A Polish entrepreneur with a profitable manufacturing group faces a familiar dilemma. Dividends attract tax at every distribution. Selling a subsidiary triggers capital gains. Passing the business to children creates yet another taxable event. The fundacja rodzinna (family foundation) – introduced under Polish law in May 2023 – addresses all three problems within a single legal structure.

A Polish family foundation is a legal entity that holds family assets, reinvests returns tax-free, and distributes benefits to designated beneficiaries. Under Polish foundation legislation, the foundation pays no corporate income tax on passive income earned within the structure – dividends from subsidiaries, interest, and rental income accumulate without a 19% CIT charge. Tax arises only on distributions to beneficiaries, and even then, first-degree relatives of the founder pay zero personal income tax on those distributions.

This alert covers what the structure offers, who qualifies to use it, and the concrete steps required to set one up. It is addressed to business owners, holding company managers, and foreign investors considering Polish succession planning.

What tax advantages does a Polish family foundation provide?

The core benefit is tax deferral at the entity level. Income earned inside the foundation – from shares, real estate, loans to subsidiaries, or intellectual property – is not taxed as it accumulates. The 15% CIT charge applies only when the foundation makes a distribution. For a founder whose children are beneficiaries, that distribution is then exempt from personal income tax entirely, producing an effective rate close to zero on intergenerational wealth transfers.

The contrast with a standard holding structure is significant. A Polish limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o.) distributing dividends to an individual shareholder triggers 19% withholding tax immediately. A family foundation holding the same shares defers that charge indefinitely – or eliminates it when distributions flow to qualifying family members. For a group generating PLN 5m annually in passive income, the compounding effect over ten years is material.

Two additional advantages deserve attention. First, the foundation can hold shares in operating companies and receive dividends from them without triggering CIT, provided those companies are Polish or EU-resident entities. Second, assets contributed to the foundation at setup are not treated as a taxable sale – the transfer is exempt from both CIT and civil law transaction tax (podatek od czynności cywilnoprawnych, PCC). This makes the initial endowment structurally efficient.

  • Zero CIT on passive income reinvested within the foundation
  • 15% CIT on distributions, offset to zero for qualifying family beneficiaries
  • No PCC on asset contributions at foundation setup
  • Exemption from personal income tax for first-degree relatives receiving distributions

We secured a tax-efficient restructuring for a manufacturing client in the Mazowieckie region (autumn 2025), consolidating three operating entities under a newly formed family foundation and eliminating the annual dividend tax charge on passive income exceeding PLN 3m.

Who is affected and what are the setup requirements?

Any Polish tax resident who is a natural person may act as founder. The minimum endowment is PLN 100,000 – a threshold set by the foundation statute and verified by the National Court Register (Krajowy Rejestr Sądowy, KRS) at registration. There is no upper limit on assets contributed. Foreign nationals resident in Poland for tax purposes may also establish a foundation, though cross-border structuring requires careful review of transfer pricing rules and the controlled foreign company (CFC) provisions that interact with the foundation regime.

The foundation must be established by notarial deed before a Polish notary. The founding document (statut) defines the beneficiaries, the distribution policy, and the supervisory board if one is required. A supervisory board becomes mandatory when the number of beneficiaries exceeds 25. Registration with the KRS takes approximately four to six weeks from the date of the notarial deed. The registration fee is PLN 500.

Ongoing compliance obligations are modest but real. The foundation must file an annual CIT return with the National Revenue Administration (Krajowa Administracja Skarbowa, KAS), maintain separate accounting records, and report any distributions to the KAS within the standard tax-year cycle. Foundations with assets exceeding PLN 25m are subject to an additional annual audit requirement. For business owners already familiar with KSeF obligations in cross-border contexts, the compliance layer here is comparatively light.

Foreign investors should note one specific risk. If the founder is a non-Polish tax resident, the foundation may be treated as a CFC in the founder's home jurisdiction, generating taxable income there regardless of distributions. This is a structuring question that must be resolved before the notarial deed is signed – not after. Our team obtained interim structuring advice for a German investor's family office in Lower Silesia (spring 2026), identifying a CFC exposure that would have triggered German tax liability on undistributed foundation income.

What action should owners take now?

The family foundation regime has been in force since May 2023, but the KAS has issued clarifying guidance on several contested points only in late 2024 and early 2025. That guidance affects how mixed-use assets – real estate used partly for business and partly for family purposes – are treated inside the foundation. Owners who contributed such assets before the guidance was published should review their position within 30 days of reading this alert.

Three immediate steps apply to any owner considering the structure. First, map all passive income streams currently taxed at the holding-company level. Second, assess whether existing shareholders' agreements or pledge arrangements over shares would survive a transfer to the foundation without triggering change-of-control clauses. Third, confirm the tax residence of the intended founder before instructing a notary. For context on how Polish digital reporting obligations interact with cross-border structures, see our analysis of KSeF implications for Swedish-market operations and our overview of ESRS implementation steps for Polish reporting entities.

What to prepare before instructing a notary:

  • List of assets to be contributed, with valuations and title documents
  • Confirmation of founder's Polish tax residence status
  • Draft beneficiary list with relationship to founder specified
  • Review of any pledge, mortgage, or shareholders' agreement over contributed assets
  • Transfer pricing analysis if the foundation will hold shares in foreign subsidiaries

Delay carries a specific cost. Every year the structure is not in place, passive income earned at the holding level is taxed at 19% CIT before it can be reinvested. On PLN 2m of annual passive income, that is PLN 380,000 in avoidable tax per year. The setup cost – notary fees, KRS registration, and legal advisory – is a fraction of that figure.

Your specific situation determines whether the family foundation is the right instrument or whether an alternative – such as an IP Box structure or a holding company under the participation exemption – produces a better outcome. Each path has different conditions and timelines. Acting without a full picture forfeits options that cannot be recovered retroactively.

To receive an expert assessment of your family foundation setup options, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a family foundation hold shares in a Polish operating company and receive dividends tax-free?

A: Yes. Under Polish foundation legislation, dividends received from Polish and EU-resident companies are treated as passive income accumulated within the foundation and are not subject to CIT at the point of receipt. The 15% CIT charge applies only when the foundation distributes funds to beneficiaries. First-degree relatives of the founder receiving those distributions owe no personal income tax on them.

Q: How long does it take to set up a family foundation in Poland, and what does it cost?

A: The process runs approximately six to eight weeks from the initial notarial deed to KRS registration. The statutory registration fee is PLN 500. Notary fees depend on the value of assets contributed. Legal advisory costs vary by complexity, but most straightforward setups are completed within that window. Founders should allow additional time if contributed assets include real estate requiring separate title verification.

Q: Does a family foundation eliminate all Polish tax on wealth transfers to children?

A: Not entirely, but it reduces the effective rate substantially. Distributions to first-degree relatives – children, parents, and spouses – are exempt from personal income tax. The foundation itself pays 15% CIT on distributions. However, for a founder whose children are the primary beneficiaries, the combined effective rate on intergenerational transfers is significantly lower than the standard dividend route, which triggers 19% withholding tax at the company level before any inheritance considerations arise.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to tax structuring, family foundation setup, and succession planning. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.