The Act on the Acquisition of Real Estate by Foreigners stipulates that the purchase of real estate including rights of perpetual usufruct by an entity considered to be foreign is conditional upon prior permission in the form of a decision issued by the Minister of Administration and Internal Affairs if no objection is raised by the Minister of Defence and, in the case of agricultural property, if no objection is also raised by the Minister competent for rural development. Any breach of this obligation will render a transaction null and void.
However, since Poland's accession to the European Union, foreigners from the European Economic Area have not been required to obtain such a permission, except in relation to the purchase of agricultural or forest land, where a permission was required until 1 May 2016.
Where their home country allows reciprocal rights, foreign investors can establish branches in Poland to conduct business. Foreign investors from EU, EEA and EFTA member states can undertake commercial activity subject to the same regulations as Polish businesses.
Last modified 13 Mar 2025
Conducting a business activity using the real estate located in Poland is considered as having a permanent establishment in Poland. Foreign businesses can set up branch offices or representative offices in order to carry out business activities in Poland.
A branch must be registered in the Register of Businesses (Rejestr Przedsiębiorców), part of the National Court Register, and will take the name of the foreign investor followed by “branch in Poland”. Branch offices may only carry out activities within the scope of the foreign investor’s business. The minister responsible for the economy may prohibit activities by a branch in certain situations specified by law. A branch office does not have its own legal personality and the parent entity is responsible for any liability arising from its activities.
A representative office operates for and on behalf of the foreign business in Poland. It can only engage in promotion or the supply of information and is therefore not suitable for investing in real estate. A representative office must be registered in the Register of Foreign Businesses' Representative Offices (Rejestr Przedstawicielstw Przedsiębiorców Zagranicznych).
No permits are required from the authorities to establish either a branch or a representative office, but in both cases registration and an entry in the appropriate register are obligatory.
The costs of setting up a permanent establishment depend on the size of the entity, its business activities, turnover and the number of employees. It takes from four to six weeks.
There is no requirement to set up any new governing bodies for a branch or representative office: they can be managed directly from abroad. However, a foreign business is obliged to nominate a representative.
Last modified 13 Mar 2025
Direct investment, eg the purchase of real estate by a foreign entity, is allowed by Polish law, but in practice it is advisable to set up one of the following entities: a joint stock company, a limited liability company or an investment fund. Theoretically, it is also possible to invest through certain partnerships but due to unfavourable rules relating to partners’ liability, partnerships are rarely used for real estate investments.
Investment in real estate through a dedicated investment fund vehicle allows for efficient tax planning opportunities, since proper structuring allows income from rent and the sale of real estate to be free of income tax. However, due to changes related to taxation of investment fund and introducing General Anti-Avoidance Clause, any tax structure to be implemented shall adjust to new regulation.
Three types of corporate vehicle can be used for investing in real estate: the limited liability company (Spółka z ograniczoną odpowiedzialnością, sp. z o.o.), the joint stock company (Spółka akcyjna, S.A.) and the simple joint stock company (Prosta Spółka akcyjna, P.S.A.).
Last modified 13 Mar 2025
A limited liability company (Spółka z ograniczoną odpowiedzialnością, sp. z o.o.) can be established for the purpose of conducting business or for any other purpose allowed by law. It can be established by one or more individuals or legal persons, however, it cannot be established solely by another single-member limited liability company. A limited liability company is a separate legal entity liable for its own debts and obligations. Shareholders are in general not liable for the company's debts and obligations.
A joint stock company (Spółka akcyjna, S.A.) can be established to carry out business on a large scale. Capital can be raised through the issue of shares. A joint stock company may be established by one or more persons, but not solely by a single-member limited liability company. The company is fully liable for all of its debts and obligations without limitation. The shareholders are not liable for the company's obligations.
A simple joint stock company (Prosta spółka akcyjna, P.S.A.) is a novelty in Polish legislation. In this type of company, there is no typical share capital – instead, stock capital is created in the minimum amount of PLN 1. A non-cash contribution to cover shares may be any contribution with a material value, in particular the provision of work or services. Electronic communication can be widely used to adopt resolutions or hold meetings (eg videoconferences), which facilitates decision-making processes. A simple joint stock company may be established by one or more persons, but not solely by a single-member limited liability company. The company is fully liable for all of its debts and obligations without limitation. The shareholders are not liable for the company's obligations.
