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The Warsaw Voice » Business » February 4, 2010
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Promised Land for Spanish Investors
February 4, 2010   
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Over the past five years, Spanish businesses in Poland have been heavily investing in sectors such as real estate, banking (primarily through Banco Santander and La Caixa) and the automotive industry. Now interest has switched to renewable energy.

n "Spanish investors have felt the effects of the economic downturn in their home market, and investments in Poland have become an antidote for the slowdown in Spain," says Carlos Rapallo, Managing Partner of Garrigues' Warsaw Office. "In 2010, large Iberian companies are considering significant investments of around 500 million euros in renewable energy and infrastructure developments." The office, which is among the largest law firms in continental Europe, was launched in early 2007 and since then has become the reference point for Iberian investors in Poland.

Garrigues sees great potential in the local market and is currently focusing on Polish clients Poland remains a land of opportunity for Garrigues. As a result, Garrigues plans to strengthen its position in Poland as a regional hub for the firm's expansion.

"Poland is a top priority in our international expansion, with Warsaw acting as the operational center of our presence in the CEE region," says Carlos Rapallo, who took over as Managing Partner in Warsaw in late 2009.

Garrigues initially advised leading Spanish bank La Caixa and major airline Iberia upon their arrival to Poland, alongside more than 20 real estate companies which had invested around 1.5 billion euros (5.5 billion zlotys) in this country.

The increase in the number of lawyers is also a reflection of the firm's expansion plans in the region. Currently, Garrigues' team in Warsaw is composed of 14 lawyers but the management plans to increase that number to 20 by the end of 2010. Garrigues' Warsaw team relies not only on local staff, but also on the firm's vast global network, which stands out in areas such as environmental law, sports and entertainment, PPP and renewable energy.

The Spanish firm is now active in attracting Polish clients who have approached Garrigues as a result of previous professional relations and through references provided by other clients or institutions.

"Today we provide legal services to several dozen Iberian investors, leading energy companies Taiga and Iberdrola, and real estate companies Realia and Lubasa, as well as the Iberia airline and including cooperation with banking institutions Banco Espirito Santo and Bancaja, but we strongly believe that our pool of Polish clients will grow exponentially thanks to our excellent team of lawyers and our transactional expertise, which has boosted our brand in the local market," says Rapallo.

Spaniards are investing, but how much?
The total value of Spanish investments in Poland remains difficult to assess. According to data by the National Bank of Poland (NBP 2009**), Spanish companies invested more than 4 billion euros between 2000 and 2008, including real estate investment. The Association of Madrid Investors (ASPRIMA) estimates that Spanish investment in the Polish real estate market alone reached 3 billion euros during that period.

Spanish companies are also interested in the hospitality industry and in logistic centers. They are planning to build hotels in anticipation of the Euro 2012 soccer tournament. Nonetheless, representatives of the Iberian law firm are cautious about the estimated total value of Spanish investment in Poland. Spanish companies are interested in the "green" market and in strategically acquiring Polish companies. They are also interested in technology transfer. Spanish real estate company Dragados' offer to acquire Pol-Aqua and FCC's involvement in the construction of the National Stadium through Alpine are two standout examples.

New areas of interest
The ranks of Iberian investors are likely to expand soon. "We believe that a number of large Iberian companies would like to invest in wind energy and biomass in Poland," says Rapallo. "Companies like Gamesa, Endesa, Iberdrola and Acciona Energy have already invested in those areas co-financed by the so-called European Structural Funds. In this area, Garrigues, through its office in Brussels, offers its clients unparalleled experience and know-how in EU law, complemented by its extensive knowledge of EU institutions."

Garrigues-worldwide legal tycoon
Garrigues is the largest law firm in continental Europe by billings-it registered 334.3 million euros in revenues in FY09-and professional head count, with 2,061 professionals. It is a full-service independent law firm with offices in 29 cities across the Iberian Peninsula. It excels in virtually every practice area such as M&A, commercial, environmental law, real estate, planning and public law, restructuring and insolvency, arbitration and litigation, labor, national and international tax, IP & IT, and antitrust counseling. Its integrated approach allows the firm to provide clients with a full perspective combining transactional, regulatory and tax implications in every assignment.

Garrigues has always shown a particularly strong international focus, with overseas offices in New York (since 1973) and Brussels (since 1986). In recent times, as clients' requirements for global services have grown, Garrigues' operations have expanded to four continents through its own offices in Brussels, Bucharest, Casablanca, Lisbon, London, New York, Oporto, Shanghai, Tangiers and Warsaw.

The firm enjoys absolute leadership on the Latin American legal market through Affinitas, the Garrigues-promoted exclusive alliance of top-tier law firms. Garrigues is also a founding member of Taxand, the first independent specialized global tax alliance currently present in over 40 countries, and a member of World Services Group, a network that brings together a full spectrum of leading professional services firms and companies worldwide.

** Source: Value of Spanish investments in Poland-NBP data 2009
Spanish companies are estimated to have invested more than 1.4 billion euros between 2000 and 2008, or 4 billion euros when real estate investments are taken into account (e.g. purchases of investment sites). Polish foreign direct investment in Spain is still tiny in comparison, at less than 60 million euros between 2000 and 2008. Polish business activity is evident, first and foremost, in the construction, property, training and transport services sectors and also in agency operations and commercial consultancy.
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