Country snapshot

Trends and climate

What is the current state of the M&A market in your jurisdiction?

The M&A market in Poland has been growing for a long time; however, growth speed has differed depending on the period. Recently, the driving force behind the market was large consolidations and acquisitions carried out in the banking and fuel sectors, mainly at the initiative of institutional or state-owned entities – for example, the acquisition of Raiffeisen Bank Polska by BNP Paribas, the acquisition of part of Deutsche Bank Polska by Santander Bank and the largest M&A transaction in 2018 by the Orlen Group in Czech Unipetrol. However, significant activity in e-commerce and food has also been observed. The year 2018, with its good economic climate based on the excellent results of the Polish economy, brought a decline in the value of the transaction in relation to the previous period.

Have any significant economic or political developments affected the M&A market in your jurisdiction over the past 12 months?

The development of the M&A market in Poland is undoubtedly favoured by continuous and relatively high economic growth. On the other hand, the long-sustained social and political revolutions in Europe and Poland related to the emergence of a new European order have had a cooling effect on the market.

Are any sectors experiencing significant M&A activity?

In addition to the public sector (eg, the acquisition in 2018 of Czech Unipetrol by the Orlen Group and the ongoing consolidation in the domestic banking market), the IT industry (broadly understood to include telecoms, e-commerce, smart homes and offices, and e-payments) has seen activity.

Are there any proposals for legal reform in your jurisdiction?

There are no plans for significant legislative changes in M&A regulation in Poland in the near future.

Legal framework


What legislation governs M&A in your jurisdiction?

The principal laws governing mergers and acquisitions in Poland are as follows:

  • the Civil Code;
  • the Code of Commercial Companies;
  • the Act on Competition and Consumer Protection;
  • the Financial Instruments Trading Act;
  • the EU Alternative Investment Fund Managers Directive (2011/61/EU);
  • the Act on Capital Market Supervision; and
  • the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading and Public Companies.


How is the M&A market regulated?

Mergers and acquisitions in Poland are not subject to any specific regulation. The basic provisions governing M&A are included in the Code of Commercial Companies and the Civil Code. The regulatory area is completed by anti-monopoly laws, such as the acts on competition and consumer protection regulating the conditions of concentration and exploitation of the market position. The national anti-monopoly regulations are harmonised with  EU regulations and delegate regulatory powers to a market regulator such as the European Commission, which rules on the largest concentrations. In addition to civil and public regulations, the stock market, public offers, investment funds, alternative funds and investment companies are regulated by Polish legislation as a result of the implementation of the EU Alternative Investment Fund Managers Directive.

Are there specific rules for particular sectors?

The key regulatory agency involved in the Polish M&A market is the Office of Competition and Consumer Protection, which has regulatory oversight over merger control and general anti-monopoly regulation. In some circumstances the Ministry of the Interior controls foreign investments into strategic sectors of the economy. Other state authorities may also be involved, depending on the sector. The following circumstances may affect the application of the relevant regulations:

  • the nature of the transaction (eg, the size of the acquired stake or transaction structure);
  • the parties to the transaction (eg, foreign entities, national legal entities and national natural persons);
  • the economic sector in which the target is operating (eg, energy or mining); and
  • the types of asset involved in transaction (eg, agricultural land).

Types of acquisition

What are the different ways to acquire a company in your jurisdiction?

Acquisition of a company may take place either through a capital transaction or a transaction on its assets. Within equity transactions, there are share purchase transactions and mergers that lead to the takeover of control over a company by incorporation of its structure with another entity or under a new entity. An alternative way to acquire a company is to acquire its business or an organised part of its business. This form of transaction leads to the acquisition of a specific set of assets enabling independent conduct of a specific business activity. However, due to the fact that this kind of transaction concerns only assets, this acquisition does not result in the buyer automatically acquiring all rights and obligations of the acquired enterprise.


Due diligence requirements

What due diligence is necessary for buyers?

As part of the transaction process, due diligence is usually carried out in areas adapted to the nature of the business conducted by the acquired company. Standard due diligence studies include legal examination, tax, financial and accounting examination, environmental research, technical examination, IT security and GDPR compliance audit, and logistic audit. Depending on the specific conditions of the transaction or the specific area of the market in which the entity operates, the scope of each test and the areas of examination may change.