A limited partnership (Spółka komandytowa, sp. k.) consists of at least one partner with unlimited liability (Komplementariusz) and at least one partner with limited liability (Komandytariusz). Partners can be either individuals or legal entities.
The unlimited partnership (Spółka jawna, sp. j.) is a partnership that has at least two partners with unlimited liability.
In Poland, in terms of funds, only closed-end investment funds may invest in perpetual usufruct rights (tradable and mortgageable rights to use real estate) or the ownership/co-ownership of:
A fund may only acquire rights to real estate which have clear legal status, have not been used to provide security for funding, and are not subject to enforcement proceedings conducted by an enforcement officer in order to give effect to a court judgement. The fund is not allowed to acquire a property which is being sold by way of enforcement of security by a third party. A fund may acquire real estate encumbered with third-party rights only if this does not mean there is a risk of losing ownership of the real estate.
A fund can only be set up by a management company (Towarzystwo Funduszy Inwestycyjnych, TFI), which holds and manages the assets of the fund on behalf of the shareholders as a trustee.
Only a joint stock company (Spółka akcyjna, S.A.) with a registered office in the Republic of Poland and authorization from the Polish Financial Supervisory Commission can operate as a management company. A supervisory board is mandatory.
Last modified 13 Mar 2025
PLN 5,000. The nominal value of each share cannot be lower than PLN50.
PLN 100,000. The nominal value of each share cannot be lower than PLN0.01.
PLN 1.
There is no minimum capital for a limited partnership.
There is no minimum capital for an unlimited partnership.
The management company’s initial minimum capital must be no less than the PLN equivalent of €125,000. If the scope of the management company's activities includes discretionary management of a securities portfolio, the initial minimum capital must be the PLN equivalent of €730,000.
Total payments to the fund, to the amount stipulated in the fund's articles of association, must be at least PLN 4,000,000. Where the fund issues non-public investment certificates, the total minimum amount of payments to the fund will be set out in the fund’s articles of association.
Last modified 13 Mar 2025
Around PLN 4,000
Around PLN 11,000
Around PLN 5,000
The cost of setting up a limited partnership varies depending on the total value of the contributions from partners, as set out in the partnership agreement. For example, set-up costs for a limited partnership with contributions amounting to PLN 10,000 will be approximately PLN 1,600.
The cost of setting up an unlimited partnership varies depending on the total value of contributions from partners, as set out in the partnership agreement. For example, setup costs for an unlimited partnership with contributions amounting to PLN 10,000 will be approximately PLN 1,400.
Management company (TFI): for a standard set-up, costs are from PLN 50,000 upwards, depending on the complexity of the structure.
Fund: for a standard set-up, costs are from PLN 50,000 upwards, depending on the complexity of the structure.
Last modified 13 Mar 2025
Our experience shows that it takes from four to six weeks for a limited liability company, a limited partnership or an unlimited partnership and from four to eight weeks for a joint stock company to become operative. The registration is conducted in a one-stop-shop procedure. A motion needs to be filed at the Registry Court in the particular jurisdiction in which the seat of the company is to be located. The procedure includes obtaining a Tax Identification Number (NIP), a statistical number (REGON) and registering in the Register of Businesses (Rejestr Przedsiębiorców), part of the National Court Register). Simple joint stock company uses a simplified formal process in its formation.
Management company (TFI): up to three months.
Fund: up to three months, following the creation of the TFI.
Last modified 13 Mar 2025
Considerable flexibility on corporate governance may be provided for in the company's articles of association. A limited liability company must have a management board and hold shareholders' meetings.
Where the share capital exceeds PLN 500,000 and the number of shareholders is more than 25, a supervisory board, consisting of at least three members, is compulsory. In other cases it is optional. Rules concerning the supervisory board are normally set out in the articles of association. If the articles of association do not include such provisions, the members of both the management and supervisory boards will be appointed and dismissed by the shareholders' meeting. Members of the management board cannot be members of the supervisory board and vice versa, but members of management and supervisory board can be selected from shareholders and non-shareholders.
The management board of directors represents the company (detailed rules of representation may be provided for in the articles of association), although for some activities the consent of the shareholders' meeting is required (eg the purchase and sale of real estate), unless the articles of association specifically state otherwise. The consent of the shareholders' meeting is also required for the acquisition of any asset by the company at a price which exceeds 25% of the share capital and is not less than PLN 50,000, if the transaction takes place within two years of the initial registration of the company, unless the transaction is allowed for in the articles of association.
