A Warsaw-based entrepreneur holds shares in three operating companies, a portfolio of rental properties, and a stake in a private equity fund. Each asset sits in a different legal wrapper. Succession planning is fragmented, and every dividend distribution triggers a separate tax event. The Polish family foundation, introduced in May 2023, was designed precisely for this situation – and many owners have not yet acted.

The Polish family foundation (fundacja rodzinna) is a separate legal entity that holds and manages family wealth free of corporate income tax on most investment returns, deferring taxation until assets are distributed to beneficiaries. Established under the Family Foundation Act of 2023 and registered with the National Court Register (KRS), it allows a founder to consolidate assets, define succession rules, and protect wealth across generations. The minimum initial asset contribution is PLN 100,000.

This alert covers three things: what the family foundation regime offers, who it affects and at what thresholds, and the immediate steps owners should take before the end of 2026. The complexity of the setup – involving the KRS, the National Tax Administration (KAS), and often the Polish Financial Supervision Authority (KNF) for regulated assets – makes early preparation essential.

What tax advantages does a Polish family foundation offer?

The core benefit is tax deferral. A family foundation pays no corporate income tax (CIT) on passive income – dividends received from Polish subsidiaries, interest, rental income, and capital gains from asset disposals. Tax arises only on distributions to beneficiaries, and the rate depends on the beneficiary's relationship to the founder. This structure turns a recurring annual tax burden into a deferred, controllable event.

Distributions to the founder and first-degree relatives (spouse, children, parents) are taxed at 15% CIT at the foundation level, with no additional personal income tax (PIT) for the beneficiary. Distributions to more distant relatives attract 15% CIT plus a 10% PIT surcharge. Distributions to unrelated persons are taxed at 25% CIT. The gap between the standard 19% flat tax on dividends and the 15% rate for close family is meaningful over a multi-decade holding period.

The foundation also benefits from an exemption on income from qualifying activities. These include:

  • Holding and selling shares in companies
  • Leasing real estate owned by the foundation
  • Collecting interest and royalties
  • Participating in investment funds

One structural risk deserves attention. If the foundation conducts operating business activity beyond the permitted list, a punitive 25% CIT rate applies to that income. Founders who transfer an active trading business – rather than passive holding assets – into the foundation without restructuring first will trigger this penalty rate. That is an irreversible tax cost if the error is not caught before the transfer.

Who is affected and what are the key thresholds?

The family foundation is not a universal tool. It suits owners with concentrated, high-value asset portfolios who face a succession event within a 5–10 year horizon. The minimum founding contribution of PLN 100,000 is a statutory floor, not a practical target. In our experience, the structure becomes economically rational when total assets under consolidation exceed PLN 2–3 million, given setup and ongoing compliance costs.

We secured a restructuring outcome protecting assets worth over PLN 4m for a manufacturing client in the Mazowieckie region (autumn 2025). The foundation absorbed three holding entities and two real estate assets in a single registration cycle, reducing the annual tax drag on passive income by approximately 19 percentage points.

Foreign investors should note a specific complication. A Polish family foundation holding shares in a foreign subsidiary may trigger controlled foreign corporation (CFC) rules under Polish tax law. The KAS has signalled active scrutiny of foundations used to hold low-taxed foreign entities. Transfer pricing documentation obligations also apply where the foundation transacts with related parties – a point often missed at setup. For clients with cross-border structures, the interaction between the family foundation and Poland's double tax treaty network requires careful mapping before any asset transfer.

Owners operating in the digital economy face an additional layer. Where the foundation holds IP assets eligible for the IP Box regime, the interaction between IP Box relief and the foundation's CIT exemption is not straightforward. The KAS has not issued a general ruling on this point, and individual tax rulings (interpretacje indywidualne) take up to three months to obtain. Acting now avoids a gap in protection. Similarly, businesses onboarding to KSeF Poland should map invoicing flows that will pass through the foundation structure before the mandatory KSeF deadline.

What immediate steps should founders take before year-end 2026?

Three actions are time-sensitive. First, asset mapping: identify which assets qualify for the CIT exemption and which would attract the 25% punitive rate. This requires a legal and tax audit of each asset category. Second, obtain an individual tax ruling if the structure involves IP Box assets, foreign subsidiaries, or real estate development agreements – the three-month processing window means applications filed after September 2026 will not return results before year-end. Third, prepare the founding deed (akt założycielski) and register with the KRS. Registration currently takes four to eight weeks.

We obtained a favourable individual tax ruling for a technology client in Lower Silesia (spring 2026), confirming that royalty income received by the family foundation from a domestic licensee qualified for the CIT exemption. The ruling took eleven weeks. Had the client delayed the application, the foundation would have operated for one full fiscal quarter without confirmed tax status.

Owners who hold real estate through development structures should review the interaction between the family foundation and Polish development agreements before transferring any property under active development. Transferring a property mid-development can crystallise VAT and PIT obligations that a post-completion transfer would avoid.

What to prepare before the first legal consultation:

  • A schedule of all assets to be contributed, with estimated market values
  • Corporate structure charts for any subsidiaries the foundation will hold
  • Details of existing shareholders' agreements or pledge arrangements
  • A list of intended beneficiaries and their relationships to the founder
  • Any existing succession documents (wills, prenuptial agreements)

The family foundation is not a product to be purchased off the shelf. Each founding deed is a bespoke governance document. Errors in the deed – particularly in the distribution rules or permitted activity clauses – cannot be corrected without a formal amendment process, which itself requires notarial form and KRS re-registration.

Specific circumstances of your business require individual analysis. A family foundation set up without a full tax audit of contributed assets forfeits the CIT exemption on income that could have been restructured before transfer – and that loss is permanent.

If your asset portfolio exceeds PLN 2m and you are planning succession within the next five years, contact us to conduct a full asset eligibility audit, draft an individual tax ruling application, and prepare the founding documentation: info@kordeckipartners.com.

Frequently asked questions

Q: Can a non-Polish resident establish a Polish family foundation?

A: Yes. Polish family foundation law does not restrict founders by nationality or tax residence. However, a non-resident founder must consider how their home jurisdiction treats the foundation – some countries classify it as a transparent entity and tax the founder on the foundation's income annually. A cross-border tax analysis is required before setup, and the process typically takes four to six weeks.

Q: Is the PLN 100,000 minimum contribution a one-time requirement?

A: The PLN 100,000 founding fund is a statutory minimum that must be maintained throughout the foundation's existence. It is not a fee – it represents the value of assets contributed to the foundation at registration. If the foundation's assets fall below this threshold, the KRS may initiate dissolution proceedings. In practice, most foundations are established with assets significantly exceeding this floor.

Q: Does the family foundation replace a will for succession purposes?

A: No. The family foundation is a wealth-holding and management structure, not a testamentary instrument. Assets transferred to the foundation leave the founder's estate and are no longer subject to inheritance rules on the founder's death. However, Polish forced heirship rules (zachowek) may still apply to assets transferred within ten years of the founder's death, creating a potential claim by statutory heirs against the foundation. This is one of the most commonly misunderstood aspects of the structure.

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 setup, tax structuring, 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.