A Polish entrepreneur with a profitable operating company faces a familiar dilemma. Dividends are taxed on extraction. Selling the business triggers capital gains. Passing assets to children involves gift tax exposure. The fundacja rodzinna (family foundation) regime, in force since May 2023, addresses all three pressure points within a single legal structure.
The Polish family foundation is a legal entity that holds and manages family wealth, distributing benefits to designated beneficiaries without triggering corporate income tax at the foundation level on most passive income streams. The founding contribution is exempt from inheritance and gift tax when made by the founder. Distributions to the founder and first-degree relatives are taxed at 0%, while distributions to more distant beneficiaries attract a 15% flat rate.
This alert covers what the regime actually delivers, who qualifies, the setup mechanics, and the three action items owners should complete before year-end. The structure is not self-executing – specific conditions must be met and maintained to preserve the tax treatment.
What does the family foundation regime actually change?
Before May 2023, Polish law offered no dedicated vehicle for multigenerational wealth holding. Business owners relied on holding companies, trusts established abroad, or simple testamentary arrangements – each carrying friction costs. The family foundation fills that gap. It is registered with the National Court Register (KRS) and supervised by the District Court in Warsaw for all foundations, regardless of the founder's location.
The core tax shift is this: the foundation pays no corporate income tax (CIT) on dividends received from Polish or EU/EEA companies, on interest, or on rental income from assets contributed by the founder. Tax is deferred until distribution. At that point, a 15% flat CIT applies at the foundation level – but drops to 0% for the founder and qualifying first-line relatives (spouse, children, grandchildren, parents, siblings). That is a material improvement over the standard 19% dividend withholding route.
Three areas where the change is most visible:
- Sale of shares held by the foundation – exempt from CIT if the foundation holds at least 10% of the target company for a minimum of two years
- Reinvestment of proceeds within the foundation – no tax event on internal reallocation
- Succession planning – assets pass to beneficiaries outside the standard inheritance procedure, reducing probate delays
One constraint deserves early attention. The foundation may not conduct active business operations directly. It may hold shares, real estate, and financial instruments – but running a manufacturing line or IT services contract through the foundation itself triggers a punitive 25% CIT rate on that income. The distinction between permitted asset management and prohibited business activity is where most structuring errors occur.
Who is affected – and what are the thresholds?
The family foundation is not a mass-market product. The minimum founding contribution is PLN 100,000. There is no upper limit. In practice, the structure becomes economically rational when the assets transferred exceed PLN 2m – below that threshold, setup and annual compliance costs erode the tax benefit within the first few years.
We secured a full restructuring outcome for a manufacturing client in the Mazowieckie region (autumn 2025), transferring a portfolio of operating company shares and real estate into a family foundation and achieving a zero-tax distribution to the founder's adult children within the same fiscal year.
The founder must be a natural person. There is no requirement of Polish citizenship or residence – a German or Ukrainian founder may establish a Polish family foundation, provided the foundation itself is registered in Poland. Beneficiaries may be any natural persons designated in the foundation's statute; they need not be family members in the legal sense, though the tax exemption for 0% distributions is limited to the founder's close relatives.
Transfer pricing rules apply where the foundation transacts with related parties. The Polish Tax Administration (KAS) has flagged foundation-related structures as an audit priority for 2025 and 2026. Founders who contribute assets at below-market value, or who arrange service agreements between the foundation and their operating companies without arm's-length pricing, face reassessment risk. Polish tax law requires that all intra-group transactions – including those involving a family foundation – be documented under standard transfer pricing rules where the transaction value exceeds PLN 2m per year.
Our team obtained a favourable advance tax ruling for a technology group in Lower Silesia (spring 2026), confirming that IP Box income flowing through an operating subsidiary into the family foundation qualified for the passive income exemption – removing uncertainty before a planned restructuring.
What should owners do now?
Three action items carry immediate deadlines. First, founders who contributed assets in 2023 or 2024 and have not yet filed a full transfer pricing documentation package for intra-foundation transactions should do so before the next KAS audit cycle. The documentation deadline follows the CIT return deadline – 31 March of the year following the tax year in question. Missing it forfeits the penalty protection that documentation provides.
Second, any founder considering a contribution of real estate or shares should complete the valuation and notarial deed before 31 December 2026. A legislative review of the family foundation regime is expected in the second half of 2026. The direction of potential amendments is not yet confirmed, but locking in the current founding contribution exemption before any statutory change is straightforward risk management.
Third, founders operating across borders should verify whether their home jurisdiction recognises the Polish family foundation as a transparent or opaque entity. Germany, for example, may treat distributions differently under its controlled foreign corporation rules. This is not a reason to avoid the structure – but failing to obtain a cross-border tax opinion before the first distribution is an irreversible error that can trigger double taxation on amounts already paid out.
What to prepare before engaging advisors:
- Current ownership structure chart, including all operating and holding entities
- Estimated market value of assets intended for contribution
- List of intended beneficiaries and their relationship to the founder
- Details of any existing cross-border holding arrangements
- Prior correspondence with KAS, if any, regarding the planned structure
For founders already using dividend distribution structures in Polish companies, the family foundation adds a layer of deferral that the standard holding company route does not provide. For businesses with digital or IP-intensive revenue, the interaction between IP Box relief at the operating company level and the passive income exemption at the foundation level is a planning opportunity that requires coordinated advice. Businesses with e-invoicing obligations should also review how KSeF Poland requirements apply to transactions between the foundation and related operating entities. Cross-border founders should additionally consider what KSeF means for UAE-based business operations where Polish subsidiaries are involved.
The family foundation regime is technically sound but operationally demanding. The 0% distribution window is real – and so is the 25% penalty rate for founders who miscategorise active income as passive. Getting the initial structure right costs a fraction of correcting it after the first audit.
Your company's specific situation requires a tailored assessment before any contribution is made. An incorrect founding contribution or a misclassified income stream creates a tax exposure that cannot be unwound without cost.
If your business holds assets exceeding PLN 2m and you are considering a family foundation structure – or reviewing an existing one ahead of the 2026 legislative review – we will analyse your ownership structure, prepare the statutory documents, and coordinate the transfer pricing documentation: info@kordeckipartners.com.
Frequently asked questions
Q: Can a foreign national found a Polish family foundation without a Polish tax identification number?
A: A foreign national may found a Polish family foundation. However, the founder must obtain a Polish tax identification number (NIP) before the notarial deed establishing the foundation is executed. The registration process with the National Court Register (KRS) requires the NIP to be included in the founding documents. Processing time for NIP issuance is typically five to seven business days.
Q: Does contributing shares to the family foundation trigger capital gains tax for the founder?
A: Under current Polish tax law, a founding contribution of shares to a family foundation is not treated as a taxable disposal by the founder. No capital gains tax arises at the point of contribution. Tax is deferred until the foundation distributes assets or income to beneficiaries. This deferral is one of the primary economic rationales for the structure – but it requires that the contribution be structured as a founding contribution rather than a sale or exchange.
Q: How long does it take to establish a family foundation in Poland, and what does it cost?
A: The setup process involves a notarial deed, KRS registration, and opening a bank account for the foundation. KRS registration typically takes four to six weeks from filing. Total professional fees for a straightforward structure – excluding asset valuation and transfer pricing documentation – generally range from PLN 15,000 to PLN 40,000 depending on complexity. Ongoing annual compliance costs (accounting, audit where required, transfer pricing documentation) should be factored into the economic analysis 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 structuring, tax planning, and succession. 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.