A Silesian manufacturing group generates significant profits year after year. The founder is approaching retirement. His two adult children disagree on strategy. Without a clear succession structure, the business faces fragmentation, forced buyouts, and a tax bill that could reach several million zloty at the moment of transfer. The Polish family foundation, introduced in May 2023, was designed precisely for this situation.
The Polish family foundation (fundacja rodzinna) is a legal vehicle that separates family wealth from the operating business while deferring corporate income tax until assets are distributed to beneficiaries. Under Polish foundation law, the founder contributes assets worth at least PLN 100,000 and the foundation holds them in a tax-privileged environment. Corporate income tax at 15% applies only when benefits are paid out – not during accumulation. This structure is registered with the National Court Register (KRS) and supervised by the District Court in Warsaw, which maintains the dedicated register of family foundations.
This analysis covers the doctrinal foundations of the vehicle, its principal tax advantages, the cross-border dimension for foreign founders and beneficiaries, practical setup steps, and the strategic outlook for owners considering this path. Each section opens with a direct answer so that readers can assess relevance before reading in full.
What is the legal framework governing Polish family foundations?
The family foundation rests on a dedicated statute that came into force on 22 May 2023. Before that date, Polish law offered no comparable domestic succession vehicle. Founders had to rely on holding companies, trusts in foreign jurisdictions, or contractual succession arrangements – each carrying significant tax exposure and governance complexity.
The statute created a new legal entity with separate personality. The foundation holds assets, manages them, and pays benefits to beneficiaries. It is neither a company nor a trust. The Board of the Foundation (zarząd) acts as the executive organ. The Assembly of Beneficiaries (zgromadzenie beneficjentów) exercises oversight. A supervisory board is optional unless the number of beneficiaries exceeds 25, at which point it becomes mandatory.
Registration is handled by the National Court Register (KRS) through a dedicated register kept by the District Court in Warsaw. The founding deed must be executed before a notary public. The founder specifies the foundation's purpose, the list of initial beneficiaries, and the rules for distributing benefits. Changes to the founding deed after registration require notarial form and an update to the KRS.
The Polish Financial Supervision Authority (KNF) has no supervisory role over family foundations, which distinguishes this vehicle from regulated investment funds. However, anti-money-laundering rules under the framework implementing the EU's Fourth and Fifth AML Directives apply. The foundation must register its beneficial owners with the Central Register of Beneficial Owners (CRBR) within 7 days of registration in the KRS.
One doctrinal point deserves attention. The family foundation is not a charitable entity. Its purpose is expressly patrimonial – accumulation and transfer of family wealth. This distinguishes it from public benefit foundations (fundacje organizacji pożytku publicznego) and means that the tax treatment is governed by corporate income tax rules, not the preferential regime for public benefit organisations.
What are the core tax advantages of a Polish family foundation?
The tax design of the family foundation is its primary attraction. The foundation pays no corporate income tax (CIT) on investment income during the accumulation phase. Dividends received from Polish subsidiaries, interest, rental income, and capital gains from the disposal of assets held by the foundation are all exempt while inside the vehicle. Tax is triggered only at the moment of distribution.
When benefits are paid to beneficiaries, the foundation pays CIT at 15% on the distributed amount. Beneficiaries who are the founder's spouse, children, grandchildren, or parents (so-called Group 0 relatives) pay no personal income tax on benefits received. This combination – 15% at entity level, 0% at beneficiary level – creates a total tax cost significantly below the standard dividend route, where a Polish company pays 19% CIT and the shareholder pays a further 19% withholding tax.
We structured a family foundation for a manufacturing client in the Mazowieckie region (autumn 2024) where the founder's three children were designated Group 0 beneficiaries. The projected tax saving on a ten-year distribution plan exceeded PLN 4m compared with direct shareholding.
The exemption during accumulation covers a defined list of permitted activities. These include:
- Holding shares and interests in companies
- Lending money to beneficiaries or group companies
- Leasing assets to beneficiaries
- Acquiring and disposing of securities and financial instruments
- Holding real property for own use or leasing it to third parties
Activities outside this list – principally active trading or manufacturing – are taxed at 25% CIT, not 15%. This is a deliberate legislative choice to prevent the family foundation from becoming a general-purpose tax shelter. Founders who want to run an operating business must keep that activity in a separate company held by the foundation, not inside the foundation itself.
The double tax treaty between Poland and the Netherlands and similar treaties affect how foreign-source income flows into the foundation and how benefits paid to non-resident beneficiaries are taxed. This is addressed in the cross-border section below.
How does the cross-border dimension affect family foundation planning?