What information is available to buyers?

In private company sale transactions (other than public companies listed on the stock exchange), the scope of information available to buyers varies depending on the type of transaction and the nature of the buyer. The range of information provided as part of an individual sale transaction conducted with an individual interested buyer is different from the case of an organised competitive process. Similarly, the scope of information provided will differ when the potential buyer is a financial investor from when it is an industry investor, which significantly increases the potential risk of unauthorised use. Usually, the information is made available on the basis of the questionnaire prepared by the buyer's advisers and contains all key areas to enable an assessment of the terms of the transaction and its structure on the one hand, and the risks associated with the transaction on the other.

What information can and cannot be disclosed when dealing with a public company?

The scope of information available from public companies listed on the stock exchange is usually much broader than that from private companies. This is due to the principle of transparency and the obligation to inform shareholders about the condition of the company. Transparency is governed by the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading and Public Companies; pursuant to these provisions, each public company publishes information about the company's financial standing, company condition reports and management announcements.


How is stakebuilding regulated?

The increase of ownership packages in companies is subject to the Code of Commercial Companies, which requires companies to notify subsidiaries of the formation of a dominant relationship with the parent entity. The acquisition of control over a company through the acquisition of a significant block of shares may in some cases fall under the jurisdiction of the Office of Competition and Consumer Protection and the Financial Supervision Committee. Transactions as a result of which the buyer will acquire an equity packet of shares may result in legal obligations such as the obligatory repurchase of shares from minority shareholders.


Preliminary agreements

What preliminary agreements are commonly drafted?

The documents signed between the parties to the transaction at its initial or preparatory stage are various types of agreement and statement regulating the principles of transaction evaluation, preparation for it and proceeding towards its implementation. None of these documents are mandatory by law, but constitute good investor practice. At least one of the following should be included:

  • letter of intent;
  • memorandum of understanding;
  • a confidentiality agreement; and
  • agreements on the non-use of data and information.

Principal documentation

What documents are required?

The scope and type of transaction documentation used varies depending on the type of the transaction, the industry in which the transaction is carried out and the status of its participants. In the most general terms, however, the standard scope of transaction documentation includes:

  • a main contract in the preliminary (conditional or final) variant;
  • a partnership;
  • an investment agreement;
  • clauses and agreements on corporate governance and ownership/investor supervision;
  • optional agreements;
  • collateral agreements; and
  • power of attorney and authorisation to perform specific activities.

Which side normally prepares the first drafts?

It is common practice for the original versions of transaction documentation to be prepared by the buyer. A different practice applies to organised auction proceedings, where the documents are proposed by the seller's adviser.

What are the substantive clauses that comprise an acquisition agreement?

The fundamental feature of the acquisition agreement is its structure, which reflects the structure of the transaction. The content of sales contracts in Poland is not standardised by law. The nature and content of this type of contract have been informed by M&A practice and are fundamentally based on Western law models.

The main clauses in sale contracts include:

  • statements and guarantees, including a description of the company and its enterprise status;
  • liability clauses and indemnification clauses;
  • substantive liability clauses;
  • clauses for price calculation and adjustment;
  • suspension conditions clauses;
  • regulations regarding the transitional period, including material adverse change clauses;
  • closing procedures;
  • post-closing procedures;
  • confidentiality;
  • exclusivity; and
  • applicable law and jurisdiction.

What provisions are made for deal protection?

There are various mechanisms and clauses securing transactions in various areas:

  • Securing the transaction:
    • deposit;
    • advance;
    • contractual penalties;
    • authorisations for replacement performances; and
    • exclusive liabilities.
  • Security for the payment of the price:
    • bank deposit;
    • notary deposit;
    • guarantees and sureties;
    • joint and several liability; and
    • bills of exchange and the rigor of submission to execution.
  • Security for the implementation of transaction obligations:
    • reserve ownership of shares until the price is paid;
    • instruments of cancellation and extinction of rights; and
    • power of attorney and authorisation.
  • Assignment of rights and options on rights.
  • Joint and several liability.  

