Szkolenia

Seminarium Finpro w Helsinkach

Michał Tomczak presentation at Finpro Seminar dedicated to investment in Poland, held in Helsinki on April, 7th, 2014,

Legal risks in Poland toolbox for Finnish companies

Changing picture

•    25 years of the Polish renewal after a collapse of autocratic, Soviet-born and Soviet-supported system.
•    10th anniversary of Polish accession to EU.

These anniversaries are good occasion to change a general overview.
    
Meaning of legal risk

•    What is a legal risk? There is no scientific definition.
•    Here either objective or subjective approach is possible.
•    Objectively legal risk is there when legal system does not work properly or does not work at all.
•    Subjectively legal risk is based on a difference of law in the mother country and the target country. Such a legal risk is  everywhere.

Subjectively perceived legal risk takes place when certain legally based solutions in the foreign country come as surprise, meaning they are different than in the investor’s mother jurisdiction.

No legal risk in objective meaning

•    In nineties of 20th century in Poland foreign investor was facing objective, fundamental risk of being materially damaged by the lack of proper effectiveness of the legal system.
•    These years are gone.

There is no material legal risk in Poland – not of the fundamental kind.

Why there are no major legal risks in Poland?

•    Polish legal system has the same fundaments as Finnish one:
•    Latin law, Napoleonian Code and German legal tradition,
•    rule of law,
•    special regulations for business.
•    Transparent legal system, becoming more and more integrated with western legal culture.
•    Polish legal system as EU system consists of harmonized part and not-harmonized part. Note that law never operates independently from the culture. Though probably legal culture is more different than the law.

However, even if there are irregularities, they may be easily mitigated by professional advisors.
To our knowledge no Finnish investment failed due to legal problems.

Six protective principles for the Finish investors in Poland

•    PRINCIPLE 1: Diversified and unpredictable application of law (heterogeneous country, variety of legal concepts, formal independence of courts – certain unpredictability of official orders and court decisions).
•    PRINCIPLE 2: Limited trust in legal relations (formal relations, based on written documents and certain level of distrust between the parties to the legal relation).
•    PRINCIPLE 3: Patience when dealing with courts and governmental institutions (protracted proceedings).
•    PRINCIPLE 4: Understanding for two different types of law (harmonized law and not-harmonized law).
•    PRINCIPLE 5: Sensitivity towards certain particulary active governmental institution (eg. antitrust office or personal data protection office which are more active and intervening).
•    PRINCIPLE 6: How to treat corruption (thinking about corruption blocks and slows official procedures and influences on legal actions).

Summary

•    Words of law in Poland differs only a little when comparing to Finland.
•    Legal culture differs more – due to the size of the country, cultural level and political tradition.
•    The main differences are concentrated on the role of trust versus security measures and penalties in arranging legal relations.
•    Proper preparation of investment and wisely selected advisors can certainly mitigate any and all risks related to legal differences in practical aspects of the system.

 Do góry