Category: Poland

Linklaters has advised the EBRD on its EUR 75 million investment in Poland’s R.Power alongside the Three Seas Initiative Investment Fund. Slaughter and May and CMS’s Luxembourg office reportedly advised 3SIIF.

R.Power is a Polish utility-scale solar photovoltaic developer and an independent power producer with a renewables portfolio in Poland as well as Romania, Germany, Italy, Spain, and Portugal.

The Three Seas Initiative Investment Fund is a dedicated commercial fund targeting infrastructure investments in CEE.

This is the EBRD’s first co-investment alongside 3SIIF, according to Linklaters. “The combined capital increase provided by the EBRD and 3SIIF is expected to support R.Power’s long-term growth strategy, including its plan to achieve a 1-gigawatt-peak operating solar photovoltaic portfolio across the EU within the next two years.”

The Linklaters team included Warsaw-based Partner Daniel Cousens, Counsel Christopher Quinn, Managing Associates Michal Szperzynski, Jakub Dabrowski, and Wojciech Podlasin, Senior Associate Barbara Wanat, Associates Zuzanna Oldfield, Justyna Tuleja, and Yuliia Stepanyk, Junior Associate Wiktoria Burdzy, and Visiting Lawyer Iryna Fonotova, with further lawyers from the firm’s Berlin, Lisbon, London, Luxembourg, Madrid, and Milan offices.

For many years it has been clear for Polish entrepreneurs that there is no simple legal answer to their strong need to secure their family assets, and above all their family businesses, for future succession. Due to the lack of appropriate instruments in the Polish legal system, many national entrepreneurs were forced to use the legal institutions of other jurisdictions. This solution was highly uncomfortable because of the differences in legal regimes and foreign legal requirements that did not entirely meet the needs of domestic entrepreneurs.

Finally, by virtue of the Act on Family Foundation of 26 January 2023 that entered into force on 22 May 2023, the family foundation was introduced into the Polish legal order. According to the Ministry of Economic Development and Technology of the Republic of Poland, by the end of 2023, around 300 family foundations were registered, along with over 3,000 succession administrators offering their professional assistance in managing family foundations’ affairs. It only further proves that a family foundation has been a long-awaited legal vehicle for succession planning as well as for accumulating and securing family wealth.

In view of the popularity of the Polish family foundation, it is worth summarizing the most important features of this institution. The purpose of a family foundation is to accumulate property, manage it in the interests of beneficiaries, and provide benefits for beneficiaries. A ‘benefit’ means assets, including cash, tangible goods or rights, transferred to the beneficiary or made available to the beneficiary for use by a family foundation or a family foundation in organization, in accordance with the statutes and list of beneficiaries. The founder of a family foundation can only be an individual (natural person) with full capacity to take legal action who makes a declaration on the establishment of a family foundation in either a deed of incorporation or a will. The founder must also provide a contribution to the family foundation to cover the initial fund with a value no smaller than PLN 100,000 (around USD 25,000). Upon signing of the deed of incorporation or announcement of the will, a family foundation in organization is created. The family foundation in organization acquires legal personality and becomes a family foundation upon registration in the register of family foundations.

The family foundation’s governing bodies are the management board, the beneficiaries’ meeting and the supervisory board. The main task of the management board is to run the family foundation’s affairs and represent it (act on its behalf), whereas the beneficiaries’ meeting is the ultimate decision-making body. The supervisory board is mandatory if the number of beneficiaries exceeds 25, and its key purpose is the supervision of the management board. Hence, the structure applied in the Polish family foundation is familiar to the Polish legal system, as it is similar to that of a Polish limited liability company, which is one of the most common companies in Poland.

When it comes to the scope of operation of a family foundation, it has the right to conduct business activities, but to a limited extent. By way of example, a family foundation can sell, lease or rent real property; participate in companies, investment funds and cooperatives; buy and sell securities, derivatives and other rights of a similar nature. It needs to be stressed that conducting business activities exceeding the permitted scope may trigger adverse consequences for the family foundation, like taxation of income from such activities at a corporate income tax (CIT) rate of 25%.

