POLAND Law and Practice Contributed by: Michał Wielhorski, Mateusz Prokopiuk, Małgorzata Wąsowska and Klaudia Michalec, act legal Poland
3.2 Typical Security Created by Commercial Investors Security instruments may include the following mechanisms: • mortgage on real estate; • pledge on shares or stock in a company; • security in the form of assignment of rights to lease/insurance agreements; • security on income from real estate directed 3.3 Restrictions on Granting Security Over Real Estate to Foreign Lenders In Poland, there are no specific restrictions relat - ed to the establishment of security interests over real estate in favour of foreign creditors. How - ever, it should be noted that the enforcement of security interests – if it involves the acquisition of real estate by a foreigner – may be subject to restrictions on the acquisition of real estate by foreigners. 3.4 Taxes or Fees Relating to the Granting and Enforcement of Security The establishment of a mortgage is subject to TCLT. The tax obligation arises at the moment of submitting a statement on the establishment of a mortgage or upon conclusion of a mort - gage agreement. The tax base is the amount of the secured receivable, and a 0.1% TCLT rate applies to receivables of a determined amount. In the case of receivables of an undetermined amount, the tax is PLN19. to a special escrow account; • sureties and guarantees; and • escrow. The taxpayer is the person submitting the dec - laration of intent to establish the mortgage. In addition, court fees are charged for entering the mortgage into the land and mortgage register,
minister responsible for internal affairs. This is regulated by the Act of 1920 on the Acquisition of Real Estate by Foreigners. The most important exception is that there is no requirement to obtain a permit for foreigners who are citizens of or entrepreneurs from the Swiss Confederation or countries that are parties to the Agreement on the European Economic Area. Other exceptions apply – for example, to the purchase of residential premises or to for - eigners who are spouses of Polish citizens. Acquisition of real estate by a foreigner without obtaining a permit is invalid. The acquisition of real estate that does not gen - erate income at the time of acquisition is gener - ally possible from the buyer’s own funds or from non-bank sources (eg, funds obtained through the issue of bonds on the debt market). At the next stage, after demonstrating a sufficient level of own contribution and loan-to-value (LTV) ratio, it is possible to obtain a construction loan and then – after completion of construction – con - vert the construction loan into a more favourable investment loan (long-term). The acquisition of real estate that generates income at the time of purchase is generally possible with the use of a bank loan (acquisi - tion loan). 3. Real Estate Finance 3.1 Financing Acquisitions of Commercial Real Estate Alternative sources of financing are funds obtained on the debt market (loans, bonds) or funds obtained through a joint venture partner - ship.
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