Brief overview
Poland is an attractive location for companies seeking to enter the Eastern European market through mergers and acquisitions (M&A). With its stable economy, strategic location, and competitive labor costs, Poland offers ideal conditions for investment. This article analyzes the process of acquiring Polish companies, particularly limited liability companies (sp. z o.o.) and joint-stock companies (SA), taking into account the Polish Commercial Code (KSH) and the regulations of the Competition and Consumer Protection Authority (UOKiK). Practical tips, a detailed description of due diligence, valuation, negotiations, and integration, as well as a case study on the acquisition of a Polish manufacturing company, provide a sound overview.
Introduction (overview)
The Polish economy has developed into a dynamic market, attracting German companies with its proximity, skilled workforce, and attractive cost structure. According to a PwC study, the number of M&A transactions involving German companies in Poland increased by approximately 12% annually The war in Ukraine has strengthened Poland's role as a nearby location, as companies seek stable alternatives to riskier markets. German investors can choose between greenfield investments (new construction) and brownfield investments (acquisition of existing companies). Acquisitions offer rapid market access and the use of existing structures, making them particularly attractive for companies with growth ambitions in Poland. This article provides a comprehensive guide for companies planning an acquisition in Poland, including practical tips and a case study.
Legal framework for M&A in Poland
The legal framework for company acquisitions in Poland is governed by the Polish Commercial Code (Kodeks spółek handlowych, KSH), which regulates the organization and acquisition of companies such as sp. z o.o. and SA. New regulations within the KSH will come into effect in 2025, introducing additional registration requirements for joint-stock companies, such as detailed reporting obligations regarding shareholder structures. Since the introduction of the electronic National Register of Companies (e-KRS), companies are required to submit certain documents, such as shareholder lists or amendments to the articles of association, exclusively electronically via the e-KRS portal . This speeds up processes but requires a digital signature or an authorized representative with access to the system. Furthermore, as of April 1, 2025, all companies are required to use the electronic delivery system ( e-Doręczenia ) for official correspondence with authorities. This requires setting up an electronic delivery address managed by an administrator. From April 1, 2025, official documents will be delivered exclusively electronically, unless a delivery address has not been activated; in this case, delivery in paper form is possible. Companies that do not activate a delivery address by April 1, 2025, risk delays in delivery and missed deadlines. A transitional period applies until December 31, 2025, during which traditional communication channels can still be used to some extent. Investors should ensure that the target company meets these requirements to avoid integration delays.
Article 180 of the Polish Commercial Code (KSH) requires notarization of signatures on the contract for the transfer of shares in a limited liability company (sp. z o.o.) (but not full notarization as required in Germany). Contracts concluded abroad require an apostille or legalization to be valid in Poland. Additionally, documents concluded and certified abroad must be translated into Polish by a sworn translator. The purchase of shares in a limited liability company (sp. z o.o.) in Poland is generally subject to civil transaction tax (PCC) of 1% of the fair market value of the shares. However, this tax is waived if the purchase agreement is concluded abroad, which is common practice. An asset deal allows for the selective acquisition of assets and may be exempt from VAT under Article 6, Paragraph 1 of the Polish Value Added Tax Act (ustawa o podatku od towarów i usług, UPTU) if an entire company or an organized part thereof is acquired. The acquisition of individual assets that do not constitute an organized asset unit is not exempt from VAT.
Competition law plays a crucial role, particularly for larger transactions. The Office of Competition and Consumer Protection ( UOKiK ) reviews acquisitions if the combined worldwide turnover of the companies involved exceeds EUR 1 billion and the combined turnover of at least two of the parties in Poland exceeds approximately PLN 50 million (under current legislation, as of July 2025). A non-binding preliminary inquiry with the UOKiK before submission can be advisable to minimize the risk of rejection. For smaller acquisitions, UOKiK review is often unnecessary, simplifying the process. In strategic sectors such as energy, telecommunications, and defense, reviews by the Ministry of Development and Technology are required (Act on the Control of Certain Investments of July 24, 2015). Foreign Direct Investment (FDI) review applies to investments by companies or individuals from countries outside the EU, EEA, or OECD if the target company's turnover in Poland exceeds EUR 10 million (under current legislation, as of July 2025). Since July 24, 2025, the Ministry of Development and Technology has been solely responsible for FDI reviews. The decision typically takes 2–3 weeks.