Closing documentation

What documents are normally executed at signing and closing?

Signing and closing are characteristic for transactions in which there is a suspensive condition (ie, an event on which the completion of the transaction depends). Signing a contract is, from the formal point of view, a stage of a transaction in which all transaction elements and the content of all transaction documents are negotiated, although not all are signed or enter into force. The satisfaction of the condition precedent results in a closure where the transaction is completed and implemented.

The following take place at signature stage:

  • preliminary or conditional sale agreement;
  • documentation including corporate approvals;
  • agreements securing the execution of transactions;
  • catalogues of claims and guarantees;
  • confirmation of content of the virtual data room; and
  • initialising documentation that will carry out the transaction closing.

The following take place at closing stage:

  • the sale agreement;
  • contracts and hedging instruments;
  • notifications about the establishment of a dominance relationship;
  • adoption of resolutions regarding changes in the bodies of the company being acquired;
  • changes in the corporate governance of the acquired company;
  • transfer of corporate documentation of the acquired company; and
  • accompanying agreements (partners' agreement, non-competition, managerial contracts, post-closing commitments).

Are there formalities for the execution of documents by foreign companies?

If the transaction is signed in the form of a notarial deed, the participation of foreign entities will require the participation of a sworn translator. Information from the relevant register of entrepreneurs of such parties and authorisations will require a sworn translation into Polish and an apostille clause. Apart from this case, in principle, all documents can be prepared in Polish without the participation of an interpreter. The purchase of shares or stocks does not require a notarial deed, but signatures must be certified by a notary. However, the registration documents and power of attorney should be translated into Polish.

Are digital signatures binding and enforceable?

Despite the fact that electronic signatures exist in the Polish legal system (enabling the creation of a company in the electronic system of the national court register), in the practice of M&A transactions this type of transaction does not play a major role. This is mainly due to the fact that in the majority of cases, transaction documentation is signed with the participation of a notary and requires for its effectiveness a form higher than the standard one, which the electronic signature does not replace.

Foreign law and ownership

Foreign law

Can agreements provide for a foreign governing law?

In principle, there are no obstacles to the legal relationship being governed by the law of a foreign country (the EU Rome I Regulation (593/2008)). The exception is cases in which national laws enforce their jurisdiction, for example with respect to property sale contracts. In terms of M&A transactions, parties may submit binding legal relations to any chosen foreign law. However, this freedom is limited if one of the parties is not an EU citizen. In such case, the chosen law must have a connection with the legal relationship (eg, through citizenship or the registered office of the transaction party).

Foreign ownership

What provisions and/or restrictions are there for foreign ownership?

Apart from the issue of possible consent for a concentration, which is not assessed on the basis of the country of origin of an investor in the transaction, the freedom of contracting under the M&A transaction is limited in cases when the company subject to the transaction owns a property located in Poland. The acquisition of a controlling stake in a Polish company by an entity outside the Organisation for Economic Cooperation and Development (OECD) requires the administrative consent of the Ministry of Interior and Administration to be valid. However, if the property is of an agricultural nature, the restrictions are much broader and extend also to the OECD countries and the EU member states.  

Valuation and consideration


How are companies valued?

There are three main methods of company valuation:

  • the property method;
  • the income method; and
  • comparative methods

The choice of the valuation method depends mainly on the nature of the enterprise and the business, the type of transaction and the investor's expectations.


What types of consideration can be offered?

In principle, there are no restrictions as to the permissible form of consideration. The most common form of consideration is a pecuniary payment, although there are also frequent cases of consideration in kind and exchange. It is important that in the sale transaction the price or method of calculating the price should be determined.


General tips

What issues must be considered when preparing a company for sale?

One of the basic issues is to determine the purpose of the transaction and the potential group of investors (if the transaction is to be organised in the form of an auction). The next step should be the preparation of the preferred transaction structure and its possible variants, taking into account their effects in the area of the company itself and the owner. It is also highly recommended to conduct a due diligence analysis that will allow the company to prepare for sale and eliminate any risks that could be captured by buyer advisers and as such affect the valuation of the company.  

What tips would you give when negotiating a deal?

