UK financial market entities in Poland – A Polish Brexit bill, passed on 15 March 2019, provides a transition period for the business operations of UK financial market entities in Poland, starting from the date of a "no-deal" Brexit. This period will allow businesses to conduct any legal operations needed to cease legal relationships entered into before the day of "no-deal" Brexit, or to establish a legal basis to continue to operate in Poland (i.e. by obtaining the correct permit). The Polish Brexit bill names specific financial market business types and contains details on permitted and forbidden activities within the transition period. The length of the transition period differs depending on business type, but typically does not exceed 12 to 24 months. The approach of the Polish authorities is intended to create a mechanism for UK entities to cease their activities and allow them time to do this. This is a different mechanism from the one applied, for example, in Germany, according to which, the German financial market supervision authority shall grant the extension of passporting rights resulting from EU laws. The Polish Brexit bill seems to be stricter, but creates a clear and transparent set of rules for the contingency of a "no-deal" Brexit, at least with regard to the time aspect of the transition period for the UK firms.
UK-regulated professionals operating in Poland – A second Polish Brexit bill, also passed on 15 March 2019, provides that decisions issued in Poland recognising the qualifications of regulated professions based on their UK qualifications will continue to be recognised in Poland. A transition period applies for applications for recognitions that are in progress.
Immigration status of UK nationals in Poland – A third Polish Brexit bill, also passed on 15 March 2019, provides that British nationals residing in Poland will have 12 months from the date of a "no-deal" Brexit to confirm their rights by obtaining a temporary residence permit or permanent residence. The right to apply will be granted to all British nationals and their family members, even if they are not British citizens: spouses and children (up to 21 and dependent) and parents (dependent), who had been legally residing in Poland until the day of the UK's withdrawal from the European Union.
Poland's government strongly favours a Brexit on the basis of the Withdrawal Agreement and is against a "no-deal" Brexit. The most important issue for the Polish government is the status of Poles living in the UK, which the government states is dealt with satisfactorily in the Withdrawal Agreement. If there were a "no-deal" Brexit, Poland's Prime Minister has announced that he has an understanding with the UK government that would also protect the rights of Poles living in the UK.
Further, the government has set aside an additional PLN 1.5 billion (c. £304 million/€350 million) in the 2019 budget to pay for the expected increase in member state allocations payable to the EU.
A key aspect is that following Brexit on the basis of the Withdrawal Agreement, Poland's business with the UK will be regulated on the same basis as that of other EU member states. Thus, the vast majority of the advice provided to Polish businesses is to keep up-to-date on the guidance issued by the European Commission. The key areas of focus for Polish businesses are:
- Prepare for dealing with the transfer of personal data to the UK
- Support for firms exporting to and importing from the UK with regard to customs, tariff and regulatory issues, with particular emphasis on customs duty and VAT registration
- Pharmaceutical companies – follow updates of the European Commission regarding the registration of medicinal products
- Export of agricultural products, plants and plant products to the UK
However, several Polish-specific issues will arise upon Brexit. Polish law restricts the acquisition of real property, as well as stakes in companies holding title to real property, obliging foreigners to obtain a permit for such transaction. The law provides that EEA businesses are exempt from such restrictions. Taking the majority view that the UK will also leave the EEA at the same time as leaving the EU under Article 50, unless there is a specific regulation in this regard, UK citizens and UK business will be subject to restrictions while investing in real property in Poland, as well as acquiring shares in many companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.