On paper, choosing between a family foundation and a holding company looks like a simple tax question. In practice, the two structures serve fundamentally different purposes – and selecting the wrong one forfeits succession rights, triggers unexpected tax exposure, or locks assets into a form that cannot easily be unwound.

Polish law introduced the family foundation (fundacja rodzinna) in May 2023, creating a dedicated vehicle for multigenerational wealth preservation. A holding company – typically a limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o.) or joint-stock company (spółka akcyjna, SA) – remains the standard tool for active business grouping and tax optimisation. The choice between them depends on whether the owner's priority is asset protection and succession or operational control and investment flexibility.

This alert covers what changed with the family foundation legislation, who is affected by each structure's thresholds and restrictions, and what immediate steps owners should take before the end of 2026.

What did the 2023 family foundation legislation change?

The family foundation framework, registered with the National Court Register (KRS) and supervised by the District Court in Warsaw for foundations, created a new legal person that holds assets for defined beneficiaries. Before May 2023, Polish law had no equivalent. Wealthy families used holding companies, trusts in foreign jurisdictions, or informal arrangements – each carrying its own compliance burden. The National Revenue Administration (Krajowa Administracja Skarbowa, KAS) had long flagged offshore holding structures as transfer pricing risk areas.

The new framework introduced three material changes. First, the foundation itself pays no income tax on passive income from subsidiaries – dividends, interest, and rental income accumulate tax-free inside the foundation. Second, distributions to beneficiaries are taxed at 15% (or 0% for the founder and first-degree relatives). Third, the foundation may conduct limited business activity, but exceeding those limits triggers a punitive 25% CIT rate on the excess income. That 25% threshold is the structural trap most founders miss.

  • Tax-free accumulation of passive income inside the foundation
  • 15% distribution tax for second-degree beneficiaries
  • 0% rate for founder and immediate family
  • 25% punitive CIT if business activity limits are breached
  • Minimum initial asset contribution of PLN 100,000

The Polish Financial Supervision Authority (KNF) has no direct oversight of family foundations, but foundations holding financial instruments must still comply with capital markets rules. Owners who transferred operating businesses – rather than passive holdings – into foundations during 2023 and 2024 are now facing KAS queries about the scope of permitted activity.

Who is affected and which thresholds determine the right structure?

The family foundation suits owners whose primary goal is succession and passive wealth management. The holding company suits owners who need active investment flexibility, IP Box benefits under Polish tax law, or a platform for future M&A. Mixing these goals into one vehicle is where complexity becomes costly.

Consider a manufacturing group in Mazowieckie (autumn 2025): the founder transferred both the operating subsidiary and a real estate portfolio into a newly registered family foundation. Within six months, KAS questioned whether the operating subsidiary's revenues constituted impermissible business activity. We secured a clarification ruling that preserved the foundation's tax status – but the process took four months and required restructuring the subsidiary's dividend policy. The lesson: operating companies belong inside a holding, not inside the foundation itself.

For a German investor's Polish subsidiary in Lower Silesia (spring 2026), our team structured a two-tier arrangement: a holding company (SA) sitting between the foundation and the operating entities. This preserved IP Box eligibility for the technology subsidiary, maintained transfer pricing compliance across the group, and kept the foundation's passive income status intact. The holding layer added roughly PLN 15,000 in annual compliance costs – a fraction of the tax exposure it eliminated.

The practical thresholds that determine structure:

  • Active business revenues above PLN 1m annually – use a holding company layer
  • Succession horizon under 10 years – family foundation adds immediate value
  • IP Box or R&D relief claims – must sit in an operating company, not the foundation
  • Foreign beneficiaries – treaty analysis required before any distribution

Owners considering KSeF Poland compliance for their invoice flows should also note that the family foundation, if it issues invoices, falls within the mandatory KSeF scope from 2026. For background on KSeF timelines affecting cross-border structures, see our KSeF deadline and timeline guide. Employment arrangements within group structures carry their own compliance layer – our overview of employer duties under Polish law addresses the HR dimension. For groups with cross-border income flows, the double tax treaty key provisions guide covers treaty interaction with both structures.

Choosing the wrong structure does not merely create inefficiency. It forfeits succession protections that cannot be retroactively applied, and it exposes the founder to personal liability for distributions made under an incorrect tax classification.

What to prepare before restructuring:

  • Asset inventory distinguishing passive holdings from operating assets
  • Beneficiary map with residency and treaty status for each person
  • Revenue breakdown: passive vs. active income for the past two years
  • IP and R&D asset register to assess IP Box eligibility

Specific circumstances of your group determine whether the family foundation, a holding company, or a combined structure is appropriate. Choosing without a full asset and beneficiary analysis precludes the most favourable tax treatment and may be irreversible once assets are transferred.

To receive an expert assessment of your ownership structure and succession options, contact info@kordeckipartners.com. If your group holds assets exceeding PLN 5m or includes foreign beneficiaries, we will map the structure, identify the applicable thresholds, and prepare a written recommendation within 10 business days.

Frequently asked questions

Q: Can a family foundation own shares in an operating company?

A: Yes. The foundation may hold shares in operating companies and receive dividends tax-free. The restriction applies to the foundation itself conducting active business. Holding a subsidiary that conducts business is permitted – the subsidiary pays its own CIT, and the foundation receives the dividend passively. This distinction is the basis of the two-tier structure used by most advisors.

Q: How long does it take to register a family foundation in Poland?

A: Registration with the National Court Register typically takes four to eight weeks from submission of a complete application. The foundation requires a notarial deed, a minimum PLN 100,000 asset contribution, and appointment of the foundation's council. Errors in the founding documents are the most common cause of delay and cannot be corrected without a further notarial act.

Q: Is a holding company always more expensive to maintain than a family foundation?

A: Not necessarily. A holding company with no employees and limited transactions may cost PLN 8,000–12,000 annually in accounting and compliance. A family foundation with complex beneficiary arrangements and regular distributions may cost more. The relevant comparison is not maintenance cost but tax efficiency over a 10–20 year horizon, which depends entirely on the owner's asset mix and succession goals.

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 ownership structuring, family foundation registration, holding company design, and tax compliance. 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.