tax
structuring / tax optimisation schemes
are possible
• Wide treaty network
• Implemented EU Tax Directives
31
Taxes in Poland
• Tax treatment of specific transaction can be at minimum
cost secured (confirmed with tax authorities) in an individual
binding tax interpretation
• General Tax Rulings are issued by the Ministry of Finance
• Advanced Pricing Agreements – contract, usually for multiple
years, between the taxpayer and tax authority specifying
the pricing method that the taxpayer will apply to its related
company transactions (proactive way or resolving potential
tax disputes over transfer pricing). Fee: approximately 1% of
the transaction value but not more than approx. EUR 50,000
32
Taxes in Poland
• Thin capitalization rules: 3:1 debt to equity ratio but there
are ways to help taxpayers on this issue…
• Fees for management services – generally tax deductible
• No CFC rules introduced so far
33
Public procurement in Poland
Tomasz Zalewski, Head of Public Procurement
18 March 2014
34
Public procurement volume in EU in 2013
13%!
26,64%
73,36%
100%
35
23 144 procurements in Poland in 2013
36
Public procurement volume in Poland in 2012
• 188.478 tender notices published in 2012 within Poland
(Tenders published in OJEU and the Public Procurement Bulletin)
• Market value: over PLN 132,7 billion in 2012
37
Public procurement volume
• 86,87% of procurements in Poland proceeded in the open
tender
• Negotiations without publication (including single source
procedure) – 9,22%, negotiated procedure – 0,99%,
restricted tender – 2,53%, competitive dialogue – 0,10%
• In 704 cases (2,93%) contracts were awarded to foreign
contractors
38
Legal regulations
• Polish public procurement law Act dated 24.01.2004 (PPL Act)
and secondary regulations, implementing EU Directives
2004/17/EC (classic procurements), 2004/18/EC (sector
procurements), 2009/81/EC (Defence & security procurements)
and 2007/66/EC (remedy directive) – in case of procurements
which value exceeds EUR 14,000
• Polish PPL act coherent with EU law and case law of the
Court of Justice of the European Union
• PPL Act safeguards the principles of transparency, fair and
open competition, equal treatment of bidders
39
Where to look for tender notices
• BZP – Public Procurement Bulletin in case of procurements
which value is lower than EU thresholds
• OJEU- Official Journal of the European Union in case of
procurements which value is equal or exceeds EU thresholds
EU thresholds are:
• finance sector: EUR 134,000 for supplies and services and
EUR 5,186,000 for construction works
• non-government sector: EUR 207,000 for supplies and
services and EUR 5,186,000 for construction works
• sector and defence & security awarding entities:
414,000 for supplies and services and EUR 5,186,000 for
construction works
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How to compete for
a public tender in Poland
41
Main award procedures
•
Technical dialogue – pre-tender consultations
(not obligatory)
•
Open tender – one stage
•
Restricted tender – two stages
•
Negotiations with publication – three stages
42
Tender conditions to participate in bidding process
•
Legal capability – entry in commercial register, concessions
for performing activity in regulated markets
•
Knowledge and experience – connected and proportional
conditions pertainig to the performance of similar to the
tender object supplies, services or construction works
•
Technical capability – required for the performance of the
contract
•
Financial standing – insurance, financial capability, sales
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Tender conditions to participate in bidding process
•
Awarding entities may demand documents provided in the
Regulation of Prime Minister dated 19.02.2013 on the type
od documents which the awarding entity may demand from
contractors and forms in which such documents may be
submitted
•
Contractors may rely on capability of their group or other
contractors
•
Contractors may form consortia and compete together for
the award of the contract
•
Rules of the Tender are provided in the tender notice and
the Terms of Reference
44
Subcontracting
• As a general rule subcontracting is allowed
• In some cases the awarding entity may reserve a part
of the contract to be performed by the contractor himself,
if it is appropriate to the nature of the contract
• Subcontractors may be changed during the performance
of the contract, subject that if the contractor relied on the
resources of the subcontractor during the tender procedure,
the new subcontractor must meet the tender conditions as
provided in ToR
• PPL and Civil Code regulations provide for provisions
safeguarding the position of subcontractors
45
Award criteria
•
Lowest price – 90%
Other award criteria:
•
Example 1: Guarantee period
•
Example 2: Period of performance
•
Example 3: Technical parameters
•
Example 4: Cost efectivness
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Legal remedies
•
Appeal to the National Appeals Chamber (limited in case
of tenders which value is lower than EU thresholds)
•
Limited time for filing appeals – i.e. 10 days from the award
of the contract
•
NAC reviews the appeal within 15 days from receiving it
(public hearing before NAC)
•
Small costs of cases before NAC (court fee EUR 4,000 in case
of supplies and services or EUR 5,000 in case of construction
works of value equal or exceeding EU thresholds)
•
Judgments of NAC are subject to review by circuit courts
– substantially bigger costs – court fee 5% of the contract
value up to EUR 1,25 mln
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Feel free to contact us
Krzysztof Wierzbowski
[email protected]
+48 22 50 50 722
Dr. Krzysztof Haładyj
[email protected]
+48 22 50 50 731
Karolina Stawowska
[email protected]
+48 22 50 50 746
Tomasz Zalewski
[email protected]
+48 22 50 50 796
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www.eversheds.pl