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Author: Kancelaria

New obligations of partnerships and companies: Central Register of Beneficial Owners

Posted on by Kancelaria

The Central Register of Beneficial Owners (hereinafter referred to as the “Register”) is supposed to be implemented in Poland on October 13, 2019. This is related to the Anti-Money Laundering and Counter-Terrorism Financing Act, which came into effect as of July 13, 2018 (the “AML Act”).

The establishment of the Register will entail additional obligations for partnerships and companies, as well as the possibility to impose a financial penalty for failure to meet those obligations.

Below you will find key assumptions related to the Register:

1. Partnerships and companies (except for professional partnerships [PL: spółki partnerskie] and public companies, as defined in the Act of July 29, 2005 on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading, and Public Companies) will be obliged to become listed in the Register.

2. Relevant submissions can be made by individuals authorized to represent partnerships/companies.

3. Entities which entered the National Court Register until October 13, 2019 will have to apply for an entry in the Register until April 13, 2020. Entities which entered the National Court Register after October 13, 2019 will have to apply for an entry in the Register within 7 business days of becoming listed in the National Court Register.

4. Submissions need to include the following:
a) the applicant’s own details, i.e. business name, legal form, registered office, KRS (National Court Register) number, and NIP (tax identification number); and
b) details of the beneficial owner and member of a corporate body or shareholder authorized to represent the partnerships/companies listed in article 58 of the AML Act, i.e. first and last name, nationality, country of residence, PESEL or date of birth (if no PESEL number has been assigned), and information about the shares or interest held by the beneficial owner.

5. In order to simplify the definition of the “beneficial owner,” provided in the AML Act, and for the purposes of this legal alert, we can assume that the beneficial owners of partnerships/companies are individuals who directly or indirectly hold over 25% shares/voting rights (incl. as a pledgee or user, or on the basis of arrangements with other holders of voting rights). In case it is impossible to determine (or there are doubts as regards) the identity of beneficial owners (e.g. due to a dispersed shareholding structure), and there is no suspicion of money laundering or financing of terrorism with respect to a given entity, it is presumed that the beneficial owners are individuals who hold senior management positions.

6. Along with the registration application, it is necessary to file a statement of accuracy of the data submitted with the Register. Such statement is subject to criminal liability for fraudulent misrepresentation.

7. The person submitting information about beneficial owners and updates to such information bears liability for damages resulting from publication of inadequate data with the Register.

8. The Register will be publicly available. The data included in it will be covered by the presumption of truthfulness. Information about beneficial owners can be obtained free of charge.

9. A partnership’s/company’s failure to meet the obligation to apply for an entry in the Register carries a fine of up to PLN 1,000,000.00.

Objectives of the Register:
1. Ensuring greater transparency of commercial transactions in Poland and across EU.
2. Identifying potential criminals or those who evade taxation by hiding behind complex corporate structures.
3. Offering access to comprehensive information about potential business partners.
4. Boosting the society’s trust in the reliability of the financial system and financial transactions.

It seems, however, that the Register will not be established until the deadline specified in the AML Act. As of the alert date, the Ministry of Finance released an announcement that the expected start date of the public tender for the Register’s implementation is Q4 2019.

In case of any questions about the issues presented herein or other AML or counter-terrorism financing matters, please feel free to get in touch with us.

Contact
Rafał Smolik
Associate
rafal.smolik@actlegal-bsww.com
+48 22 420 59 59

act BSWW advised Echo Investment on its Łódź-based project

Posted on by Kancelaria

Echo Investment, Poland’s leading developer, has laid the cornerstone for Fuzja, a section of Łódź that will combine modern urban features with the historical spirit of Księży Młyn (a complex of textile factories). The company has started restoring the former Scheibler factory.

The multi-stage project will see the development of residential, commercial and urban spaces. The investment area covers 7.7 hectares. The mixed-use project will offer approx. 90,000 m2, seamlessly blending different types of spaces into one development. This is going to be a new landmark in Łódź.

