Changes to foreign investment control in Poland signal a shift in approach

Dual framework for investment screening in Poland

Poland operates two parallel investment screening regimes: (i) one concerning so-called "protected entities," which applies to all investors regardless of their nationality, and (ii) the FDI screening regime, which protects Polish companies from "strategic" sectors against takeovers by foreign investors.

Investment control of “protected entities”

The regime for “protected entities” was introduced over a decade ago. It covers certain types of investments (including acquisitions of at least 20%, 25%, or 33% of shares) in individually listed entities. The list, regularly updated by the Polish government, currently includes 23 companies operating in strategic sectors such as oil and gas, telecommunications, and chemicals. Investors must notify the relevant sectoral ministry prior to the transaction. If the minister objects, the transaction cannot proceed. This regime applies indistinctly to all investors, including Polish investors.

Investment control in strategic sectors

The FDI screening regime was introduced in 2020 in response to the COVID-19 pandemic, aiming to protect Polish businesses in strategic sectors from takeovers by investors from outside the EU, the European Economic Area (EEA) and the Organisation for Economic Co-operation and Development (OECD). Initially intended to last 24 months, the regime was extended to 60 months, expiring on July 24, 2025. Until July 23, 2025, the PCA was responsible for assessing such transactions.

Under this regime, investors from outside the EU/EEA/OECD (i.e., natural persons without EU/EEA/OECD citizenship or entities without a registered seat in the EU/EEA/OECD for at least the past two years) must notify the authorities of covered transactions. Transactions that receive an objection cannot proceed.

The regime applies to investments (including acquisitions of at least 20% or 40% of shares) by foreign investors into Polish companies from, among others, “strategic” sectors linked to electricity, gas, fuels, telecommunications, food processing, pharmaceuticals, chemicals, fertilizers, explosives, weapons, ammunition, and products or technology used by the armed forces and police. It also covers companies creating software essential to society (e.g., energy, water supply, hospitals, transportation) and all public companies, regardless of sector. Only companies with revenues exceeding EUR10 million in Poland in one of the two financial years preceding the transaction are subject to the regime.

Need for a change?

Although inspired by regimes in other EU member states (such as France and Italy), enforcement of the Polish FDI rules has been relatively limited. Between 2020 and 2025, only 12 decisions were issued by the PCA, none resulting in a prohibition. Nevertheless, the PCA has developed its interpretation of the rules and published procedural clarifications, most recently updated last year.

As the expiration date approached, the Polish legislator opted to amend the rules, citing ongoing international instability (including the war in Ukraine and instability in the Middle East) and the European Commission (EC)’s recent announcement of measures to reform the EU FDI framework.

Scope of the changes

Interestingly, the Polish legislator did not decide to change the criteria for notification of the investments or procedural rules. The amendments are limited in scope and focus primarily on the duration of the FDI screening regime and its supervisory authority:

• Change of competent authority: The most significant change is the transfer of competence for reviewing relevant transactions from the PCA to the minister responsible for economic affairs (currently, the minister of finance and economy). For proceedings initiated before July 24, 2025, the PCA will remain the competent authority until those proceedings conclude.
• Permanence of the regime: The provisions introduced in 2020 are now permanent, with no temporal limitation.

Among these changes there is only one relevant for the investment control of “protected entities.” Transactions involving direct investments by the Polish state are now excluded from the scope of this regime.

Potential implications

Although the number of changes is limited, they may have a significant impact on foreign investors, particularly in transactions involving entities in “strategic” sectors. The transfer of competence from the PCA to the minister responsible for economic affairs marks a shift from a competition-focused authority to a political one. The legislator has justified this move on practical grounds, including the resolution of a recent dispute between ministers regarding the monitoring of foreign investments within the EU and ongoing work on modernizing the EU FDI framework.

The fact that a government minister will now be the competent authority may raise questions about the regime’s focus and objectives, and whether there will be a shift in approach towards foreign investment. While the Polish FDI rules still reference the prevention of distortion of competition, it is anticipated that the minister of finance and economy will place greater emphasis on security, public order, and public health, as highlighted in the justification for the amendment.

The move to a permanent FDI regime confirms that the Polish government treats investments in strategic sectors with increased scrutiny. This aligns with a broader European trend towards strengthening foreign investment rules at both national and EU levels. The EU is currently working towards adopting a revised FDI Regulation, aiming to address new geopolitical and security challenges and harmonize rules across member states, with increased intervention powers for the EC. You can read about European Parliament’s recent steps in the process here.

A thorough assessment of the amendments will only be possible once the first decisions of the new authority have been issued. In particular, it remains to be seen whether the minister will draw on the PCA’s experience and the guidelines previously issued by the PCA. This shift in approach warrants close monitoring as part of any initial risk assessment for transactions involving Polish strategic sectors.