The acquisition of shares/stocks in a Polish company by a foreigner isn’t straightforward. Indeed, the Polish legislator has introduced a requirement for a foreign national to obtain a permit to acquire shares/stocks. In this article, we will try to explain the procedure for a foreigner to obtain the authorisation in question.
1. Foreigner
The Act of 24 March 1990 on the acquisition of real estate by foreigners (i.e. Official Journal of 2017, item 2278, as amended), hereinafter referred to as the Act, defines the term ″foreigner″ very broadly. According to Article 1(2) of the Act, a foreigner is:
- a natural person who doesn’t have Polish citizenship;
- a legal person with the head office abroad;
- a company of persons listed in points 1 or 2 without legal personality, having its head office abroad and created in accordance with the legislation of foreign countries;
- a legal person and a commercial company without legal personality, having its head office in Poland and controlled directly or indirectly by persons or companies listed in points 1, 2 and 3.
It should be noted here that the Act requires that a company in which a foreigner or foreigners hold, directly or indirectly, more than 50% of the votes at the shareholders’ meeting or at the general meeting, also as a pledgee, usufructuary or on the basis of agreements with other persons, either in which foreigners have a dominant position within the meaning of the provisions of the Commercial Companies Code, be deemed to be a controlled company (Article 1(3) of the Act).
2. When consent to acquire shares should by applied for?
A foreigner is obliged to apply for a permit in the case of:
- the acquisition or takeover of shares in a commercial company with its head office in the Republic of Poland, as well as other legal actions concerning shares, if, as a result of them, the company being the owner or perpetual usufructuary of real estate in the territory of the Republic of Poland becomes a controlled company (Article 3e(1) of the Act);
- the acquisition or takeover of shares or stocks in a commercial company with its head office in the Republic of Poland, being the owner or perpetual usufructuary of real estate in Poland, if this company is a controlled one, and the shares are acquired or taken up by a foreigner who isn’t a shareholder or stockholder of the company (Article 3e(2) of the Act).
The above restrictions doesn’t apply in the event that the company’s shares are admitted to trading on a regulated market or the company is an owner or perpetual usufructuary:
- of an independent residential premises within the meaning of the Act of 24 June 1994 on ownership of apartments (i.e. OJ 2021, item 1048, as amended);
- of an independent business premises with a garage use or a share in such premises, if this is related to meeting the housing needs of the purchaser or owner of the real estate or independent residential premises;
- undeveloped real estate, the total area of which in the entire country doesn’t exceed 0.4 ha within urban area, acquired for statuory purposes.
The exemptions described don’t apply if the above-mentioned properties are located in the frontier zone or constitute agricultural land with an area exceeding 1 ha (Article 3e(3) of the Act).
A foreigner who is a citizen or entrepreneur of States parties to the Agreement on the European Economic Area or the Swiss Confederation doesn’t have to obtain a permit (Article 8(2) of the Act).
3. Conditions for issuing a permit
A permit will be issued in the event that:
- the acquisition of real estate by the foreigner won’t cause a threat to the defence, State security or public order, as well as social policy and public health considerations don’t oppose it;
- the foreign national indicates circumstances confirming his/her ties with the Republic of Poland (Article 1a(1) of the Act).
According to the legislator, circumstances confirming the foreigner’s ties with the Republic of Poland are the following:
- having Polish nationality or Polish origin;
- entering into a marriage with a Polish citizen,
- having a residence permit:
- a temporary one with the exclusion of a temporary residence permit for victims of trafficking in human being and a temporary residence permit due to circumstances requiring a short stay of the foreigner in the Republic of Poland, or
- a permanent one, either
- of a long-term resident in the EU;
- the membership of the management body of controlled entrepreneurs,
- exercising an economic or agricultural activity in the Republic of Poland, in accordance with the provisions of Polish law (Article 1a(3) of the Act).
4. Application
The permit is issued at the request of the person concerned, by the Minister responsible for internal affairs.