Shareholders' meetings must be held at least once a year.
Considerable flexibility on corporate governance may be provided for in the company's articles of association. A joint stock company must have a management board, a supervisory board and hold shareholders' meetings.
The supervisory board must have at least three members and, in the case of public companies, at least five members. Rules concerning the supervisory board and the management board are normally set out in the articles of association. If the articles of association do not include these, members of the supervisory board will be appointed and dismissed by the shareholders' meeting. Members of the management board are appointed and dismissed by the supervisory board and they may also be dismissed or suspended by the shareholders' meeting, unless the articles of association state otherwise. Moreover, they cannot be members of the supervisory board and vice versa.
The management board represents the company (detailed rules of representation may be provided for in the articles of association), although for some activities the consent of the shareholders' meeting is required (eg the purchase and sale of real estate), unless the articles of association specifically state otherwise. The consent of the shareholders' meeting (passed by two thirds of the votes) is also required for the acquisition or disposal of any asset at a price which exceeds 10% of the paid-up share capital, if the transaction takes place within two years of the initial registration of the company.
General shareholders' meetings must be held at least once a year.
Considerable flexibility on corporate governance may be provided for in the company's articles of association. A joint stock company must have a management board, a supervisory board and hold shareholders' meetings. In a simple joint stock company, instead of the management board and the supervisory board, a board of directors may be established, which gathers both management and supervisory competences.
The supervisory board is composed of at least three members, appointed and dismissed by a resolution of shareholders, unless the articles of association state otherwise. A member of the management board, commercial proxy, liquidator and head of a branch may not be members of the supervisory board at the same time.
The management board represents the company (detailed rules of representation may be provided for in the articles of association). Members of the management board are appointed, dismissed and suspended by shareholders (and if it is established, the supervisory board) for important reasons by a resolution, unless the articles of association state otherwise.
The board of directors manages the company's affairs, represents the company and supervises the conduct of the company's affairs. The board of directors consists of one or more directors. Directors are appointed, dismissed and suspended by shareholders for important reasons by a resolution, unless the articles of association provide otherwise.
An ordinary general meeting should be held within six months from the end of each financial year. The articles of association may allow participation in the general meeting by means of electronic communication.
Considerable flexibility on corporate governance can be provided for in the partnership agreement.
In principle, a limited partner does not have the right to manage the partnership, but the partnership agreement may provide otherwise.
The unlimited partners (Komplementariusz) must, by law, represent the partnership in relationships with third parties. A limited partner can represent the partnership only by means of a power of attorney. For activities outside the normal scope of the business, the consent of the limited partner is required, unless the partnership agreement provides otherwise.
A limited partner is liable for the partnership's obligations only up to the amount contributed to partnership capital and any amount over and above this stipulated by the partnership agreement (Suma komandytowa).
Considerable flexibility on corporate governance can be provided for in the partnership agreement. All partners are entitled to manage the business, unless this is otherwise stated in the partnership agreement. In the case of activities outside the normal scope of business, the consent of all partners is required.
The management company is subject to supervision by the Polish Financial Supervisory Commission and must obtain authorization to create and operate investment funds in accordance with the Polish Investment Funds Act.
Last modified 13 Mar 2025
These depend on the size of the company, its business activities, the turnover and the number of employees.
This depends on many factors, including the complexity of the structure, the value of the assets, etc.
A valuation of the fund's assets will be carried out by a team of at least three property appraisers, qualified to value real estate in accordance with the legal regulations on real estate management. They are appointed by the management company’s supervisory board.
A valuation of assets must be carried out one month prior to the conclusion of any agreement to acquire the assets, two years after a previous valuation, or at any time when there may have been a significant change in the value of the assets.
A revaluation of assets must also be performed at least once every six months, taking into account changes in market value.
Costs depend on the size and number of properties.
Last modified 13 Mar 2025
Corporate income tax is payable at a flat rate of 19% on net income (small taxpayer under certain threshold of income can qualify for 9% rate). Entities resident in Poland, as a rule, pay corporate income tax in Poland on their worldwide income.
Income can be transferred to shareholders in the form of a dividend. Generally, distributions are subject to a withholding tax of 19% of the gross amount (regardless of whether dividends are paid to a company or to an individual, or whether the recipient is resident or non-resident).
