In our Looking In series, we talk to Partners from outside CEE who are keeping an eye on the region (and often pop up in our deal ticker) to learn how they perceive CEE markets and their evolution. For this issue, we sat down with Baker McKenzie Stockholm Partner and a member of the firm’s Global Executive Committee Anders Fast.
CEELM: What was your first interaction with the CEE region?
Fast: My personal journey with the CEE region began in the late nineties when I did my first transactions involving the CEE region. Since then, I have had the pleasure of working on numerous projects and transactions in the region.
Witnessing the transformative changes in the CEE markets has been incredibly rewarding. Since the opening of our first CEE office in Budapest in 1987, Baker McKenzie has significantly expanded its footprint. With close to 400 lawyers in six markets, we are now one of the biggest international law firms in the region.
CEELM: What has been keeping you busy in the last 12 months?
Fast: The CEE region is very diverse, and businesses operating in the region are faced with complex legal landscapes, significant compliance challenges, and fluctuating market conditions. We advise our clients in the region on a broad mix of transactional, contentious, and advisory matters across multiple sectors.
In Hungary for instance, compliance and investigation work surged for us in the past year, partly driven by the rise of AI, which presents novel legal challenges. We have also seen strong demand in the private M&A sector, with a focus on mid-market transactions, as well as foreign direct investments in the automotive industry.
Distressed M&A, carve-outs, and post-M&A dispute work have been prominent in Austria. Insolvency work has also kept our teams in both Austria and the Czech Republic busy. Our lawyers in the Czech Republic have also advised our clients on a significant number of M&A transactions, in particular in the IT, energy, pharmaceuticals, and healthcare sectors.
The rebound of the commercial real estate market in Poland has generated various workstreams for our transactional teams. We have also advised several Polish companies active in Ukraine’s reconstruction efforts and seen an uptick in tech sector disputes as well as energy transition projects – an area in which we have strengthened our capabilities this year with the addition of Agnieszka Skorupinska in Warsaw.
In Ukraine, we had a strong focus on transactions in the infrastructure, energy, and agricultural sectors, along with banking regulatory work and sanctions compliance advice for both international and domestic businesses.
CEELM: What are the sectors or industries poised for growth in CEE?
Fast: The CEE markets’ competitive edge has long been rooted in the manufacturing sector. The Czech Republic, Poland, and Hungary consistently rank among the top industrial performers globally, with Hungary poised to be Europe’s number one battery cell producer by 2026. While Europe’s electric vehicle (EV) market saw a slowdown in 2024, the CEE region is expected to see growth through investments, in particular in the Czech Republic.
At the same time, the growth model of the region is evolving, with a gradual shift toward higher value-added services. For instance, the technology sector – particularly AI and digital services – is rapidly expanding in Hungary, the Czech Republic, and Austria. The defense, military technology, and advanced manufacturing sectors, including drone technology, also present new opportunities.
Despite the ongoing conflict, Ukraine’s infrastructure shows significant growth potential by 2033. Polish companies are already investing in Ukraine, leveraging cultural proximity and knowledge in public procurement in sectors such as energy, transport, and construction.
Lastly, the energy sector will continue to grow in the region, with a focus on renewables, nuclear energy, and modern energy infrastructure development, in particular in Poland, Hungary, Austria, and the Czech Republic. This is driven by a combination of EU sustainability goals and national initiatives.
CEELM: What are the most promising markets in CEE? What about the most challenging?
Fast: Poland’s economy is projected to grow by 4% in 2025. Over the past three decades, the country’s rapid GDP per capita growth has made it a prime destination for FDI, particularly in the EV supply chain. Its strong industrial base, growing tech sector, and strategic location make it a promising market.
Meanwhile, in light of the ongoing war, Ukraine is currently the most challenging market but is also likely to present significant opportunities in the longer term. The country’s legal and institutional framework, along with its natural and human resources, make it a promising market for reconstruction-focused investment, particularly in the energy and transport sectors, as well as investment in its titanium and lithium resources.
At a macro level, financing costs and regulatory hurdles across the region continue to pose significant challenges. Embracing innovation and new technologies will be pivotal in evolving the growth model and driving future economic development.
CEELM: What is your perspective on international companies in CEE? How will their presence evolve?
Fast: The presence of international companies in the CEE region is expected to grow, building on what global businesses already see as a favorable environment. Investment volumes across the CEE-6 region reached EUR 5 billion in 2024, with Turkiye alone recording USD 417 million in FDI inflows via equity capital. This is driven by the CEE’s proximity to major markets and the region becoming a hub for manufacturing sectors such as electronics, machinery, and high-value goods, and a destination for Shared Service Centers and Business Service Centers (BCSs). More than 200 multinational corporations operate BCSs in Hungary alone.
Several elements suggest that this trend will continue, although global geopolitical risks may slow the pace of international expansion. The International Monetary Fund predicts that the CEE region’s real GDP growth will surpass the G7 average by 2027, and industrial production is expected to grow at an average rate of 2.8% from 2025 to 2030. More tech giants are establishing themselves in the region too, making CEE a hub for research and development activities with Poland, the Czech Republic, and Hungary being particularly attractive. The region is also a nearshoring hotspot for multinational companies, offering advantages such as geographical proximity, business resilience, and greenfield opportunities.
CEELM: What types of work do you expect to see the most in the next 12 months in CEE?
Fast: Although high interest rates and inflation remain challenging, the CEE region’s strengths, adaptability, and market maturity provide a solid foundation for growth. From an M&A perspective, we anticipate the value of deals will increase, with a focus on larger, strategic investments.
Nearshoring will continue to attract FDI, particularly in higher value-added sectors such as IT and business services. There will also be continued emphasis on attracting strategic investments in sectors like digital infrastructure, clean technologies, and AI, which are crucial for maintaining competitiveness and fostering innovation. This will pick up in Hungary, the Czech Republic, and Poland, where the ICT sector is expanding due to digitalization and their skilled workforce.
It is also important to recognize the impact of global dynamics on regional activity. The global energy transition remains a focal point across the entire region, with significant investments in renewables, nuclear projects, and infrastructure modernization on the horizon. Meanwhile, Austria will likely see more distressed M&A opportunities, particularly in sectors such as retail, hospitality, startups, and manufacturing, which are more vulnerable in the current economic context.
Despite global shifts, some regional sectors will maintain strong momentum. Hungary’s automotive industry, a cornerstone of the economy, will see steady growth even amid uncertainties. Poland’s real estate market – in particular in terms of office spaces and ESG upgrades – is also projected to remain robust, reflecting sustained investor confidence and demand.
This article was originally published in Issue 11.12 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
