POLAND Law and Practice Contributed by: Michał Wielhorski, Mateusz Prokopiuk, Małgorzata Wąsowska and Klaudia Michalec, act legal Poland
Family foundations, which have been allowed by the Polish legal system since 2023, are becom - ing increasingly popular. 5.2 Main Features and Tax Implications of the Constitution of Each Type of Entity There are no special requirements applicable to the constitution of companies based on the fact that the company will be used to invest in real estate. However, Polish law imposes special requirements applicable to constitution based on individual types of companies – ie, not bind - ing the requirements’ fulfilment to the type of business the company will conduct but, rather, to the type of the company. By way of exam - ple, some requirements concerning capital, the number of partners, and the legal form of the articles of association apply to limited liability companies and joint stock companies, whereas different requirements apply to partnerships. Investments are most often made through capi - tal companies, which offer limited liability and allow for deductions such as depreciation and property-related costs. In capital companies, profits are generally subject to double taxa - tion – at the company level and at the level of the shareholder. However, in the case of limited partnerships, double taxation can be neutralised through exemptions and reductions. An attractive option is the Estonian CIT, which defers taxation (including on real estate sale profits) until the distribution of profits. This solu - tion is available subject to certain ownership or employment-related criteria. The family foundation – albeit not intended for regular real estate transactions – can serve as a succession planning tool, offering tax benefits in the case of real estate disposal, particularly
regarding the deferral or reduction of tax liabili - ties. 5.3 REITs The Polish legal system does not yet have sep - arate, comprehensive regulations dedicated to classic REITs – although the topic has been appearing in legislative and industry discussions for years. Nevertheless, there are funds invest - ing in real estate on the market – mainly in the form of FIZs. 5.4 Minimum Capital Requirement The minimum capital required to establish a real estate investment entity in Poland depends on the legal form in which such an entity operates, as follows: • limited liability company – minimum share capital of PLN5,000; • joint-stock company – minimum share capital of PLN100,000; • a simple joint stock company – minimum share capital of PLN1; and • limited joint-stock partnership – minimum share capital of PLN 50,000. 5.5 Applicable Governance Requirements The corporate governance requirements for enti - ties used to invest in real estate in Poland depend on the legal form of the entity. By way of exam - ple, in the case of a limited liability company, the governance rules are relatively straightforward – operational decisions are made by the man - agement board and the general meeting. Each capital company is required to file annual finan - cial statements and report its beneficial owners to the Central Register of Beneficial Owners, in accordance with the Polish Anti-Money Laun - dering and Countering the Financing of Terror - ism Act.
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