“Echo Investment’s strategy focuses on the so-called ‘destinations,’ i.e. locations that help cities grow, where people can work, live and spend their free time. While creating them, we make sure to respect their history. The investment project at Tymienieckiego street in Łódź is going to be one of them. It will cover nearly eight hectares on the site of the former Scheibler factory, with the historical power plant situated in its heart,” says Nicklas Lindberg.

The project will be made up of 20 buildings serving different functions, 14 of which are tastefully restored historical buildings. The historical building of the former power plant will be the beating heart of this area. The project also includes urban squares, common areas and green zones, with a total area of almost 4 ha.

act BSWW was advising Echo Investment on the acquisition of Elektrownia RE sp. z o.o., the company that owned the investment property. The scope of legal consulting services covered all stages of the transaction: legal and tax due diligence audit of the company and the property, followed by support in negotiations of transaction-related documents (incl. the share purchase agreement).

The law firm’s team was made up of Michał Wielhorski (team leader, Managing Partner at act BSWW), Katarzyna Marzec (Partner) and Mateusz Prokopiuk (Senior Associate).

“We are glad to advise on real estate projects that involve urban renewal. Thanks to them, historical sections of cities regain their former glory, turning into unique and bustling venues,” says Michał Wielhorski.

Practitioners’ Guide for M&A in Europe

Posted on by Kancelaria

A practical guide for international investors, managers and lawyers in English about the most important topics in cross-border transactions for the most relevant economies in continental Europe.

The guide, written by experienced act legal M&A lawyers, offers short and practical answers to legal, tax and financial issues that investors face connected to cross-border and domestic investments. In this comprehensive handbook we do not quote legal norms but briefly and comprehensively summarize the different aspects to be considered in a M&A transaction:

  • most important non-legal soft triggers for a successful acquisition
  • players in M&A transactions and transaction cost triggers
  • main transaction documents
  • purchase price
  • key employment issues and influence of employees and trade unions in a transaction
  • relevant types of legal entities
  • tax aspects
  • formal requirements for a transaction
  • share deal vs. asset deal
  • other special types of transactions
  • obligations / liabilities due to negotiations
  • disclosure obligations in connection with a transaction
  • legal restrictions on acquisitions
  • distressed transactions and acquisitions out of insolvency

Click here to receive a free sample of the M&A practitioners’ guide.

act BSWW advises Adventum on acquisition of Poznań Financial Centre

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Adventum, a real estate investment fund operating internationally, has acquired Poznań Financial Centre (PFC), marking the first investment the fund has made in Poland.

act BSWW was advising Adventum throughout the transaction involving the acquisition of shares in PFC. The scope of legal services included a due diligence audit of the real estate, preparation of transaction-related documents, as well as support in negotiations and transaction advisory.

The law firm’s project team was made up of Marek Wojnar (Managing Partner, attorney-at-law), Marta Kosiedowska (Partner, legal counsel), Mateusz Prokopiuk (Senior Associate, attorney-at-law) and Katarzyna Góra (Senior Associate, attorney-at-law).

“We appreciate having been given the chance to advise Adventum on their first acquisition in Poland. We hope it is the first in a string of successful projects,” says Marta Kosiedowska.

“Supporting a new player entering the Polish market is especially exciting. We are happy to be handling the Client’s subsequent transactions,” adds Marek Wojnar.

Poznań Financial Centre is an office building situated in the Old Town of Poznań. The seventeen-floor building has 18,000 sq.m. of gross leaseable area.

act BSWW advises Rank Progress on land acquisition for new investment project

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act BSWW has consulted on Rank Progress’ purchase of nearly 8 hectares of investment land worth over PLN 27m net.

On June 26, 2019, Progress XVIII sp. z o.o. – S.K.A., a subsidiary of Rank Progress S.A., entered into a preliminary agreement for acquisition of ownership title to a land lot of 7.9 ha with a view to developing a shopping mall.

The property is located in Otwock. The transaction value is PLN 27.6m.

The law firm’s team was led by Michał Wielhorski, Managing Partner. It was also made up of Katarzyna Marzec – Partner, and Mateusz Prokopiuk – Senior Associate.
“Rank Progress runs a range of investment projects involving acquisition of land in promising locations in various towns and smaller cities for the purpose of retail developments intended for lease or sale,” says Michał Wielhorski. “This is yet another project of this kind, on which we advise our Client,” he adds.

