Acquisition of real estate by foreigners in Poland
As a rule any foreigner willing to acquire real estate in Poland (directly or by means of acquisition of shares in a Polish company owning real estate) must obtain a prior permit from the Minister of Internal Affairs and Administration. The acquisition of real estate or shares in a Polish company owning real estate without such permit is invalid. This rule does not apply (with certain exceptions concerning agricultural and forest land) to the citizens of and legal entities registered in the member states of the European Economic Area comprising the EU states, Iceland, Norway and Lichtenstein, and the Swiss Confederation (the "Union Foreigners").
Definition of a foreigner
A foreigner is: (i) an individual without Polish citizenship (the documents proving Polish citizenship are a Polish passport or ID); (ii) a legal entity with its registered seat outside Poland; (iii) a company having no legal personality, formed by the persons referred to in sub-clauses (i) or (ii) above, having its registered seat outside Poland and established according to the laws of a foreign state; and (iv) a legal entity / a company having no legal personality, which is resident in Poland and directly or indirectly controlled by the persons referred to in sub-clauses (i), (ii) and (iii) above (the "Controlled Entity").
A company is considered controlled by a foreigner when: (i) a foreigner directly or indirectly holds more than 50% of the votes at the shareholders' meeting, including as pledgor, usufructuary or under arrangements with the other persons, or (ii) a foreigner has a dominant position within the meaning of the Commercial Companies Code dated 15 September 2000 (the "Code").
A permit for the real estate acquisition is issued by the Minister of Internal Affairs and Administration, unless the Minister of National Defence or the Minister of Agriculture and Rural Development makes an objection. A permit is valid for two years. The Minister of Internal Affairs and Administration may grant a foreigner a permit to acquire real estate or shares in a company owning real estate: (i) if such acquisition does not pose a threat to national security and public order and is not contrary to social policy or public health considerations; and (ii) if a foreigner proves the existence of circumstances confirming his ties with Poland (e.g. a foreigner is married to a Polish citizen, a foreigner is ethnically Polish, a foreigner carries out a commercial activity in Poland in accordance with the Polish laws).
A foreigner intending to acquire real estate in Poland may seek a promise of permit issuance (promesa). The promise is valid for one year from the date of issue. The permit cannot be refused while the promise is valid, unless there have been material changes in circumstances. The companies usually apply for a promise of permit issuance in the case of acquisition of real estate via a tender.
Exemptions applicable to all foreigners
The foreigners are exempt from obtaining the permit in the following cases:
- acquisition of real estate by statutory succession;
- acquisition of or subscription for shares in a Polish company admitted to public trading;
- transformation of a company as defined in the Companies Code;
- acquisition of independent residential premises as defined in the Act on Ownership of Premises dated 24 June 1994;
- acquisition of independent non-residential premises designated for a garage;
- acquisition of real estate by foreigner residing in Poland for at least five years since the issuance of a permanent residence permit;
- acquisition of real estate by foreigner married to a Polish citizen and residing in Poland for at least 2 years since the issuance of a permanent residence permit, where the real estate will become the joint property of the spouses;
- acquisition of real estate by foreigner if on the day of acquisition the foreigner is entitled to a statutory succession from the transferor and the transferor has been the owner or perpetual usufructuary of the real estate for at least 5 years;
- acquisition by the Controlled Entity for its statutory purposes of an undeveloped real estate with an aggregate area, throughout the entire country, not exceeding 0.4 ha in towns and cities;
- acquisition of real estate by a foreign bank holding a mortgage by seizing ownership of real estate following an unsuccessful auction during enforcement proceedings; and
- acquisition of or subscription for shares by a bank being a Controlled Entity in connection with enforcement of the bank’s claims under banking operations, etc.
The above exemptions do not apply to real estate located in the border zone and to agricultural land plots exceeding 1 ha.
Exemptions from the general rule applicable to the Union Foreigners
The Union Foreigners are not required to obtain a permit for the real estate acquisition in Poland, except for the acquisition of agricultural and/or forest real estate before 2 May 2016.
There are voivodeships (Polish administrative units) where the Union Foreigners are not required to obtain a permit under certain conditions even though they acquire agricultural real estate. For example, in Dolnośląskie, Kujawsko-Pomorskie, Lubuskie, Opolskie, Pomorskie, Warmińsko-Mazurskie, Wielkopolskie, Zachodnio-Pomorskie voivodeships, the permit is not required if 7 years have expired from the date of concluding a lease agreement and if during this period of time the Union Foreigner ran a farming business on this real estate and legally resided in Poland. In Lubelskie, Łódzkie, Małopolskie, Mazowieckie, Podkarpackie, Podlaskie, Śląskie, Świętokrzyskie voivodeships, the permit is not required if 3 years have expired from the date of concluding a lease agreement and if during this period of time the Union Foreigner ran a farming business on this real estate and legally resided in Poland. The Union Foreigners do not need to obtain a permit in order to acquire or subscribe for shares in a company holding agricultural real estate.