The family foundation is a Polish legal entity subject to Polish tax residency rules. Its worldwide income is taxable in Poland – subject to treaty relief. For founders with assets or beneficiaries in multiple jurisdictions, the cross-border dimension requires careful analysis before the foundation is established, not after.
Foreign founders face the first question: can a non-Polish citizen establish a Polish family foundation? The answer is yes. Polish foundation law imposes no nationality requirement on the founder. A German, Ukrainian, or Dutch entrepreneur can establish a Polish family foundation, contribute assets located anywhere in the world, and designate beneficiaries of any nationality. The foundation must, however, be registered in Poland and maintain a registered address here.
We assisted a German investor in establishing a Polish family foundation to hold a Lower Silesia real estate portfolio (spring 2025). The cross-border structure required analysis of the Poland-Germany tax treaty, German exit tax rules, and the treatment of foundation distributions under German income tax law. The total setup timeline from first instruction to KRS registration was 11 weeks.
For beneficiaries residing outside Poland, the 15% CIT paid by the foundation does not automatically satisfy the tax liability in the beneficiary's country of residence. Germany, for example, treats distributions from foreign foundations as income subject to German income tax, with a credit for Polish tax paid. The net position depends on the applicable treaty and the beneficiary's marginal rate. Tax advisors in both jurisdictions must align the distribution schedule.
Transfer pricing rules apply where the foundation engages in transactions with related entities – for example, lending to a subsidiary or leasing assets to a company controlled by the founder. The foundation and its related parties must document these transactions in accordance with Polish transfer pricing regulations if thresholds are met. This is an area where errors can trigger tax surcharges and interest. Founders should treat compliance here with the same discipline applied to operating companies.
Anti-avoidance rules also apply. The general anti-avoidance rule (GAAR) administered by the National Revenue Administration (Krajowa Administracja Skarbowa, KAS) can challenge arrangements where the foundation is used primarily for tax benefits rather than genuine succession planning. The foundation's governance documents should reflect a real succession purpose, not merely a tax optimisation rationale.
What does the setup process look like in practice?
Setting up a Polish family foundation takes between 6 and 14 weeks from initial instruction to KRS registration, depending on the complexity of the asset base and the number of beneficiaries. The statutory minimum initial contribution is PLN 100,000. In practice, foundations holding operating company shares or real property involve contributions valued in the millions.
The process follows five main steps. First, the founder prepares a list of assets to be contributed and a draft beneficiary structure. Second, a founding deed is drafted and executed before a notary public. Third, the foundation is registered with the KRS – the court has 7 days to review the application if filed electronically. Fourth, assets are transferred to the foundation. Fifth, the foundation is registered with KAS as a CIT taxpayer and, where relevant, as a VAT payer.
What to prepare before the notary appointment:
- Valuation of all assets to be contributed (at least PLN 100,000)
- Identification documents for the founder and all proposed beneficiaries
- Draft list of permitted activities and benefit rules
- Proposed composition of the Board of the Foundation
- CRBR data for beneficial owner registration
The founding deed is the most important document. It specifies who the beneficiaries are, what benefits they receive, under what conditions, and what happens to the foundation's assets if the founder dies or the foundation is dissolved. Ambiguity in the founding deed generates disputes. We have seen cases where founders used standard template deeds downloaded online, only to discover that the distribution rules did not match their actual intentions.
Annual obligations after registration include filing a CIT return (CIT-8), maintaining accounting records under Polish accounting law, and filing a beneficial ownership update with the CRBR whenever the beneficiary list changes. If the foundation's assets include real property, real estate tax obligations apply. Foundations with assets above EUR 10m are subject to the minimum income tax introduced alongside the family foundation statute – a rule that requires careful monitoring.
How do IP Box and other tax incentives interact with the family foundation?
The family foundation does not itself qualify for the IP Box preferential rate. IP Box (the 5% CIT rate on income from qualifying intellectual property rights) is available to companies that conduct research and development activity and hold qualifying IP. A foundation that passively holds IP rights does not satisfy the activity requirement and therefore cannot apply IP Box at foundation level.
The correct structure for IP-intensive families is to hold the operating IP company inside the foundation. The company applies IP Box at 5% on qualifying income. Dividends flow up to the foundation free of withholding tax (the participation exemption applies between Polish entities where the foundation holds at least 10% of shares for an uninterrupted 2-year period). Inside the foundation, those dividends accumulate tax-free. Distribution to Group 0 beneficiaries triggers 15% CIT at foundation level and 0% personal income tax.
This layered approach – IP Box at company level, tax-free accumulation at foundation level, preferential distribution to family – is one of the most tax-efficient structures available under current Polish tax law. It requires alignment between the IP Box documentation, the transfer pricing file for any intra-group IP licences, and the foundation's permitted activity list. Our tax practice has structured eight such foundations since May 2023.