Rank Progress is an investment and development company which has become a market leader when it comes to construction of retail spaces. It is listed on the Warsaw Stock Exchange.

Amendments to Agricultural System Act

Posted on by Kancelaria

On 9 May 2019, the upper house of the Polish parliament (the Senate) adopted, without revisions, the Act of 26 April 2019 on Amendments to the Agricultural System Act and Selected Other Acts (the “Amendment”). The Amendment was subsequently signed by the Polish President on 27 May 2019.

It will come into force on 26 June 2019.

We have prepared an overview of key changes brought – in our opinion – by the new legislation, which will relax the restrictions on agricultural land transactions.

1. The list of cases to which the provisions of the Agricultural System Act do not apply was expanded to include, among others, agricultural land situated within the administrative boundaries of cities/towns, with respect to which a resolution on location of a residential project (as defined in the Facilitation of Preparation and Implementation of Residential Projects and Auxiliary Projects Act of 05 July 2018), or a resolution on location of an auxiliary project (as defined in the aforesaid Act) has been passed.

2. In accordance with the Amendment, agricultural land may be acquired by persons/entities other than individual farmers if the area of such farmland is below 1 ha.

3. The period over which agricultural land has to be used by its acquirer for agricultural purposes has been reduced from 10 to 5 years.

4. The definitions of ‘farm’ and ‘relative’ have been rephrased. Pursuant to the Amendment, a ‘farm’ should be understood to mean a “farm’ defined in the Polish Civil Code, in which the area of agricultural land or the total area of agricultural land lots is no less than 1 ha. As far as a ‘relative’ is concerned, the definition will now include stepchildren and parents’ siblings.

5. The Amendment names new entities entitled to apply for an agricultural land acquisition approval to the Director General of the National Support Centre for Agriculture. These include, among others:

– public higher education institutions – if the property is necessary for educational, research or development purposes, and will be put to agricultural use;

– those acquiring agricultural land for public purposes, as defined in the Property Management Act.

The requirements applicable to entities named in the Act before the Amendment, i.e. sellers of agricultural land and individuals intending to set up a family farm, have also been modified.

6. The Amendment elaborates on the procedure of and conditions for agricultural land acquisition approval (expressed in an administrative decision issued by the Director General of the National Support Centre for Agriculture) by setting forth the requirements that an application for approval needs to satisfy, and listing documents to be attached.

7. There are also changes to the right of first refusal and the acquisition right held by the National Support Centre for Agriculture.

8. The Amendment provides for the establishment of a system designed for free publication of agricultural land sale advertisements and responses to them, while also setting the rules of publication and basic requirements which such advertisements and responses should satisfy.

The changes outlined above reflect the general trend to make the rules applicable to agricultural land transactions more lax for certain entities and in specific cases.

If you have any questions about the issues discussed above or other changes to the Act, please feel free to get in touch with us any time.

Contact person
Michał Sołtyszewski
Attorney-at-law / Partner
michal.soltyszewski@actlegal-bsww.com
+48 22 420 59 59

act BSWW breakfast: New obligations of companies and liability of their corporate bodies

Posted on by Kancelaria

Compliance in practice:
How to stay safe? How to implement efficient procedures?

On 18 June 2019 we hosted the meeting combined with a discussion on how to get ready for the changes and take relevant actions.

Agenda:

  • Draft amendments to criminal law and their impact on business operations – requirement to introduce internal policies
  • Collective entity’s liability for offences – allocation of liability and ways to avoid it
  • Impact of a collective entity’s offence on potential criminal proceedings against members of its internal bodies
  • What is compliance? Definition and role of compliance in business operations
  • Practical aspects of implementation of compliance policies (internal regulations, training, manuals, bylaws, etc.)
  • Who is a whistleblower? Definition and protection of whistleblowers in light of the suggested amendments

Breaking down employee capital plans

Posted on by Kancelaria

From 1 July 2019 the largest employers will have to enable their employees to enrol in employee capital plans.

