Poland increases regulatory scrutiny of foreign direct investments in healthcare

Healthcare has inevitably become a major focus for national governments in light of the Coronavirus pandemic, which has led many nations to apply strict controls to Foreign Direct Investment (FDI).

The many new international rules surrounding FDI stretch beyond just the primary healthcare sectors and into fields, such as R&D, IT and the life sciences.

The impact of these new rules may complicate and potentially limit a business’s plans for cross-border M&A in certain sectors and they must be taken into account.

Even before the pandemic struck, FDI had become a focus for governments around the world, with many having already implemented new systems to limit opportunistic foreign takeovers of strategic and essential businesses.

In Poland, a temporary narrowing of FDI screening has been accelerated into a more robust process from 24 July, which will last for the next two years. 

Under this regime, FDI-related acquisitions of more than 20 per cent of the share capital of a Polish healthcare undertaking, such as the manufacturing of medicines and medical devices or health-related software, will be subject to review and screening. 

The new rules also require the target company in Poland to have an annual turnover of at least €10 million in one or both of the two years preceding the transaction or else it will also be subject to official review. 

The new rules also affect other key sectors, including:

  • electricity generation
  • storage of fuel and gas and other energy-related services and activities
  • telecoms
  • software development for strategic companies
  • technology concerning data transmission, payment services and cloud services.

Similarly, the UK has also accelerated reforms to rules regarding FDI to protect businesses that are critical to the Coronavirus response and future public health emergencies.

These new powers, under the Enterprise Act, will enable the Government to intervene if a business that is directly involved in the pandemic response is targeted for a foreign takeover.

These are intended as a temporary measure ahead of more comprehensive changes anticipated in the National Security and Investment Bill.

The EU will also introduce the FDI Regulation (2019/452) from 11 October this year, which will enable the European Commission to issue guidance to member states regarding their national screening procedures – creating a non-binding advisory role for the Commission. 

Whether you are a British business looking to invest in Poland or vice versa it is important that you understand the implications of these new FDI regulations. To find out how our Polish legal experts can assist you, please contact us


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