Companies should do the following when negotiating a deal:

  • Have a clearly defined goal.
  • Have recognised alternative scenarios to be handled by negotiation, and be prepared for the consequences.
  • Have at least two alternative negotiation proposals prepared.
  • Be prepared for every negotiation and have information from all areas of specialisation (legal, financial, tax, technical, business).
  • Remember that each element of the transaction affects the final shape and result of the entire transaction.   

Hostile takeovers

Are hostile takeovers permitted and what are the possible strategies for the target?

Under Polish legislation, a hostile takeover is permitted unless it fulfils the hallmarks of a specific economic crime (eg, failure to fulfil obligations, abuse of rights). Defence strategies include:

  • financial strategies (eg, overestimation of assets, payment of dividends, announcement of good news);
  • restructuring strategies (eg, asset sales, management changes, managerial buyouts, debt moderation);
  • the white knight strategy;
  • the poison pill strategy; and
  • institutional strategies (eg, seeking protection from the stock exchange, anti-monopoly office or the courts).

Warranties and indemnities

Scope of warranties

What do warranties and indemnities typically cover and how should they be negotiated?

In principle, statements and warranties should cover the entire scope of the company's business in all areas of its business, including statutory issues and share ownership. The specific scope of guarantees and declarations is determined by the nature of the transaction and the profile of the company's operations. The standard scope covers the following matters:

  • title to shares and statutory matters;
  • taxes and finances;
  • real estate;
  • contracts;
  • labour law;
  • intellectual property;
  • disputes;
  • competition law;
  • environmental protection; and
  • the EU General Data Protection Regulation.

When negotiating statements and guarantees, it is necessary to know the results of due diligence research and negotiate them taking into account the practical aspects. Under Polish law there is no statutory system of liability for statements and warranties in the sale of companies, because the statutory liability of the seller's shares covers only defects of rights to shares, but not the faults of the business and enterprise itself. Therefore, it is crucial to negotiate a coherent and effective seller's liability system in this respect.

Limitations and remedies

Are there limitations on warranties?

The usual limitations of liability for claims and warranties include:

  • temporary restrictions on the duration of liability and the filing of claims;
  • restrictions on the maximum amount of liability and the amount of the minimum claim;
  • buyer knowledge;
  • seller knowledge;
  • a prohibition of recognition of the claim; and
  • principles of defence against claims of third parties.

What are the remedies for a breach of warranty?

The following remedies apply:

  • compensation;
  • contractual penalty;
  • withdrawal or termination of the contract; and
  • substitute execution.

Are there time limits or restrictions for bringing claims under warranties?

Contractual deadlines for claims against statements and warranties may be freely determined; however, it must be borne in mind that under Polish law, statutory limitation periods for property claims cannot be shortened or extended.

Tax and fees

Considerations and rates

What are the tax considerations (including any applicable rates)?

The following tax laws may apply to M&A transactions:

  • the Act on Corporate Income Tax (CIT);
  • the Act on Tax on Civil Law Transactions (PCC);
  • the Act on Goods and Services Tax; and
  • the Tax Ordinance.

AcquisitionThe sale of shares in a Polish company is subject to PCC on transactions in the amount of 1% of the market value of these share rights. The PCC taxpayer is the share buyer.

Pursuant to the CIT Act, expenses for purchase of shares and stocks do not constitute tax deductible costs at the time of acquisition or subscription of such shares and stocks. Recognition of these expenses as tax deductible costs is possible only when the shares and stocks are sold.

The company selling shares and stocks is obliged to pay CIT on income derived from the sale of shares and stocks set as the difference between the revenue from the sale of shares and stocks (mostly, it is the selling price) and the costs of obtaining revenues. Income from the sale of shares and stocks is taxed in accordance with the general rules according to the 19% CIT rate.

MergerThe Tax Ordinance introduces the principle of general succession, according to which a legal person created as a result of a merger of legal persons assumes all rights and obligations provided for in the tax law regulations. An exception to the principle of general succession in the case of a merger is the inability of the acquiring company to settle the newly created tax loss suffered by the acquired company.