One of the main reasons for the popularity of the Polish family foundation is tax driven. Apart from few exemptions (including the above-mentioned case where a family foundation exceeds the permitted scope of business activity or where a family foundation transfers benefits to beneficiaries) family foundations are basically CIT-free. In addition, the closest family members of the founder belonging to “group zero” (spouse, descendants, ascendants, stepchildren, siblings, stepfather, and stepmother) are generally exempt from the personal income tax, as well as the inheritance and donation tax with respect to assets contributed to the family foundation by the founder.

But despite the numerous advantages, the family foundation is not without its faults. For example, there is no generally accessible digital register of family foundations, which means that obtaining information about a family foundation may take up to several weeks. In addition, there is only one court in Poland that deals with matters concerning family foundations, which may lead to case overload and very long document-processing time.

To sum up, currently there are around 830,000 family businesses in Poland, thus, it is fair to say that 300 Polish family foundations is just the beginning, and its importance as a new legal instrument will certainly grow over time. On the other hand, a well-known practice in other countries is to employ family foundations in complex transactions and corporate restructurings for the purpose of tax optimization. At this point such utilization of the Polish family foundation seems to be questionable because of the general anti-avoidance rule laid down in Polish tax law. However, it is yet to be seen how the Polish lawmaker and courts will impact the functioning of family foundations in practice – and not only from tax perspective – in the near future.

By Krzysztof Banaszek, Senior Associate, Noerr

CK Legal Chabasiewicz Kowalska has advised Omni Running on its partnership with an external individual investor. The Rapala law firm advised the investor.

According to CK Legal, “the Omni Running brand was created based on the experience of one of its founders, Marcin Lewandowski – a Polish middle-distance runner specializing in the 800 and 1,500-meter races, winner of 11 medals at world and European championships, who represented Poland four times at the Olympic Games. Thus far, the company has been financed through the founders’ own funds and profits generated from sales. Through the transaction, Omni Running secured additional financing for further development of its production and sales of dietary supplements for athletes.”

The CK Legal team included Managing Partner Magdalena Golonka, Founding Partner Agata Kowalska, Senior Associate Maria Skalska, and Attorney Trainee Zuzanna Durbacz.

The Rapala team included Partner Krzysztof Rapala, Legal Advisor Sebastian Kozlowski, and Attorney at Law Anna Mierzwiak.

Norton Rose Fulbright has advised mBank on financing the construction of a 98-megawatt photovoltaic portfolio sponsored by Sunly. CMS advised Sunly.

According to Norton Rose, “the financing will be used to roll out 58 projects. Most of them will be located in the south of Poland, but individual installations are also planned in other regions. The majority of the electricity generated by this portfolio will be based on merchant risk.”

Sunly is an independent energy producer that develops renewable energy projects in the Baltics and Poland.

The Norton Rose team included Partner Tomasz Rogalski, Senior Associates Igor Kondratowicz and Cezary Zawislak, Associates Karolina Lepakiewicz and Cezary Zientecki, and Lawyers Wiktoria Jadczak, Bartosz Odziemkowski, and Mikolaj Wolczynski.

The CMS team included Partner Lukasz Szatkowski, Counsel Martyna Markiewicz, Senior Associate Karol Jaworecki, Associates Jakub Przybylek and Alicja Smyklinska, and Lawyers Maciej Lorenz and Bartosz Potrykus.

SK&S Soltysinski Kawecki & Szlezak has advised Velocity Clinical Research on its acquisition of ClinMedica Research. Loewen Kaczmarek Zawadowski advised Deo Family Fundacja Rodzinna on the sale.

Velocity Clinical Research is a multi-specialty clinical sites business.

ClinMedica provides clinical research and specialized medical care services.

According to SK&S, “this acquisition of ClinMedica marks Velocity’s tenth site in Europe, in addition to its four sites in Germany and five in the UK. The new acquisition marks the start of Velocity’s expansion in Poland and is the first acquisition among the key ones planned by the company in Poland before the end of the year.”

The SK&S  team included Partners Krzysztof Pawlisz, Piotr Andrzejak, Agnieszka Fedor, and Jacek Myszko, Senior Counsel Karol Skibniewski, Senior Associates Natalia Labeda and Tomasz Grabka, and Associates Magdalena Rozek, Piotr Mordzonek, Katarzyna Juralewicz, and Ewelina Woike-Regula.

