Legal Eye: Information overlord

"PAIiIZ faces many challenges. One of them is the need to better define the Agency's role in attracting foreign investment,"

Adam Żołnowski, newly appointed chief executive officer of PAIiIZ

Contrary to popular understanding, the Polish Information and Foreign Investment Agency (PAIiIZ) is not a government agency, but a joint-stock company wholly owned by the State Treasury. Created in June 2003 from the merger of two separate entities, the Polish Agency for Foreign Investment (PAIZ) and the Polish Information Agency (PAI), PAIiIZ functions in a manner similar to other joint-stock companies, accountable to its shareholders, in this case to one shareholder - the State Treasury. This explains, in part, why the new head of the Agency, Adam Żołnowski, holds the position of chief executive officer as opposed to Deputy Minister or director.

Licensed to promote
The agency's mandate is to promote the inflow of foreign investment (a carry-over from PAIZ) and to promote a positive image of Poland abroad (a carry-over from PAI), including the promotion of Polish exports. In an effort to achieve these two general goals, the agency provides advice to foreign investors in understanding and complying with local administrative and legal procedures. The agency will also assist in facilitating introductions to central and local authorities, in addition to providing advice on the best location to invest.

Who's the boss?
Ultimately, the State Treasury, as sole shareholder, is in control. Similar to other joint-stock companies, the agency must hold an annual shareholders' meeting, at which the shareholders (the State Treasury) will either approve or reject the annual financial report and the management board's activity report. Rejection of the annual activity report is sufficient to lead to the dismissal of the agency's entire management board.

Unlike a true government agency, the agency's employees are not treated as civil servants, even though they fall under the control of the State Treasury. Additionally, the agency may not dispose of any assets with a value greater than zł.50,000 without permission from the State Treasury. The agency currently has assets worth zł.12 million.

Can't have too much
The Agency provides advice in the form of information, more information ... and yet more information. For instance, on the agency's website, detailed information is available regarding more than 1,000 foreign investors currently operating in Poland. Moreover, you can download information on different business sectors, including, for example, automotive, energy and logistics. Did you know that the average monthly wage in Lower Silesia is zł.2,358, as compared to zł.2,748 for all of Poland? These details and more may be found at www.paiz.gov.pl.

PAIiIZ's mandate does not include providing detailed consulting services, such as tax and legal assistance. Such services will need to be contracted with a local service provider. The agency recommends certain service providers, at least indirectly, who "partner" with the agency on its website.

Mixed results
During the past two years Poland has lost out to Slovakia and the Czech Republic in attracting large greenfield investments planned by Hyundai, Toyota and Citroen. Toyota, however, did decide to locate an engine manufacturing plant in Poland. At the same time other large foreign investors, such as LG Electronics, 3M, Cadbury Schweppes and Whirlpool have announced plans to locate new manufacturing facilities in Poland.

Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki & Partners