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Poland

Foreign investments in PolandWierzbowski & Szubielska, Warsaw

On January 1 2001 Polish regulations relating to the creation and running of businesses will change dramatically with the coming into force of the Code of Commercial Companies and the Law of Economic Activity Act. The new legal environment will have an important impact on the situation of foreign entities engaged in or willing to start business in Poland.

Until the end of this year foreign entities will be allowed to run economic activity solely by means of a limited liability company or a joint stock company either by forming or participating in one or both of these types of companies. From January 1 2001, by virtue of the Law of Economic Activity Act, it will be possible to run business in all legal forms provided by Polish law. Indeed, citizens of foreign countries, who received permits to settle in Poland, will have the same rights as Polish citizens to start and conduct business activity. A similar principle will apply to natural persons without the above-mentioned permits and legal persons, which will be entitled to run businesses by virtue of the principle of reciprocity, unless international conventions ratified by Poland provide otherwise. If there is a lack of reciprocity in Poland's relations with a country, only the forms of limited partnerships, limited liability companies and joint stock companies will be allowed. The Law of Economic Activity Act also provides that if a foreign entity is interested in running its business directly, ie without forming a company in Poland, it can establish a branch.

Ludomir Biedecki

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