Investments and transactions in Poland – legal structure before signing

Investment documents are often signed when the parties are optimistic and focused on growth. Legal problems appear later: when expectations differ, milestones are missed, the company needs another round, a founder leaves, an investor wants control rights, or due diligence reveals risk. The purpose of legal advice in investment matters is not to make the deal more complicated – it is to make the deal understandable, enforceable and safer before money, shares or control rights change hands. For UK, US, Canadian and Australian investors entering Polish transactions, the framework combines Polish Commercial Code (KSH), EU competition rules, Polish Foreign Direct Investment screening for strategic sectors, and increasingly common international term sheet templates adapted to Polish law constraints.

The firm is based in Poznań and assists clients throughout Poland, both in person and remotely by telephone or video call.

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→ What this guide covers

1. 01Term sheet – first structured document
2. 02Legal due diligence
3. 03Shareholder agreements
4. 04M&A and company transactions
5. 05Convertible loans, SAFEs and bridge financing
6. 06Foreign direct investment screening
7. 07Post-closing matters

01. Term sheet – first structured document

A term sheet (list intencyjny / term sheet) is usually the first structured document in an investment process. It may be partly non-binding, but it strongly shapes later negotiations. Even if many provisions are non-binding, parties usually negotiate the final investment agreement within the framework created by the term sheet.

Key clauses commonly negotiated in Polish investment transactions:

• Valuation – pre-money and post-money, fully diluted basis;
• Investment amount and tranches – milestones and conditions;
• Share class structure – preferred shares and their privileges;
• Liquidation preference – typically 1x non-participating, sometimes 1x participating with cap;
• Vesting for founders – a 4-year schedule with a 1-year cliff is widely used in international startup practice; it is a market convention, not a Polish statutory requirement. Source: Orrick, 2026;
• Founder lock-up – restrictions on share transfers;
• Anti-dilution protection – broad-based weighted average is standard;
• Drag-along and tag-along rights;
• Reserved matters – investor consent rights;
• Information rights – financial reports, board observer rights;
• Board composition – investor seats, independent directors;
• Exclusivity period – negotiated case by case; as an international market benchmark, the British Business Bank describes no-shop periods of around 30–90 days. This is not a Polish statutory term. Source: British Business Bank;
• Confidentiality – usually binding even if rest is non-binding;
• Costs allocation – typically caps for legal fees;
• Governing law – Polish law for shares; foreign law sometimes for shareholder agreements.

For founders, the main risk is agreeing to control or economic rights without understanding how they will operate in later rounds, exits or conflict scenarios. For investors, the risk is signing a document that does not secure the intended level of protection. The term sheet should be clear about which clauses are binding (typically: confidentiality, exclusivity, costs, governing law) and which are commercial assumptions for later documentation.

For details, see our guide on term sheets in Polish investment deals.

02. Legal due diligence

Legal due diligence is a structured review of legal risks before a transaction. It typically covers:

• Corporate documents – articles of association, shareholders' agreements, resolutions, share register;
• Capitalisation – share ownership, options, convertibles, vesting schedules;
• Material contracts – customer, supplier, distribution, licensing agreements;
• Employment – contracts, collective agreements, key person dependencies, B2B contractor risks (Polish reclassification rules);
• Intellectual property – ownership, licences, registrations, infringement risks;
• Real estate – title, mortgages, easements, building permits;
• Regulatory – licences, permits, sector-specific compliance;
• Litigation – pending and threatened disputes, settled but conditional matters;
• Tax – pending audits, transfer pricing, withholding tax exposure;
• Data protection – GDPR compliance, data processing arrangements, breach history;
• Public-law matters – environmental, labour inspections, customs;
• Sanctions and compliance – sanctions exposure, AML, anti-corruption;
• Financing – loans, security interests, financial covenants.

The aim of due diligence is not only to find problems. The aim is to decide what to do with them: adjust price, request warranties, require pre-closing fixes, secure indemnities, escrow part of purchase price, change transaction structure (asset deal instead of share deal), insure specific risks (representations and warranties insurance), or withdraw from the transaction.

For details, see our guide on legal due diligence.

03. Shareholder agreements

Shareholder agreements (umowa wspólników) regulate how the company will be controlled after the investment. Polish law allows wide flexibility – but Polish corporate law (KSH) imposes some mandatory rules that supersede contractual terms.

Common elements:

• Voting rules – supermajority requirements for specified decisions;
• Reserved matters – board and shareholder approvals required for major actions;
• Founder commitments – full-time service, non-compete, non-solicitation;
• Exit mechanisms – drag-along, tag-along, IPO procedures, buy-back triggers;
• Transfer restrictions – rights of first refusal, prohibited transferees;
• Non-compete – geographic and time scope; for a post-employment non-compete, the employee must receive compensation of at least 25% of the remuneration received before termination for a period corresponding to the duration of the non-compete, not simply 25% of the last salary;
• Dispute resolution – Polish arbitration vs. ordinary courts vs. international arbitration;
• Information rights – quarterly reports, audit rights, observer attendance;
• Anti-dilution – protection against future down rounds;
• Liquidation preferences – order of distribution on exit.

Poorly drafted shareholder arrangements often become expensive when the first serious conflict appears. The agreement should be written for both cooperation and conflict – anticipating scenarios where parties disagree, and providing clear procedures rather than just principles.

04. M&A and company transactions

In mergers, acquisitions and share deals, legal work should be coordinated with tax, financial and business analysis. Legal documents must reflect the actual transaction logic: what is being sold, what is excluded, which risks remain with the seller and what protection the buyer receives.