Mostly, the merger of capital companies with their registered office in Poland, the European Union or the European Economic Area is neutral in regard to CIT. The merger of limited companies is not subject to value added tax. The merger of capital companies is also neutral from the point of view of PCC.

Exemptions and mitigation

Are any tax exemptions or reliefs available?

The sale of shares is exempt from PCC when it is:

  • sold to investment companies and foreign investment companies;
  • carried out through investment companies or foreign investment companies;
  • carried out as part of organised trading;
  • carried out outside the turnover organised by investment firms and foreign investment companies, if these rights were acquired by these companies as part of organised trading.

What are the common methods used to mitigate tax liability?

The primary method of limiting tax liability is a thorough due diligence study secured by the seller's declaration and assurance system.

The Polish tax system provides for the possibility of applying to the tax authorities for individual tax interpretation, which after the release (if it is applied by the taxpayer) cannot result in negative or unexpected obligations for the taxpayer.


What fees are likely to be involved?

In the case of acquisition of shares the buyer will be required to pay court fees related to the registration of the share owner change (acquisition of shares) and, in some cases, the acquisition of a significant block of shares.

In the case of merger, in addition to court fees, when the merger is registered in the relevant register of entrepreneurs the costs of auditing the merger plan by the statutory auditor must be paid. 

Management and directors

Management buy-outs

What are the rules on management buy-outs?

Management buy-outs are not regulated by Polish law. It is customary, however, that such transactions within the scope of the seller's liability are simpler because the management board runs the company's business and it is difficult to impose on the owner of the company the responsibility for the risks arising from that business. In the majority of cases, making a management buy-out requires cooperation and good relations with the owner due to the financing model.  

Directors’ duties

What duties do directors have in relation to M&A?

In M&A transactions, any management of the company that is not the management board is not liable for the sale. However, the role of the board is important. The management board is often the key management of the company and as such, has a significant impact on the company's valuation. The role of the management board is also to ensure a smooth transition of the company to new ownership and to maintain uninterrupted activity during the transaction's implementation, both during the transitional period and after its implementation.  


Consultation and transfer

How are employees involved in the process?

Employees do not play a significant role in M&A transactions under Polish law – it is not necessary to notify employees about a potential acquisition or seek their approval. At the same time, the target should review employment contracts with its key employees. 

What rules govern the transfer of employees to a buyer?

If the subject of the M&A transaction is the company's shares, the situation of employees does not change. A different situation occurs when the subject of the transaction is the assets of the company, in particular its business. This situation, however, is not classified as an M&A transaction.


What are the rules in relation to company pension rights in the event of an acquisition?

If the subject of the M&A transaction is the company's shares, the situation of employees does not change. A different situation occurs when the subject of the transaction is the assets of the company, in particular its business. This situation, however, is not classified as an M&A transaction.

Other relevant considerations


What legislation governs competition issues relating to M&A?

The following regulations should be taken into account in M&A transactions:

  • the Civil Code;
  • the Code of Commercial Companies;
  • the Act on Competition and Consumer Protection;
  • the Financial Instruments Trading Act;
  • the EU Alternative Investment Fund Managers Directive (2011/61/EU);
  • the Act on Capital Market Supervision;
  • the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading and Public Companies;
  • the Act on Acquisition of Real Estate by Foreigners; and
  • other industry regulations depending on the specific transaction.


Are any anti-bribery provisions in force?

The Polish legal system combats corruption with the following legal acts:

  • the Penal Code;
  • the Penal Fiscal Code;
  • the Act on the Liability of Collective Entities for Acts Prohibited Under Penalty;
  • the Code of Commercial Companies; and
  • the Public Procurement Law.


What happens if the company being bought is in receivership or bankrupt?

Polish law does not explicitly prohibit entering into a share deal when the target is declared bankrupt or when a bankruptcy petition is filed against it. However, bankruptcy measures are mainly focused on selling assets of the company, rather than the company itself.

In the vast majority of cases, the initiation of bankruptcy proceedings results in the liquidation of the entity and distribution of its assets among its creditors.

The repayment of creditors and the fulfilment of the obligations on which the declaration of bankruptcy is based may lead to the repeal of bankruptcy proceedings, resulting in the restoration of the proper functioning of the company.