There may be an exemption from withholding tax on dividends where the EU Parent-Subsidiary Directive applies. Generally, a tax-exemption on dividends paid by a Polish resident company applies if all of the following conditions are met:
The taxation of dividends may be modified by a double-tax treaty, in which case a withholding tax of between 5% and 15% normally applies.
Net income from the sale of real estate is subject to income tax (corporate income tax) which is paid by a limited liability company or joint stock company in accordance with the general rules on taxation.
Both types of partnership are treated as transparent for tax purposes so no tax is payable at the level of the partnership. Income is allocated directly to the partners who are taxed individually in accordance with the applicable rate of corporate income tax (for legal entities) or personal income tax (for individuals). For income tax purposes, partners are treated as if they hold the real estate themselves.
Personal income tax rates are progressive. The following rates apply: 12% and 32%. However, partners carrying out business activities may opt for 19% flat rate taxation.
As a rule, non-tax-resident partners pay personal income tax in Poland on the net income earned in connection with real estate located in Poland. Double tax treaties may also apply.
Corporate income tax is payable at the rate of 19% (small taxpayers under certain income thresholds can qualify for a 9% rate). In the case of corporate non-tax resident partners, as a rule, tax is paid in Poland on income earned in the territory of Poland. However, double tax treaties may modify this position.
There is no taxation on distributions: income is simply allocated to the partners who pay income tax in accordance with general tax rules. In the case of cross-border income distribution, double tax treaties may apply.
Net income earned on the sale of real estate is subject to income tax (personal income tax or corporate income tax), which is paid by the partners.
The sale of shares in an entity, the assets of which consist mainly of real estate, may trigger a corporate income tax obligation in Poland for the seller (depending on the relevant double-tax treaty; if there is no tax treaty – such income will be subject to corporate income tax in Poland).
A share in a limited or unlimited partnership may be sold only if the sale is expressly allowed for in the partnership agreement. Income earned on the sale is subject to personal income tax (in the case of an individual) or corporate income tax (in the case of a legal entity subject to corporate income tax). Double-tax treaties may modify this rule.
In addition, the sale will be subject to a 1% tax on civil law transactions (PCC) levied on purchaser.
There is no taxation of income at the level of the fund, unless such income is generated by the partnership and allocated (transferred) to fund (in the form of dividend, portion of its income allocated to the Fund, interest from a loan granted to partnership, etc). Funds, therefore, provide efficient tax planning opportunities for investment in real estate since all income (including that from rent and sale) is exempt from corporate tax.
For individuals: capital gains are taxable at the 19% personal income tax rate.
For corporations: capital gains are taxable at the 19% corporate income tax rate.
Tax planning schemes may reduce the applicable rates of tax.
However, due to a new general anti-avoidance clause, the optimization possibilities may be limited and they require business justification.
Last modified 13 Mar 2025
Does the concept of a 'permanent establishment' apply when a foreign person invests in real estate and, if so, how much does it cost to set up such a permanent establishment, how long does it take and what corporate governance requirements apply?
Conducting a business activity using the real estate located in Poland is considered as having a permanent establishment in Poland. Foreign businesses can set up branch offices or representative offices in order to carry out business activities in Poland.
A branch must be registered in the Register of Businesses (Rejestr Przedsiębiorców), part of the National Court Register, and will take the name of the foreign investor followed by “branch in Poland”. Branch offices may only carry out activities within the scope of the foreign investor’s business. The minister responsible for the economy may prohibit activities by a branch in certain situations specified by law. A branch office does not have its own legal personality and the parent entity is responsible for any liability arising from its activities.
A representative office operates for and on behalf of the foreign business in Poland. It can only engage in promotion or the supply of information and is therefore not suitable for investing in real estate. A representative office must be registered in the Register of Foreign Businesses' Representative Offices (Rejestr Przedstawicielstw Przedsiębiorców Zagranicznych).
No permits are required from the authorities to establish either a branch or a representative office, but in both cases registration and an entry in the appropriate register are obligatory.
The costs of setting up a permanent establishment depend on the size of the entity, its business activities, turnover and the number of employees. It takes from four to six weeks.
There is no requirement to set up any new governing bodies for a branch or representative office: they can be managed directly from abroad. However, a foreign business is obliged to nominate a representative.
Last modified 13 Mar 2025