Standard transaction documents:

• Letter of Intent / Term Sheet – preliminary framework;
• Confidentiality Agreement (NDA) – before due diligence;
• Share Purchase Agreement (SPA) – main transaction document;
• Shareholder Agreement – for ongoing partnership;
• Disclosure Letter / Disclosure Schedules – exceptions to warranties;
• Closing Memorandum – list of deliverables at closing;
• Employment Agreements – for founders and key employees;
• Escrow Agreement – for deferred consideration;
• Transition Services Agreement – for asset deals.

Polish-law specifics for SPAs include the form required for the relevant asset. A transfer of shares in a sp. z o.o. generally requires written form with signatures notarised under Article 180 of the Commercial Companies Code, irrespective of value, subject to special S24 rules. A transfer is not made valid by a constitutive KRS entry: the company must update its share book/list of shareholders and make the required registry filings where applicable. PCC, merger-control notification and investment-screening requirements must be assessed separately for the transaction.

Legal assistance may include transaction structure (share vs. asset deal, tax-optimised structures), due diligence, negotiation of preliminary and final agreements, representations and warranties, closing documentation, post-closing obligations and dispute resolution under transaction documents.

05. Convertible loans, SAFEs and bridge financing

Early-stage Polish startups increasingly use convertible instruments as alternative to priced equity rounds:

• Convertible loans – debt that converts into shares at next financing round; standard terms include valuation cap, discount rate, maturity (typically 12–24 months), conversion triggers;
• SAFE (Simple Agreement for Future Equity) – Y Combinator instrument increasingly adopted in Poland; not a loan but right to future equity; valuation cap and/or discount;
• KISS (Keep It Simple Security) – alternative to SAFE with hybrid features.

Polish-law adaptations of SAFE/KISS instruments require careful drafting because they are not native Polish concepts. Issues include: enforceability under Polish law (some US clauses may not be enforceable), tax treatment (deemed interest, withholding tax issues), notarial form requirements for share-related agreements, and conversion mechanics aligned with Polish corporate procedures.

For US/UK investors making early-stage investments in Polish startups, choice of law in convertibles is often governed by the company’s intended exit jurisdiction – but Polish corporate law will govern the actual conversion into Polish company shares.

06. Foreign direct investment screening

Poland operates an FDI screening regime through the Polish Act on Control of Certain Investments (2015, expanded multiple times). Pre-acquisition notification and approval may be required for strategic sectors:

• energy and electricity production/distribution;
• telecommunications networks and infrastructure;
• defence industry;
• chemical industry of strategic importance;
• fuel storage and distribution;
• certain media and information technology;
• ports and airports;
• agricultural land and forests (separate regime).

Since 24 July 2025, the competent authority for the special screening regime in Articles 12a–12k is the minister responsible for the economy, not the President of UOKiK or the Ministry of State Assets. The procedure is two-stage: the preliminary screening stage lasts up to 30 business days; only cases requiring further scrutiny proceed to the proper control proceedings, which may last up to 120 days (with statutory rules that can affect the running of time). The investor-origin test uses the EU/EEA/OECD framework rather than a simple “EU versus non-EU” distinction, so investors from the UK, US, Canada and Australia should not be described as automatically facing enhanced scrutiny merely because they are outside the EU. Source: Ministry of Development and Technology – foreign investment control.

Failure to obtain required approval before transaction completion can result in nullity of the transaction and substantial fines. Pre-deal screening of FDI applicability is part of standard transaction due diligence for foreign acquirers.

07. Post-closing matters

The transaction does not end at closing. Post-closing matters typically include:

• Registration in KRS – a share transfer must be reflected in the company's share book/list of shareholders and in required registry filings where applicable, but a KRS entry is not a general constitutive condition for the validity of the transfer;
• Tax filings – PCC (1%) on share purchases, CIT implications, VAT for asset deals;
• Earn-out monitoring – tracking against agreed metrics;
• Warranty period – typically 12–24 months for general warranties, longer for specific (tax, environmental, IP);
• Indemnification claims – process for raising and resolving claims;
• Escrow release – coordination of deferred payment release;
• Integration matters – corporate restructuring, employment harmonisation, IT systems integration;
• Compliance updates – NewCo position relative to existing group obligations.

Many post-closing disputes arise from lack of clarity in transaction documents about handling of specific events (warranty claims procedures, earn-out adjustments, integration disputes). The Law Office advises both buyers and sellers on post-closing positioning, claim management and dispute prevention.

FAQ Frequently asked questions

∎ Summary and next steps

Polish investment law sits at the intersection of native Commercial Code framework, EU competition and consumer rules, and increasingly international transaction templates (term sheet, SAFE, SPA structures). Foreign investors gain efficient access to Polish equity markets through well-established procedures – but should account for Polish-specific factors: FDI screening for strategic sectors, notarial form requirements, antitrust notifications, and PCC stamp duty.

Key takeaways: the term sheet shapes what follows, so early legal review matters; due diligence scope and cost depend on the size, sector and complexity of the transaction and should not be presented as a fixed percentage of deal value; FDI screening may materially extend the timetable where applicable; international transaction templates require Polish-law adaptation for enforceability; warranty caps and claim periods are negotiated transaction by transaction. As a regional benchmark, CMS European M&A Study 2026 reported caps above 50% of purchase price in 63% of analysed CEE transactions. Source: CMS European M&A Study 2026.