The Problems of Purchasing of Real Estates by Foreignes

Abstract

The Act of 24 March 1920 on purchasing of real estates by foreigners (Dz.U. of 1996, nr 54, item 245 with later changes) is one of those legal acts in the Polish legal system that have been binding for the longest time; it does not differ much from the standards of the European Union, the more so because to adjust the law to the legal regulations that are in force in the UE several amendments were added that liberalize the trade in real estates in which foreigners participate. The act still fulfills its basic aim, that is it controls the trade in real estates on the territory of the Polish Republic. The control is exercised by the Minister of Internal Affairs and Administration because of security and necessity to protect the fundamental political and economic interests.

The content of Art. 1 item 1 and Art. 3e item 1 of the act on purchasing of real estates by foreigners allows differentiation of Minister of IAA's licences into: purchasing of a real estate (licence to indirectly purchase a real estate, i.e. to purchase it in the legal sense) and purchasing or taking possession of shares or stocks (licence to directly purchase a real estate, i.e. to purchase it in the economic sense). Differentiation of these licences seems to be important in the context of the questions connected with establishing a limited liability company and purchasing of real estates in the form of apport by it, and taking possession of shares in it by the partners, especially by foreigners. Because of the fact that the partnership contract of the limited liability company causes by principle purchasing by the company of the real estate contributed as apport, it should be stated that according to the regulations in the Act on purchasing of real estates by foreigners, in the process of establishing a limited liability company it seems necessary for the company that is to be controlled by a foreigner, to obtain a licence to purchase the real estate (according to Art.1 item 1 of the cited Act), as well as – according to some representatives of the doctrine – to obtain a licence to take possession of the shares in the company by the foreigner (in accordance with Art. 3e item 1 of the cited Act).

In the article the authors propose the thesis that the process of contributing a real estate to cover the opening capital in the company being established only requires a licence to purchase the real estate. The aim of the article is to show that from the regulation in Art. 3e of the Act on purchasing of real estates by foreigners, limitations cannot follow that are connected with granting licences to take possession of shares by a foreigner or foreigners at the stage of establishing a limited liability company, when a real estate is contributed as apport.