Polish lawyers are actively discussing two legislative acts – one regulating family foundations and the other focused on remote work – set to impact their practices, according to KWKR Konieczny Wierzbicki & Partners Managing Partner Michal Konieczny.
"In Poland, a new law establishing a new type of entity is just coming into force," Konieczny begins. "In May 2023, a new act will be introduced to regulate family foundations." He points out that "family businesses have been popular in Poland but, until now, they had no specific regulation regarding succession in Polish law. As a result, their assets are often placed abroad in various forms, which was quite costly." According to him, "the purpose of family foundations is to create a structure to support businesses over generational transitions and to support the successor. The business and the family would be formally separated, with the family being the beneficiary of the foundation. The foundation would be managed professionally to protect the assets in case of the retirement of the founder of the family business."
Konieczny believes that family foundations could be quite a popular type of entity in Poland because the legislation also sets out favorable tax solutions for them. "The establishment of such foundations will not be taxed, and transferring assets to them will also not be taxed," he notes. "Additionally, the acquisition of property rights for the beneficiaries of family foundations will not be subject to inheritance or donation taxes. Therefore, beneficiaries may become beneficiaries without any tax costs."
Moving on to remote work, Konieczny highlights new regulations on remote work that are set to come into force in Poland. "Before the COVID-19 pandemic, there were regulations in place for teleworking, but they were over-regulated and not commonly used in the market," he says, adding that "during the pandemic, temporary regulations were introduced to support employers in maintaining their business operations, making distance working less strict, more flexible, and easier to implement." Now that these temporary regulations are expiring, he says "an amendment to the Polish labor code has been introduced."
According to Konieczny, law firms will need to comply with new remote work themselves: "this has led to shifts in the work of law firms." Additionally, "businesses are more open to remote work, especially those in IT or new technology, with 80 to 90% of employees working remotely regularly, with fewer days in the office. The new regulations will come into effect in April, and it is high time for compliance work," he notes.
Konieczny also highlights some current developments in the Polish market. "Currently, the market appears to be stable, but the real estate sector is less dynamic due to inflation and high loan costs. Sales of new apartments have stalled and are significantly lower than last year, resulting in the sector being less active and in a holding pattern," he notes. "Regarding M&A, I did not observe any negative developments, however, there is still less activity," Konieczny points out. "While the ongoing deals continue to proceed, unfortunately, we are not witnessing many new projects starting or picking up, and it is unlikely that we will see a large number of new and exciting projects in the market, for at least the first half of the year."