KSeF (the National e-Invoice System, Krajowy System e-Faktur) obligations also affect foundations that conduct VAT-able activities. A foundation leasing commercial property, for example, must issue structured e-invoices through KSeF once the mandatory phase applies to its turnover bracket. Founders planning to use the foundation as a landlord should factor KSeF compliance into the setup timeline. For background on what KSeF means for business operations, see our analysis of what KSeF means for your business.
One area that attracts scrutiny from KAS is the use of the family foundation to hold assets that were previously subject to restructuring. If the founder contributed assets to the foundation shortly after a tax-free restructuring, the KAS may examine whether the sequence of transactions constituted an artificial arrangement under the GAAR. Founders should ensure at least a 12-month gap between restructuring events and foundation contributions where the tax treatment of either step is sensitive.
Compliance obligations extend beyond tax. Anti-corruption compliance frameworks affect foundations that hold interests in companies operating in regulated sectors or public procurement markets. A family foundation holding shares in a construction company, for instance, must ensure that the foundation's governance does not create gaps in the company's compliance programme. For context on that framework, see our note on the anti-corruption compliance framework under Polish law.
To receive an expert assessment of your family foundation structure and its interaction with IP Box or KSeF obligations, contact info@kordeckipartners.com.
What is the strategic outlook for family foundations in Poland?
The family foundation is less than three years old. Its tax treatment has already been amended once – in January 2024, the legislature narrowed the definition of permitted activities and tightened the 25% rate for activities outside the permitted list. Further amendments are possible. Founders should build governance documents that can absorb legislative changes without requiring a full restructuring.
The vehicle has gained significant traction. Since May 2023, several thousand family foundations have been registered in Poland. The majority hold shares in operating companies, but a growing number hold real property portfolios and financial assets. The KRS register is publicly searchable, meaning that the existence of a family foundation – though not its detailed beneficiary list – is visible to third parties.
Judicial practice is still developing. The Supreme Administrative Court (Naczelny Sąd Administracyjny, NSA) has not yet issued rulings on the most contested points – including the boundary between permitted and non-permitted activities and the application of GAAR to foundation structures. Individual tax rulings (interpretacje indywidualne) issued by the KAS provide some guidance, but they bind only the applicant. Founders in novel situations should seek their own ruling before implementing the structure.
The political environment is relevant. The family foundation was introduced by one government and has been administered by its successor. Both have expressed support for the vehicle as a tool for keeping Polish capital in Poland. That cross-party consensus reduces – but does not eliminate – legislative risk. Founders planning ten-year or twenty-year accumulation strategies should model scenarios in which the CIT rate at distribution rises from 15% to 19% or the Group 0 exemption is narrowed.
For foreign investors, the family foundation offers a credible alternative to Dutch, Luxembourgish, or Austrian holding structures for Polish assets. The vehicle is onshore, well-regulated, and carries no reputational risk associated with low-tax jurisdictions. For Polish entrepreneurs with EU-based business partners or investors, this domestic credibility is an underappreciated advantage.
Your specific succession situation may involve asset classes, beneficiary structures, or cross-border elements that require individual analysis. Acting without that analysis precludes the most favourable tax position and may foreclose options that are only available before the foundation is registered.
To discuss how the family foundation structure applies to your business and family, email info@kordeckipartners.com.
Frequently asked questions
Q: Can a family foundation in Poland own foreign assets, including real estate abroad?
A: Yes. Polish foundation law does not restrict the geographic location of assets held by the foundation. The foundation may own real property, company shares, or financial assets located outside Poland. The foundation will be taxed in Poland on worldwide income, subject to applicable double tax treaties. Foreign real estate may also be subject to local property taxes in the country where it is located – this must be assessed separately.
Q: How long does it take and what does it cost to set up a Polish family foundation?
A: The registration process takes between 6 and 14 weeks from initial instruction. The minimum statutory contribution is PLN 100,000. Notarial fees for executing the founding deed depend on the value of assets contributed and are set by statute. Legal advisory fees vary based on complexity. KRS registration fees are modest – under PLN 500 for electronic filing. Ongoing annual costs include accounting, CIT compliance, and CRBR updates.
Q: Does the family foundation protect assets from the founder's creditors?
A: Once assets are validly contributed to the foundation, they form a separate estate and are generally not available to the founder's personal creditors. However, Polish insolvency law contains clawback provisions: contributions made within 5 years before the founder's insolvency may be challenged by a trustee in bankruptcy. The foundation does not provide unconditional creditor protection and should not be established primarily for that purpose. Genuine succession intent must be documented from the outset.
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.