The Constitution for Business and its implications for foreign investors

Thursday 12 April 2018 - 08u32

In February 2018 information portal US News published the ranking of the best countries of 2018 to invest in. Poland was ranked 3rd best country in the world for investment, being the only European country in the top seven. One of the reason behind it is the anticipation of the World Bank that the Polish economy will be in good shape despite the turbulence in the region caused by Brexit and refugee crisis. In times of change and uncertainty, investors can find a stable and safe place in Poland.

In order to strengthen this effect the Polish government decided to reconstruct the general provisions relating to the performance of business activity in Poland. The proposed new legislation, so-called Constitution for Business is a set of laws regarding different aspects of conducting business activity.

The changes introduced by the Constitution for Business are inter alia:

  • a principle that what is not prohibited by law is legal
  • principle that public authorities are obliged to interpret all unclear provisions in favour of entrepreneurs (clause in dubio pro libertate)
  • appointment of Small and Medium Enterpreneurs Ombudsman who will be authorised to request public administration to clarify regulations as well as intervene in cases of breaches of entrepreneurs' rights
  • introduction of a new relief in social security contributions for new entrepreneurs
  • possibility of appointing permanent proxies by entrepreneurs being natural persons. Publication of information about appointing proxy in the entrepreneurs’ register shall be equivalent to granting power of attorney

What is important for foreign entrepreneurs a legal act is introduced concerning branches and representative offices of foreign entrepreneurs. Details in this respect are regulated by the Act of 26 January 2018 on the rules of participation of foreign entrepreneurs and other foreign persons in economic transactions. The fundamental aim of the new regulation is to provide a comprehensive rules of participation of foreign entrepreneurs and other foreign persons in economic transactions in the territory of the Republic of Poland by bringing these rules together in a single draft act.

So far dispersion of norms relating to foreign persons (including entrepreneurs) between several legal acts was not clear. The difficulties were raised not only considering the problem of identifying correct provisions, but also how provisions which co-existed in different acts influenced each other. Thus the implementing a single act regulating this matter will enable greater cohesion and integrity and is of considerable importance for the clear interpretation of the law.
The Constitution for Business is to enter into force in the first half of 2018.

Author: Adam BARBASIEWICZ – COTTYN lawyers Partner, Warsaw