The Loewen Kaczmarek Zawadowski team included Partners Artur Zawadowski and Szymon Kaczmarek and Trainee Advocate Klaudia Jedrzejczyk.

Wardynski & Partners, working with Portugal’s Morais Leitao, has advised EDP and its subsidiary EDP Renovaveis on the repurchase of a 49% stake in EDPR’s wind energy assets in Portugal, Poland, and Italy from subsidiaries of China Three Gorges for a total of EUR 570 million.

According to Wardynski & Partners, EDPR now holds the second-largest portfolio of wind energy operations in Poland, with a capacity of 747 megawatts.

The Wardynski & Partners team included Partners Kinga Ziemnicka, Igor Hanas, and Antoni Bolecki, Principal Counsel Mark Dolatowski, and Lawyers Monika Lutomirska, Wiktor Zborowski, Andrzej Madala, Marcin Kulesza, and Weronika Nalbert.

Wardynski & Partners did not respond to our inquiry on the matter.

Taylor Wessing has advised Sunday Natural and founder Joerg Schweikart on the sale of a stake in Sunday Natural to private equity investor CVC Capital Partners VIII. Soltysinski Kawecki & Szlezak, working with Germany’s Lubberger Lehment, ZENK, and Clifford Chance, reportedly advised CVC.

The transaction remains contingent on regulatory approval.

Sunday Natural engages in digital direct sales of vitamins, minerals, and dietary supplements in the DACH region.

The Taylor Wessing team included Poland-based Partners Olav Nemling and Krystian Stanasiuk, Counsels Jan Adamus, Antoni Goraj, and Michal Kulig, Senior Associates Katarzyna Matusiak, Bartosz Swidrak, Magdalena Jaczewska-Zurek, Pawel Skura, and Adrian Bielecki, and Associates Mateusz Sikorski, Monika Gac, Michal Zabost, and Zygmunt Waga and further lawyers in Germany.

Taylor Wessing has advised PKO Bank Polski on financing the Novastone Capital Advisors and Frederick Rdultowski investment in Adex Cosmetics & Pharma. SSW Pragmatic Solutions reportedly advised the buyers.

Adex Cosmetics & Pharma is a Polish cosmetics company. According to the firm, it “has been providing innovative cosmetic products for the market for 20 years. The financing obtained will enable further development and innovation in the cosmetics market.”

The Taylor Wessing team included Partner Zbigniew Korba, Counsel Michal Kulig, and Associate Maria Galezowska.

Schoenherr has advised CEE private equity fund Avallon MBO on the sale of beverage producer Wosana to Japan’s DyDo Group Holdings. Squire Patton Boggs reportedly advised the buyer.

According to Schoenherr, the transaction is valued at approximately EUR 45 million. “With this transaction, the DyDo Group is set to acquire 100% of the shares in Wosana, thus strengthening its market presence in the Polish beverage industry.”

Avallon MBO is a private equity fund based in Lodz, Poland, specializing in management buy-outs. After the exit from Wosana, the Avallon MBO fund’s portfolio now includes ten other companies.

DyDo Group Holdings is a Japanese company principally engaged in the manufacture and sale of beverages.

The Schoenherr team included Partner Krzysztof Pawlak, Senior Attorney at Law Krzysztof Lesniak, and Associate Klaudia Szatan.

Editor’s Note: After this article was published, Squire Patton Boggs confirmed it had advised DyDo Group Holdings on the acquisition of Wosana. The firm’s team included Warsaw-based Partner Marcin Wnukowski and Associate Patrycja Pacholczak and Tokyo-based Partner Stephen Chelberg.

CK Legal Chabasiewicz Kowalska has advised PragmaGo on its acquisition of Monevia. GKW Grabalski Kempinski i Wspolnicy advised the 21 Concordia fund – acting through the Monevia International sarl SPV – on the sale.

PragmaGo is, according to CK Legal, the largest provider of embedded finance services for businesses in Poland.

Monevia operates in the single invoice financing market.

According to CK Legal, “the companies will jointly develop digital factoring solutions for micro, small, and medium-sized enterprises.”

The CK Legal team included Managing Partner Magdalena Golonka, Founding Partner Agata Kowalska, and Senior Associate Maria Skalska.

The GKW team included Partner Arkadiusz Grabalski and Associate Michal Szram.