The Polish Development Fund (PFR) is demanding the return of subsidies, this time those provided to the branches of foreign companies.
The Financial Shield of the Polish Development Fund, as a support program within the Anti-Crisis Shield intended to mitigate the impact of the restrictions associated with COVID-19, was undoubtedly an undertaking of unprecedented scale in our country.
In the face of the pandemic, whose effects on the Polish economy were difficult to predict, PFR effectively organized a support system that was the most enthusiastically received by entrepreneurs, among all programs counteracting the economic effects of the pandemic. The application procedure was conducted entirely electronically, and the funds in the form of subsidies appeared in entrepreneurs’ accounts no later than a few days after submitting the application.
From information received from across various sectors – both from entrepreneurs and from bodies legally representing businesses in Poland – it appears that PFR is checking whether the support it provided almost 3 years ago indeed went to entities that met the conditions for its receipt.
This is the case, among others, for foreign entrepreneurs’ branches operating under the Act of March 6, 2018 on the principles of participation of foreign entrepreneurs and other foreign persons in economic turnover on Polish territory.
A client who operates based on the above mentioned Act approached our law firm having received a pre-trial demand for the return of a subsidy received under the Financial Shield of the PFR. In this request, PFR doubts whether a foreign entrepreneur’s branch should have received support, claiming that it does not have the status of an entrepreneur under Polish law.
In our opinion, this issue is debatable due to the fact that a foreign branch is de facto an extension of a foreign entrepreneur’s activities in Poland, who undoubtedly has the status of an entrepreneur. By entering into agreements in the name and on behalf of the foreign entrepreneur, the branch becomes an independent and organizationally separate part of the economic activity carried out by the entrepreneur outside his headquarters or main place of activity.
PFR also accuses the entrepreneur of incorrectly defining his Small and Medium Enterprises (SMEs) status.
Furthermore, based on the information we have, at the time of granting the subsidy, PFR held a completely different position from its current one and saw no obstacles to providing support to branches of foreign enterprises. Such a change in PFR’s approach can cause surprise among entrepreneurs, but unfortunately, it is not the only case related to this program.
As a law firm specializing in public assistance, particularly in the scope of the PFR Financial Shield, we see strong arguments to support that the branches of foreign companies were entitled to receive support within the framework of the PFR Financial Shield, and the demands sent by PFR may prove to be unjustified.
Advocate Łukasz Chacia, the managing partner at Karaś i Wspólnicy Law Firm, specializes in economic disputes, commercial contracts and legal advice for entrepreneurs.
