Sejm lowers investment law hurdle
"It could be an important sign for foreign businesses that Poland is making favorable conditions for foreign investors," said Robert Kaszlewicz, a spokesman for the Foreign Investors Chamber of Industry and Commerce, which represents 400 joint ventures in Poland. "This law, in our opinion, will be friendly to further development of the Polish economy."
The law also brings Poland one step closer toward membership in the Organization for Economic Cooperation and Development (OECD), said Janusz Szymanski, a representative from the Labor Union Party who chaired the subcommittee working on the joint-venture law in the Sejm.
Jacek Siwicki, senior vice president of Enterprise Investors in Warsaw and former deputy privatization minister, was equally positive.
"Despite whatever concerns you could have of the new ruling coalition ... this is a clear signal they want foreign investors' lives to be easier," said Siwicki, whose venture capital firm manages $350 million in funds.
Siwicki is currently seeking to raise more than $100 million for a private equity fund from international investors. He said the law might persuade investors to put money into Poland.
"The changes in the legislation will allow me to add one more argument that things are not getting worse here, but getting better," he said.
The joint-venture law was proposed by the government, which sent the bill to the Sejm as an "urgent project." It was passed Thursday by Parliament's upper house, the Senate. Also during Friday's session, the Sejm approved a bill the Senate had previously rejected, making it easier for foreigners to purchase land in Poland (See Property Watch, p. 5). Both bills await final approval by President Aleksander Kwaćniewski.
Lawyers said the law is an encouraging sign for foreign investors, both in the legal sector and without.
"It looks like it's a very positive incentive for foreign investors and also for foreign law firms," said Jur Gruszczynski, a managing partner in Baker & McKenzie's Warsaw office.
Szymanski said the law creates better conditions, not just for foreign firms who want to open offices here, but for Polish lawyers as well. Foreign firms have to employ Polish lawyers, he noted.
But there are still some clouds on the horizon for foreign-owned law firms. While Parliament has passed the joint-venture law, another bill restricting ownership of law firms to licensed Polish attorneys and legal advisers remains pending.
That proposal, which was heard by the Parliament in September 1994, says that a law firm has to be a partnership between attorneys and/or legal advisers who have passed the Polish bar. A requirement for taking the bar is Polish citizenship. The law, submitted to the Parliament in June 1994, has been sitting in the Justice and Human Rights Committee for more than two years. The committee last met to discuss the proposal in September 1995. At press time, no further meetings were scheduled on the bill.
Several lawyers agreed that some restrictions are needed on who can provide legal services in Poland.
"As a step in the right direction, it's something good," Witold Danilowicz, head of White & Case (Poland), said of the foreign investment law. "Now we still have to deal with proposed legislation on who can provide legal services," he added.
"There seems to be no real regime governing the provision of legal services in Poland," said Nick Fletcher, local partner at Clifford Chance.
"It would seem that, in theory, anybody could come here and set up a law firm," Fletcher added. While he does not think that will happen, he said that, in light of the new joint-venture law, lawyers will put additional pressure on the Sejm to pass legislation regulating the profession.
Indeed, a movement is already under way to do that.
"The Polish Lawyers' Association will probably push the attorneys and legal advisers' law to introduce some limitations for foreign firms," said Dorota Hajduk, deputy president of the Warsaw branch of the Association of Polish Lawyers. There is a feeling among Polish lawyers that their foreign counterparts have more rights here than Poles would ever had abroad, she said. She declined to elaborate on what some reasonable limitations might be.
The National Council of Legal Advisers and the Association of Polish Lawyers protested against the foreign investment law in favor of keeping licensing restrictions for law firms with foreign ownership.
Krzysztof Stefanowicz, legal counsel to Hogan & Hartson in Warsaw, said, "The joint-venture law should not be regarded as the final decision on this thing."
The law also brings Poland one step closer toward membership in the Organization for Economic Cooperation and Development (OECD), said Janusz Szymanski, a representative from the Labor Union Party who chaired the subcommittee working on the joint-venture law in the Sejm.
Jacek Siwicki, senior vice president of Enterprise Investors in Warsaw and former deputy privatization minister, was equally positive.
"Despite whatever concerns you could have of the new ruling coalition ... this is a clear signal they want foreign investors' lives to be easier," said Siwicki, whose venture capital firm manages $350 million in funds.
Siwicki is currently seeking to raise more than $100 million for a private equity fund from international investors. He said the law might persuade investors to put money into Poland.
"The changes in the legislation will allow me to add one more argument that things are not getting worse here, but getting better," he said.
The joint-venture law was proposed by the government, which sent the bill to the Sejm as an "urgent project." It was passed Thursday by Parliament's upper house, the Senate. Also during Friday's session, the Sejm approved a bill the Senate had previously rejected, making it easier for foreigners to purchase land in Poland (See Property Watch, p. 5). Both bills await final approval by President Aleksander Kwaćniewski.
Lawyers said the law is an encouraging sign for foreign investors, both in the legal sector and without.
"It looks like it's a very positive incentive for foreign investors and also for foreign law firms," said Jur Gruszczynski, a managing partner in Baker & McKenzie's Warsaw office.
Szymanski said the law creates better conditions, not just for foreign firms who want to open offices here, but for Polish lawyers as well. Foreign firms have to employ Polish lawyers, he noted.
But there are still some clouds on the horizon for foreign-owned law firms. While Parliament has passed the joint-venture law, another bill restricting ownership of law firms to licensed Polish attorneys and legal advisers remains pending.
That proposal, which was heard by the Parliament in September 1994, says that a law firm has to be a partnership between attorneys and/or legal advisers who have passed the Polish bar. A requirement for taking the bar is Polish citizenship. The law, submitted to the Parliament in June 1994, has been sitting in the Justice and Human Rights Committee for more than two years. The committee last met to discuss the proposal in September 1995. At press time, no further meetings were scheduled on the bill.
Several lawyers agreed that some restrictions are needed on who can provide legal services in Poland.
"As a step in the right direction, it's something good," Witold Danilowicz, head of White & Case (Poland), said of the foreign investment law. "Now we still have to deal with proposed legislation on who can provide legal services," he added.
"There seems to be no real regime governing the provision of legal services in Poland," said Nick Fletcher, local partner at Clifford Chance.
"It would seem that, in theory, anybody could come here and set up a law firm," Fletcher added. While he does not think that will happen, he said that, in light of the new joint-venture law, lawyers will put additional pressure on the Sejm to pass legislation regulating the profession.
Indeed, a movement is already under way to do that.
"The Polish Lawyers' Association will probably push the attorneys and legal advisers' law to introduce some limitations for foreign firms," said Dorota Hajduk, deputy president of the Warsaw branch of the Association of Polish Lawyers. There is a feeling among Polish lawyers that their foreign counterparts have more rights here than Poles would ever had abroad, she said. She declined to elaborate on what some reasonable limitations might be.
The National Council of Legal Advisers and the Association of Polish Lawyers protested against the foreign investment law in favor of keeping licensing restrictions for law firms with foreign ownership.
Krzysztof Stefanowicz, legal counsel to Hogan & Hartson in Warsaw, said, "The joint-venture law should not be regarded as the final decision on this thing."