Employee capital plans (referred to by their Polish acronym “PPK”) were introduced by the Employee Capital Plans Act of 4 October 2018 [Ustawa z dnia 4 października 2018 r. o pracowniczych planach kapitałowych](Dz.U./Journal of Laws of 2018, item 2215, referred to below as the “PPK Act”).

We have prepared a brief overview of key provisions of the PPK Act.

1. COMING INTO FORCE

The PPK Act came into force on 1 January 2019, however, employers (i.e. those hiring under employment contracts and contracts of mandate, as well as entities where supervisory board was appointed) do not have to apply its provisions right away.

The first to set up PPK, on 1 July 2019, will be employers who as of 31 December 2018 hire at least 250 individuals. Smaller businesses do not have to worry about PPK until later, with the next group required to introduce PPK on 1 January 2020 (employers with at least 50 employees as of 30 June 2019).

When determining the number of employees one needs to be wary of two different definitions of employee under the PPK Act and the Labour Code. In the case of the PPK Act, an employee is a broader term that encompasses individuals hired under agency contracts, contracts of mandate and service contracts, as well as supervisory board members who are compensated as such.

2. VOLUNTARY PARTICIPATION

Participation in PPK is voluntary, although, employees will be defaulted to the plan, with the option to opt out on the basis of a written statement. The decision to opt out is not permanent.

On the one hand, an employee who gave up saving can reenrol whenever they wish. On the other hand, if such employee sticks with their choice to resign, they will have to renew the opt out every 4 years. A different solution is provided by the PPK Act for those who are 55 years of age, but not yet turned 70. They can save through PPK, but their enrolment is not automatic – they need to apply. PPK, however, is not an option for those who turned 70 on their first day of work at the latest.

ATTENTION

Employers must not encourage employees to opt out of PPK. Such conduct exposes them to criminal liability (an employer may be fined up to 1.5% of its payroll fund in the preceding financial year).

3. PPK CONTRACTS

Apart from paying contributions, basic obligations of employers related to PPK include making two contracts which lay down the terms and conditions of saving and managing the funds. The first contract concerns the management of PPK and is made between an employer and a financial institution, the second contract concerns the operation of PPK and is made also between an employer and a financial institution, but for and on behalf of employees who decided to save for retirement through PPK.

Employers required to implement PPK on 1 July 2019 will have to execute the contract for the management of PPK no later than 26 September 2019, and the contract for the operation of PPK – 10 October 2019.

ATTENTION

An employer who failed to execute either of the above said contracts within the specified deadline faces criminal liability (the contract for the management of PPK – a fine up to 1.5% of the payroll fund of the employer in the preceding year, the contract for the operation of PPK – a fine between PLN 1,000 and PLN 1,000,000).

4. CONTRIBUTIONS TO PPK BY EMPLOYER AND PPK PARTICIPANTS

PPK contributions will be made by both employers and PPK participants (employees who sign up for the plan). The PPK Act provides for two types of PPK payments – a basic (minimum) contribution and an additional contribution, which is voluntary for both participants and employers. The basic contribution paid by the employer is 1.5% of the salary. The employer may choose in the contract for the management of PPK to pay additional contribution which, however, cannot be higher than 2.5% of the salary.

PPK participants make basic contributions equal to 2% of their salaries (lowered to 0.5% in special cases), with the option to make additional contributions up to 2% of their salaries.

In addition, participants will be subsidized by the Labor Fund. They will receive one-off welcome contributions and, if eligible under the PPK Act, annual contributions.

***

The above is only a brief overview of PPK. The PPK Act is extensive and covers an array of specific cases modifying the discussed general rules and providing more detail on individual issues.

If you have any questions, contact us:

Ewa Bieniak
Attorney-at-law/Of Counsel
+48 22 420 59 59
ewa.bieniak@actlegal-bsww.com

Buma constructs new buildings in Kraków

Posted on by Kancelaria

Buma constructs three new buildings as part of DOT Office in Kraków

In total, DOT Office in about to feature over 100,000 m2 of modern A-class office space, of which 63,000 m2 has already been developed.

