Planning and organizing an direct investment is a complex process encompassing a broad set of activities, including:
The decision of location affects approximately 80% of the investment and follow-up costs (including development costs, transport costs, wages, taxes and energy). The initial selection between greenfield and brownfield defines the basic scope of possibilities of choice between the location advantages.
Below is a short extract outlining the main location factors essential to consider during the investment process.
- greenfield vs. brownfield (in case of industrial/logistics projects);
- technical specification and merits of a building (in case of brownfield and service projects);
- the investment within or outside the Special Economic Zone;
- the distance, quality and time of logistics to the main customers and other key hubs;
- labour costs, availability and the quality of desired blue-collar and white-collar workers;
- infrastructure and development costs (all media, roads, access and extension possibilities);
- the availability of required components, suppliers or services;
- the appropriate local authority contact.
Proceedings related to the planning and construction process are defined within a set of legal regulations, of which the most important acts are:
- Zoning Law – Ustawa o planowaniu i zagospodarowaniu przestrzennym;
- Act on Environmental Protection – Ustawa o ochronie środowiska;
- Construction Law – Prawo budowlane;
The responsibilities related to the planning and building process are divided between several authorities with the most important being:
- Commune (Gmina) – responsible for zoning, property division and environmental impact decisions.
- County (Starosta) – responsible for issuing building permits and supervising county building inspectors who issue permits.
Additional authorities that are involved in the permission process and reconciliation of design and decisions are based locally or regionally.
The majority of activities related to planning, designing and obtaining a building permit may entrusted by contract to an architect’s/design office, that on the basis of a power of attorney will conduct the entire design and permission process and obtain a building permit.
The most important act of law (including local laws) during the processes of planning and designing the investment is a local spatial management plan, which determines purpose and zoning approval for the area. Local spatial management plans determine purpose of a given land and affect the designing process of the investment
Not all real estates in Poland are subject to local spatial management plans. In such a case, to execute the investment, the Investor has to apply for a planning permission to the urban or municipal authority. If there is no local spatial management plan, the Investor should take into account a possibility of protracting the investment with a time required for obtaining of decision on land development conditions.
- Ahead of applying for a building permit an investor is obliged to conduct an environmental impact assessment (EIA) for the planned investment.
- The aim of the process is to define related environmental risks at the early stage of investment planning, construction and operations and minimize any negative impact.
- The process of EIA ends with obtaining an environmental impact decision (EID).
- A building permit is required in the case of construction, reconstruction, demolition, or changing a way in which a building object is to be used. It is granted when a submitted construction project is compatible with a local spatial management plan, the building code and other applicable regulations.
- An application for a building permit shall be submitted for the most part of the investment in the appropriate Poviat Starosty.
- A building permit is valid for 3 years from the day it has been issued and validated.
Real estate is defined in Polish law as land, buildings on land, and apartments. Real estate can be acquired for investment purposes in the following forms:
- perpetual usufruct (an unique feature of Polish legal system – see below);
- other rights, such as servitudes, lease or usage;
Ownership is a basic right with respect to real estate and enable an owner to fully use the property. It is legally protected against any third parties’ actions detrimental to the interests of the owner. The ownership is not limited in time. Perpetual usufruct is established for both state and municipality owned land. The perpetual usufructuary has the right to use the land in the same range as the owner, and the purpose of use of the land is defined in an agreement for the purchase of the right of perpetual usufruct.
Ownership is a basic right with respect to real estate and enable an owner to fully use the property. It is legally protected against any third parties’ actions detrimental to the interests of the owner. The ownership is not limited in time.
Perpetual usufruct is established for both state and municipality owned land. The perpetual usufructuary has the right to use the land in the same range as the owner, and the purpose of use of the land is defined in an agreement for the purchase of the right of perpetual usufruct.
Acquisition of real estate by foreigners
When on 1 May 2004 Poland became a member state of the European Union and consequently joined the European Economic Area, the real estate purchasing procedure was altered to be more attractive to foreigners interested in investing in Poland.
Be that as it may, certain binding regulations of Polish Law defined by the Act from 24 March 1920 about the Acquisition of Real Estate by Foreigners (further referred to as the AARE), still states that foreigners with a seat registered outside the European Economic Area EEA intending to purchase real estate in Poland must obtain a permit from the Minister of Interior Affairs.
When foreign companies and nationals are registered inside the EEA (or establish a sister company registered in the EEA) they are exempted from obtaining an acquisition permit. These entities do not require any permit for the acquisition of shares/stocks or real estate, except for agricultural land and forestry, where a permit is required.
According to the Polish law, execution of the investment may be launched after obtaining a building permit or reporting the construction to the relevant authority.
The most important obligations of the Investor during the execution of the investments are as follows:
- conclusion of the construction works agreement with the contractor;
- providing the contractor with an access to the construction area;
- assuring designer and investor’s supervision over the execution;
- execution of the investment according to the construction Project;
- supervising the investment as regards time, budget and quality;
- optimising and Effective management of the investment schedule;
- minimising additional works;
- partial acceptance of works to be covered;
- supervision and verification of the approval certificates of the materials used and construction products.
The last stage of the investment is obtaining an occupancy permit, which, according to the Polish law, is necessary to use the building. The occupancy permit is issued by the District Building Supervision Inspector, when requested by the Investor.
Moreover, it is crucial to finalise the investment with the Contractor, i.e.
- proper finalisation of the works regarding listing and settling all faults and defects;
- conducting all necessary check-ups, start-ups, measurements and tests;
- completing as-built documentation with all necessary commissioning documents and trainings;
- proper notifying faults and defects during a warranty period.
Termination of the warranty period and settling the deposit and warranty with the contractor.
How we can assist you:
- Architects / Design offices– The Invest in Wrocław team is ready to connect you to local architects and design offices and construction companies, contact us for additional details.
- Contacting relevant authorities– Please contact us if you require contact data to relevant authorities for your building and planning process.
- Procedures facilitation and assistance– The Invest in Wrocław team is ready to help you with obtaining all permits and decisions, please contact us for assistance.