Share Deal vs. Asset Deal
A share deal allows for quick access to existing structures, such as customer relationships or supply contracts, but carries the risk of liability for historical debts. An asset deal is suitable if only specific assets are to be acquired and can offer tax advantages if the acquisition qualifies as a transfer of a business under Article 6, paragraph 1 of the UPTU, thus eliminating VAT (23%). A common practical problem with asset deals is that existing contracts with counterparties are not automatically transferred, requiring new negotiations or approvals.
aspect | Share Deal | Asset Deal |
|---|---|---|
Time required | 2–4 months | 4–8 months |
Tax implications | Corporate income tax (19%) on capital gains, PCC (1%) if concluded in Poland | Value added tax (23%) on assets, tax exemption possible (Art. 6 point 1 UPTU) |
documentation | Purchase agreement, notarization of signatures (sp. z oo), list of shareholders at the KRS | Individual contracts for assets, counterparty consent often required |
Liability | Assumption of all existing liabilities | Only for selected assets, excluding historical debt |
Contracts in the M&A process
Key contracts include the NDA (Non-Disclosure Agreement) to protect confidential information, the Letter of Intent (LoI) , which outlines the basic terms, and the Share Purchase Agreement (SPA) , which governs the terms of the acquisition. A preliminary agreement (umowa przedwstępna) can be used to formalize the intent before regulatory approvals are obtained.
💡 Tip: Make sure the NDA covers all sensitive data, especially financial reports and customer lists, to minimize risks in case of negotiations breaking down.
EU law and its impact
EU Directive 2004/25/EC on takeover bids applies to listed public limited companies and establishes transparency obligations, such as the disclosure of a takeover bid when 33% of the voting rights are reached (Law on Public Bids of 29 July 2005). Compared to Germany (30% threshold according to the German Securities Acquisition and Takeover Act), the Polish regulation is somewhat more flexible, which facilitates smaller takeovers. However, this directive is rarely relevant for takeovers of unlisted limited liability companies (sp. z o.o.).
Protection of minority shareholders
In Polish joint-stock companies, the Polish Stock Corporation Act (KSH) protects minority shareholders through rights such as the right to inspect company documents (Article 428 KSH) and the right to challenge resolutions passed at the general meeting (Article 422 KSH). In the case of takeovers, minority shareholders can demand a squeeze-out if the majority shareholder holds 90% of the shares (Article 418 KSH).
FDI Screening Mechanism
EU Regulation 2019/452 on the screening of foreign direct investments (FDI) is implemented in Poland through the Law on the Control of Certain Investments. This screening applies to investments by companies or individuals from countries outside the EU, the EEA, or the OECD if the target company's turnover in Poland exceeds €10 million (under current legislation, as of July 2025). Since July 24, 2025, the Ministry of Development and Technology has been solely responsible for FDI screening, including in strategic sectors such as energy, telecommunications, and defense. The decision typically takes two to three weeks. The European Commission, in its proposal COM/2023/711 final, has proposed harmonizing FDI screening procedures across member states, which is expected to enter into force in 2026. This includes more uniform criteria for evaluating investments and potentially shorter review deadlines, which could affect procedures in Poland. However, the proposal is not yet legally binding. For most acquisitions, such screening is irrelevant.
🛠 Practical tip: Check early whether your acquisition falls under FDI screening and prepare the relevant documents to avoid delays.
Due Diligence
Due diligence (DD) is crucial for minimizing risks during an acquisition. It is divided into three main areas:
=> Legal due diligence: Review of contracts (e.g., leases, loan agreements), company documents (articles of association, KRS entries), pending legal disputes, and intellectual property. Particular attention is paid to employment law.
=> Financial due diligence: Analysis of balance sheets, profit and loss statements, and cash flows. Many Polish companies use the UoR accounting standard, which differs from IFRS. Risks include hidden liabilities such as tax debts.
=> Commercial due diligence: Examination of market position, customer structure and competitive landscape, supported by market studies (e.g. by PAIH ).
Employment law
According to Article 23¹ of the Polish Labor Code (Kodeks pracy, KP), in a company acquisition, all employment contracts automatically transfer to the buyer. The acquisition of an organized asset unit through an asset deal also results, according to Article 23¹ KP, in the automatic transfer of existing employment relationships to the buyer. This includes protection against dismissal and wage entitlements. The buyer is liable for existing employment obligations. A thorough review of the employment contracts is necessary to minimize risks.
Environmental and property issues
Environmental due diligence verifies compliance with Polish environmental regulations, such as those concerning waste disposal. Violations can result in heavy fines. The land register (księgi wieczyste) must be examined to clarify ownership and encumbrances on properties.
Data Protection & IT
Compliance with the GDPR (General Data Protection Regulation) is crucial. Companies must submit data protection policies and IT security measures. Cyber risks, such as data leaks, can have significant consequences.
Timeframe and pitfalls
Due diligence for a medium-sized company takes approximately 1–3 months. Common pitfalls include incomplete documentation or unclear ownership structures.
🛠 Practical tip: Hire a sworn translator for Polish documents to avoid misunderstandings during the DD process.
Target company valuation
The valuation of a Polish company is based on methods such as discounted cash flow (DCF) or the multiples method. EBITDA multiples in Poland are 4–6x in the manufacturing sector and 6–8x in the IT sector. The exchange rate of the zloty and inflation (approximately 6% in 2023, CIS data) can influence the valuation. Earn-out and escrow agreements protect buyers by linking the purchase price to future performance.
