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The Warsaw Voice » Real Estate » March 5, 2008
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Expert Opinion
March 5, 2008   
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A LAWYER'S VIEW ON THE EXPANSION OF INVESTMENTS IN CENTRAL AND EASTERN EUROPE

Poland has been chosen by many investors as a centre for other operations in the south and east of Europe. How does this affect the activities of GLN as a law firm?

AL.: Expansion in a new country is a challenge - an opportunity for success and a source of concerns at the same time. GLN has offices all over Europe, including in the cities attracting the most attention, such as Kiev, Moscow, Bucharest, Sofia (associated office), Belgrade or Istanbul. Investors in new lands want a safe haven and a guide - business partners, advisors or lawyers who have gained the investor's trust in another country, such as Poland. Remember that we gained vital experience while Poland transformed, and we went through an economic expansion ourselves at a time when Poland was just an unexplored land on the borders of the EU.

Being a guide, it sounds almost spiritual. Is that what your law firm deals with?

BO.:This certainly isn't our main activity. We provide our clients with legal assistance, help them understand the local law and advise them on how to protect their interests in business dealings in a foreign country.

AL.:It is also true that the people responsible for expansion into foreign markets have often worked previously in Poland and have extensive knowledge of the Polish market. They tend to regard foreign markets from the angle of this particular experience. Therefore, by "translating" local requirements in comparison to Polish ones, we help them understand the new market better. Thanks to our experience, we are more aware of the issues that need special attention, and are able to ask the right questions on behalf of our client.

The lawyer-guide, lawyer-translator. What other roles do you perform?

BO.:Clients expect lawyers to have a flair for business. This is especially important in a foreign country, where clients may feel blindfolded and want to rely on trustworthy partners. The client often ask how to "run the whole show" ...

Are there any particular legal risks that investors are afraid of?

AL.:Certainly, looking at the path taken by investors. Firstly they ask how to acquire full ownership and unencumbered real property, then inquire about the structures that can be built on the acquired land and the permit process. The issue of mortgaging the land is equally important in terms of financing the project. Other questions include restrictions on the flow of capital, judicial efficiency and the enforceability of judgements. It is not always encouraging.

Don't you scare investors off?

AL.:Lawyers try to assist clients with investments, rather than place obstacles in the way. We provide comprehensive information on legal provisions, but if there are problems we examine them in a broader context, find solutions and consider risks. We may suggest that the client accepts the risks involved, or abandons a given investment, but this is an inherent part of any business dealing.

Obviously, Romania and Bulgaria, thanks to joining the EU, seem to be a safer target for Western European investors as they assume that these counties must have implemented the EU standards.

BO.:In principle, this is true, but you cannot take it for granted. The new member states have transitory periods, and some EU solutions have not been implemented yet.

Is there any cure-all?

AL.:We're all looking. Investors want to work with a local partner who knows the local market, and most importantly a trustworthy and a reliable partner. That is a problem, as trust cannot be bought. The only way is to take the risk and try it out, which can go either way. Some companies choose their own way and gather the necessary experience on their own.

Further expansion?

BO.:Certainly. Outside Europe, the most dynamic GLN offices are: in China, including Hong Kong, Vietnam, and Rijad. I think that our clients would agree that the most dynamic activities are carried out between these places and Warsaw, the new common economic area of Eurasia or Eurasia and Arabia. Our law firm has always been at the forefront of economic expansion, and we will stay there.

Bertrand Oldra, Partner
Andrzej Lulka, Partner
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