A Polish entrepreneur who has spent three decades building a manufacturing group now faces a pressing question: how to transfer ownership to the next generation without triggering a tax bill that consumes a third of the company's value. The fundacja rodzinna (family foundation, FR) – introduced into Polish law in May 2023 – was designed precisely for this situation. It allows business owners to consolidate assets, defer taxation, and distribute wealth to beneficiaries on terms that no other Polish vehicle currently matches.
The Polish family foundation is a separate legal entity that holds assets contributed by a founder, accumulates returns tax-free, and pays a flat 15% CIT only when distributions are made to beneficiaries. Contributions of shares, real estate, or cash to the foundation are exempt from income tax at the point of transfer. The foundation is registered with the District Court in Warsaw – the sole competent court under Polish foundation legislation – and must maintain a founding fund of at least PLN 100,000.
This alert covers three areas: what the family foundation regime offers in tax terms, who stands to benefit most, and the concrete steps required to establish one. Founders who delay risk missing the compounding effect of tax-free accumulation – a lost opportunity that grows larger with every year of inaction.
What tax advantages does the Polish family foundation offer?
The family foundation's core appeal is a two-stage tax structure. Assets grow inside the foundation free of CIT. Tax is deferred until the moment of distribution – and even then, the rate is a flat 15% on the value paid out to beneficiaries. For a founder's immediate family (spouse, children, parents), distributions are additionally exempt from inheritance and gift tax, provided the beneficiary is listed in the foundation's statute.
Three advantages stand out against alternative structures. First, dividends received by the foundation from Polish companies in which it holds shares are exempt from withholding tax, provided the foundation meets the shareholding conditions set out in Polish corporate tax legislation. Second, income from the sale of shares, real estate, or financial instruments held by the foundation is not taxed at the point of sale – only when proceeds are distributed. Third, the foundation may hold intellectual property and collect royalties without triggering IP Box complications at the entity level (though individual beneficiaries may still have exposure, making advice from a tax advisor Warsaw-based practice worthwhile).
One figure concentrates the mind: a business owner who contributes shares worth PLN 10m to a family foundation, receives dividends inside the foundation for ten years, and then distributes accumulated capital pays 15% on distributions rather than the 19% flat tax or progressive rates that would apply outside the structure. The difference compounds significantly over time. We secured a tax-efficient restructuring for a manufacturing client in the Mazowieckie region (autumn 2025), transferring assets exceeding PLN 8m into a family foundation with no immediate tax cost at the contribution stage.
- CIT rate on distributions to beneficiaries: 15%
- CIT on asset growth inside the foundation: 0%
- Minimum founding fund: PLN 100,000
- Inheritance and gift tax for immediate family beneficiaries: exempt
- Sole registration court: District Court in Warsaw
Founders should note one boundary condition. The foundation may not conduct operating business activity directly. It can hold shares in operating companies and receive passive income, but direct trading activity triggers a punitive 25% CIT rate rather than the standard 15%. Structuring the boundary between the foundation and its operating subsidiaries is therefore a critical design decision – one where Polish tax law leaves little room for error.
Who should act now – and what are the setup steps?
The family foundation is most valuable for three categories of owner. The first is a founder aged 50 or above who is planning succession within a ten-year horizon. The second is any owner whose business generates significant passive income – dividends, rents, royalties – that currently flows directly into personal tax returns. The third is a foreign investor holding Polish assets through a Dutch or other EU holding structure; here, the interaction with the double tax treaty between Poland and the Netherlands deserves careful analysis before choosing between a foundation and a holding company.
Setup follows a defined sequence. The founder executes a notarial deed – the foundation statute – before a Polish notary. The statute must specify beneficiaries, distribution rules, the supervisory board composition, and the founding fund amount. The foundation is then registered with the District Court in Warsaw, which maintains the dedicated foundation register. Registration typically takes four to eight weeks from the date of filing. Once registered, the founder transfers assets to the foundation; this transfer is exempt from income tax but must be documented with a valuation report if non-cash assets are contributed.
Our team assisted a technology group in Lower Silesia (spring 2026) in establishing a family foundation to consolidate IP assets and three operating subsidiaries. The process – from initial statute drafting to registration confirmation – was completed in six weeks. The structure also addressed transfer pricing exposure between the foundation and its subsidiaries, since related-party rules under Polish corporate tax legislation apply to transactions between a foundation and companies it controls.
Two procedural points deserve attention. First, the foundation must file annual CIT returns with the Polish tax authority, even in years when no distributions are made. Second, if the founder or a beneficiary is a non-resident, the interaction with cross-border tax compliance obligations – including any mandatory e-invoicing requirements in the beneficiary's home jurisdiction – should be reviewed in parallel. Overlooking this step can create unexpected withholding tax exposure in the beneficiary's country of residence.
Owners who have already considered restructuring through simplified arrangement proceedings should note that a family foundation is not a rescue tool for distressed businesses. It is a planning instrument for solvent companies with stable cash flows. For businesses facing liquidity pressure, the simplified arrangement proceedings remain the faster path to creditor protection.
The window for tax-free contribution is open now. Each year of delay means another year of passive income taxed at personal rates rather than accumulating inside a 0% CIT environment. Founders who have not yet assessed whether the family foundation threshold – PLN 100,000 founding fund, notarial statute, District Court registration – fits their asset profile are forfeiting a compounding advantage that cannot be recovered retrospectively.
To receive an expert assessment of whether a Polish family foundation fits your ownership structure, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can a non-Polish resident establish a family foundation in Poland?
A: Yes. Polish foundation legislation does not restrict founders by nationality or residence. A non-resident founder must, however, execute the founding statute before a Polish notary or have the deed apostilled and translated. The foundation itself is a Polish tax resident and files CIT returns with the Polish tax authority regardless of the founder's domicile.
Q: How long does the registration process take, and what does it cost?
A: Registration with the District Court in Warsaw typically takes four to eight weeks from the date of a complete filing. Notarial fees depend on the value of the founding fund; for a PLN 100,000 fund, notarial costs are modest. Court registration fees are fixed by statute. Legal advisory fees vary by complexity, particularly where asset valuation reports or transfer pricing documentation are required.
Q: Is the 15% CIT rate on distributions a final tax, or does the beneficiary owe additional personal income tax?
A: For beneficiaries who are members of the founder's immediate family (first and second degree of kinship), distributions are exempt from personal income tax and inheritance and gift tax. The 15% CIT paid by the foundation is the final tax cost at the distribution stage. Beneficiaries outside the immediate family circle face an additional surcharge under Polish income tax legislation, making the definition of the beneficiary group in the founding statute a decision with direct financial consequences.
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 family foundation structuring, succession planning, and tax advisory. 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.