Foreign investors don’t have it easy on the Vistula River. These are the greatest Polish sins

Poland is increasingly appearing on the maps of global investors who are looking for stable but dynamic markets. The domestic senior living and dormitory sectors attract attention not only because of the scarce supply, but also because of the potential for high returns. It is a combination of demographic trends, the growing number of foreign students and an aging society that makes us an attractive market for foreign capital.

– Today, Poland is attracting record interest from foreign capital – especially in the senior housing and dormitory sectors – say experts from Lafrentz Polska.

As they note, it is a market of high returns, but also high demands.

Expert: “The differences in the pace and logic of administrative processes are surprising”

Although the growing openness of public institutions to foreign capital is noticeable, potential investors must face a reality for which they are not always prepared. These are primarily procedural and legal obstacles.

– The biggest surprise is often the differences in the pace and logic of administrative processes. Investors from Western countries are used to high predictability. In Poland, the duration of procedures varies greatly – even in the case of similar projects – which can completely disrupt the schedule without a local advisor – notes Mateusz Durski, vice-president of the management board of Lafrentz Polska.

The most important barriers for foreign investors

Entering the Polish market is not without challenges. Administrative procedures can be unpredictable, and local legal and planning conditions can extend project implementation times by up to several months. As a result, experienced investors emphasize that success requires not only capital, but also in-depth knowledge of local regulations and the support of experts with experience in Polish realities.

The most frequently mentioned barriers are:

• Construction law and administrative procedures – a complex system of permits and environmental decisions prolongs the implementation of the investment.

• Environmental regulations – obtaining a decision requires public consultations and investment impact analyses.

• Contract risks – delays resulting from contractor shortages, fluctuating material prices or different interpretations of regulations.

• Local planning conditions – the lack or limitations of development plans result in long-term administrative proceedings.

– Entering the Polish construction market requires a thorough understanding of local procedures. Projects that are implemented at a predictable pace in other countries may encounter formal, procedural and contractual barriers in Poland, warns Durski.

How to invest safely in Poland?

According to experts, safe investing in Poland requires, first of all, understanding the local formal and procedural conditions. It is crucial to plan the schedule realistically, because the waiting time for administrative decisions varies depending on the region and type of investment.

– Foreign investors often assume that the procedures work the same as in their country, and this is one of the most common mistakes. Therefore, it is worth engaging a local technical and procedural advisor from the very beginning, who will help you avoid mistakes that can cost months and hundreds of thousands of zlotys – points out Durski.

He emphasizes that it is best if the advisor is involved already at the stage of feasibility analysis and plot selection.

– This allows you to avoid a situation in which an investor buys land with environmental restrictions, unregulated access to a public road or inability to connect to technical infrastructure. The advisor’s support is also important in environmental decisions, development conditions, building permits, cost optimization and contracting contractors. The earlier the consultant enters the project, the less there is to “put out fires” at later stages – adds the vice-president of Lafrentz Polska.

In his opinion, contractual compliance is no less important. The use of FIDIC standards, joint and several liability of contractors and appropriate financial security minimize the risk of disputes.