In practice, some Polish sellers prepare what is known as vendor due diligence , in which they conduct a comprehensive examination of the company themselves and make the results available to potential buyers. This facilitates the buyers' decision-making process, as detailed information on finances, contracts, and risks is already available, and can accelerate the acquisition process.
🛠 Practical tip: Use escrow accounts to secure guarantees, especially when there is uncertainty about future returns.
Negotiations and purchase agreement
Negotiations in Poland are often influenced by personal relationships. Typical points of contention include warranties, liability periods (12–18 months), and disclaimers. The SPA contains clauses such as Material Adverse Change (MAC) , non-compete clauses , and confidentiality . Notarization of signatures for sp. z o.o. shares costs approximately 1,000–1,500 PLN.
🛠 Practical tip: Negotiate clear non-compete clauses to prevent the seller from engaging in competitive activities.
Do's & Don'ts in Polish-German M&A negotiations
DOS:
=> Build personal trust through regular communication;
=> Use local advisors to understand cultural nuances;
=> Clarify warranties and liability periods early on.
Don'ts:
=> Avoid purely written negotiations without personal meetings;
=> Do not underestimate the importance of the Polish language in documents.
Graduation and Integration
After the contract is signed, the shareholders' list is updated in the National Court Register (KRS), a process that takes 2–4 weeks. The entry in the KRS remains formally unchanged; however, the new shareholder is recorded in the shareholders' list that must be filed with the Commercial Register. Required documents include the notarized purchase agreement and the updated shareholders' lists. For smaller acquisitions, a UOKiK (Union of Competition and Consumer Protection) review is often not required. Integration necessitates the harmonization of processes and consideration of cultural differences.
🛠 Practical tip: Rely on local leaders to facilitate integration and minimize cultural tensions.
Case study: Acquisition of a Polish manufacturing company
In 2023, a German mechanical engineering company acquired a Polish sp. z o.o. near Wrocław that manufactures precision parts. The process began with a Letter of Intent (LoI) in January 2023, followed by due diligence (February–April 2023) that examined contracts, finances, and market position. Negotiations (May–June 2023) resulted in a Share Purchase Agreement (SPA) with an earn-out clause. The transaction was completed in August 2023 after notarization of the signatures and updating of the shareholders' list in the Polish Court of Justice (KRS). Key success factors included the involvement of the Polish management and a clear communication strategy. Challenges such as differing IT systems were addressed through training.
Practical questions and answers
How long does a typical M&A transaction take in Poland?
An acquisition takes 4–8 months, depending on the due diligence and the complexity of the negotiations.
Can the transaction be carried out remotely?
Many steps, such as negotiations and document reviews, can be done digitally, but the notarization of signatures requires physical presence or an authorized representative. A Polish notary will also accept an authorized representative with a written power of attorney, which must also be notarized and, if necessary, apostilled.
What are the costs for consulting?
Legal and financial advice costs approximately 10,000–50,000 EUR, depending on the transaction volume.
Is a Polish holding company a sensible option?
A holding company can offer tax advantages, for example with dividend payments, but requires additional administrative effort.
Can I pay the purchase price in euros?
Yes, in practice, purchase prices are regularly agreed in euros and paid in Poland, with the exchange rate being stipulated in the contract.
How can I ensure that I am not liable for past liabilities?
Through careful due diligence and contractual guarantees, as well as the use of escrow accounts, legacy risks can be minimized.
Can I transfer shares in a sp. z o.o. (limited liability company) to Germany?
Yes, provided the Polish formal requirements (notarization of signatures, apostille or legalization) are met, graduation in Germany is possible. The documents must also be translated into Polish by a sworn translator.
Conclusion & Summary
Acquiring Polish companies offers German firms an effective way to access the Polish market. The process requires thorough due diligence, careful negotiations, and adherence to the Polish Commercial Code (KSH). Cultural sensitivity and local expertise are crucial for success. This case study demonstrates how a well-planned acquisition can be successful.
Checklist: Company acquisition in Poland in 10 steps
1. Target identification: Utilize networks such as AHK or PAIH;
2. Conclude an NDA: Protect confidential information;
3. Due Diligence: Examine legal, financial, and commercial aspects;
4. Evaluation: Use multiplier methods or DCF;
5. Sign the Letter of Intent: Outline the terms;
6. Negotiations: Clarify warranties and liability issues;
7. Notarization of signatures: Mandatory for sp. z oo shares;
8. KRS update: Submission of the updated list of shareholders;
9. Integration: Harmonize processes and cultures;
10. Follow-up: Monitor the results of the acquisition.
Avoid common mistakes
=> Underestimation of the due diligence duration;
=> Neglect of cultural differences;
=> Inadequate integration planning.
Should you have any questions regarding company acquisitions in Poland (M&A, law, due diligence & integration), you can contact us by email at kontakt@kancelaria-pozniak.pl or by phone at +48 665 246 969 .