“Buma Group is completing the ninth building of DOT office complex located in the Special Economic Zone named Kraków Technology Park,” says Michał Wielhorski, Managing Partner at act BSWW (law firm).

Business operations in the complex can be run on preferential conditions. DOT Office’s neighbors are research and scientific units of the Jagiellonian University, as well as independent international business institutions. There is also a surface parking lot nearby, operating in the “Park & Ride” model, as well as a strategic public transport hub, Czerwone Maki, with an option to quickly reach the city center by tram. The developer pays a lot of attention to external areas – there are relax zones between the buildings, allowing employees to rest among green plants. DOT Office has a kindergarten, clinic, fitness club, hair salon, grocery store, bakery, cafe, several restaurants, newsstand, ATM, parcel pick-up/drop-off point and bike parking racks.

“For years, we have been supporting Buma Group in a comprehensive range of legal aspects of its investment projects – from transaction-related issues, through financing, to leasing,” says Michał Wielhorski.

act BSWW assisted Buma Group in acquisition of land for DOT Office project (legal due diligence, transaction advisory), development and financing (construction and investment credit facilities). It is now supporting the Client in the leasing process.

act BSWW’s team is led by Michał Wielhorski, Managing Partner, who runs the law firm’s real estate practice. Leasing services are provided by Alicja Sołtyszewska, Partner, specializing in lease agreements.

act BSWW has also performed legal consulting services with respect to other office complexes developed by Buma Group: Green Office (21,300 m2), Tertium Business Park (39,900 m2), Aleja Pokoju 5 (13,000 m2) and Quattro Business Park (48,800 m2). The law firm is also handling two ongoing projects, Cu Office (23,500 m2) and Wadowicka 3 (31,200 m2). The scope of legal advisory covers the whole investment cycle.

act BSWW and Upper Finance advise on Silver Dental Clinic’s sale to Lux Med Group

Posted on by Kancelaria

Lux Med Group acquired 100% shares in Silver Dental Clinic. act BSWW (legal advisor) and Upper Finance Med Consulting (transactional advisor) supported the clinic’s owners during the sale process.

Silver Dental Clinic offers highly specialized services, including a unique range of orthodontist ones. The clinic makes use of advanced digital technology. It is made up of 6 units, a radiology lab with digital diagnostic equipment, an orthodontic lab and a training room.

Transaction-related legal services for the dental clinic’s former owners were provided by act BSWW. The scope of the law firm’s works included negotiations covering the sale of shares, lease of premises in which the clinic runs its operations, and support in deal closing.

The project was handled by Piotr Smołuch (attorney-at-law, Managing Partner) and Sebastian Sury (attorney-at-law, Partner).

“For some time now, we have seen the growing popularity of private dental services and their increasing market share,” says Piotr Smołuch.

“This is yet another instance of our cooperation with Upper Finance,” adds Sebastian Sury.

The Polish dental market is currently worth PLN 11bn and despite accounting for just 3% of the European market, it has the potential to keep growing at the pace of approx. 10% year-to-year. This growth is propelled primarily by the rapidly increasing popularity of private services that make up as much as 80% of the dental market. Only a third of Poles use National Health Fund (NFZ)-reimbursed services, while public spending on this medical segment constitutes just 2.5% of NFZ’s budget.

“The increasing share of private spending on dental care is related to easier access to technology that improves patients’ comfort and meets a broad array of their needs. This trend is further promoted by the fact that the society is becoming richer and more aware of a simple truth that a beautiful smile often comes with a successful life,” says Joanna Szyman, Deputy President at Upper Finance Med Consulting.

Upper Finance Med Consulting experts have taken note of the ongoing process of market consolidation by investors:

“This trend is perfectly understandable, given the highly dispersed nature of the Polish market, quick technological growth, cut-throat competition from large medical groups, and challenging expectations of patients. Investors appreciate clinics in which highly advanced services, incl. orthodontics, form a large share,” says Marcin Śmigielski, Project Manager at Upper Finance Med Consulting.