The content of the application is specified by the Act and the Regulation of the Minister of Internal Affairs of 20 June 2012 on detailed information and types of documents to be presented by a foreigner applying for a permit to acquire real estate (OJ 2012, item 729), hereinafter referred to as the Regulation. The request should indicate, among others,:
- the foreigner applying for the permit;
- the company whose shares are to be acquired, taken up or otherwise legally dealt with for the benefit of the foreigner;
- companies with the head office in Poland, subsidiaries of the company to which the transaction relates, being owners or perpetual usufructuaries of real estate in the Republic of Poland, which will become foreigners within the meaning of the Act as a result of acquisition, taking up or any other legal action for the benefit of a foreigner, concerning shares in the company to which the transaction relates;
- real estate owned or held in perpetual usufruct by the company to which the transaction relates, as well as real estate owned or held in perpetual usufruct by its subsidiares which will become controlled by a foreigner or foreigners as a result of any of these actions;
- the transferor;
- determination of the manner of acquiring or taking up shares or stocks, either any other legal action concerning shares or stocks in the company, as a result of which a commercial company with its head office in the Republic of Poland, being the owner or perpetual usufructuary of real estate in Poland, will become a controlled company (§ 6 of the Regulation, Article 1a(3) of the Act).
The application shall be accompanied by documents confirming the circumstances indicated in the request and the foreigner’s ties with Poland, as well as other documents making it possible to establish the correctness of acquisition of the real estate, in particular:
- documents specifying the foreigner’s legal status;
- documents confirming the foreigner’s ties with the Republic of Poland;
- documents confirming the legal status of the company whose shares or stocks the application concerns;
- documents indicating the legal status of the transferor of the shares or stocks;
- documents specyfing the real estate owned or held in perpetual usufruct by the company concerned by the request and its subsidiaries, which, as a result of any of these actions, will become controlled by a foreigner or foreigners;
- declaration of the seller of the shares or stocks, expressing the will to dispose of them to the acquirer (§ 7 of the Regulation, Article 1a(4) of the Act).
A stamp duty of PLN 1,570.00 must be paid on the application for the permit. Proof of payment of stamp duty on the request is attached to the application.
The applicant may act through a proxy. In such a case, the request must be accompanied by a power of attorney and proof of payment of stamp duty on the power of attorney in the amount of PLN 17.00.
5. Examination of the application
The Minister responsible for internal affairs carries out a formal analysis of the application. Before issuing a decision on the case, he may require the presentation of evidence and information necessary for the examination of the request. He may also verify, with the assisance of the appropriate government administration bodies, whether the acquisition of real estate by a foreigner won’t cause a threat to defence, State security or public order, and whether it will be in the interest of the State (Article 2(1) of the Act). The Minister also has the right to request public administration bodies, professional organisations and State institutions to express their opinions, as well as to provide documents and information, in particular those contained in the land and building register (Article 2a of the Act).
The Minister responsible for internal affairs address a request to the Minister in charge of national defence and, in the case of agricultural real estate, also to the Minister in charge of rural development. They may lodge an objection within 14 days of the delivery of the application. In particularly justified cases, the minister responsible for internal affairs, at the request of the body entitled to object, has the right to extend the deadline for filing an objection to 2 months from the date of delivery of the application (Article 1(1, 2) of the Act).
In the event that the Minister of Administration refuses to issue a permit, there is no need to submit a request to the Minister in charge of national defence or the Minister in charge of rural development (Article 1(1b) of the Act).
6. Permit
The permit takes the form of an administrative decision. It should specify in particular:
- the person of the acquirer and the transferor;
- the subject of the acquisition;
- the special conditions on the fulfilment of which the possibility of the acquisition of real estate will depend (Article 3(1) of the Act).
The permit is valid for a period of 2 years from the date of its issue (Article 3(2) of the Act).
A decision refusing to issue a permit is made in the case of:
- failure to fulfil statutory requirements,
- a negative opinion of the corresponding authorities.
There is no right to appeal against a decision on a permit for the acquisition of shares/stocks by a foreigner issued at first instance by the Minister responsible for internal affairs. A party dissatisfied with the decision may request the Minister to reconsider the case. The provisions concerning appeals against decisions shall apply accordingly to the request in question.
7. Legal notice
The study is a work within the meaning of the Act of 4 February 1994 on Copyright and Related Rights (OJ 2006, No. 90, item 631, consolidated text, as amended). Publishing or reproducing this study or its part, quoting opinions, as well as disseminating in any other way the information contained therein without the written consent of Crede sp. z o.o. is prohibited.
