On paper, the choice looks simple: either accumulate wealth inside a holding company or transfer it into a family foundation. In practice, the two instruments operate under fundamentally different legal and tax regimes, and selecting the wrong one can lock an owner into a structure that is expensive to unwind.

Polish law now offers two distinct vehicles for wealth preservation and succession planning: the fundacja rodzinna (family foundation, FR) introduced in May 2023, and the traditional holding company structure governed by the Kodeks spółek handlowych (Commercial Companies Code, KSH). The family foundation enjoys a flat 15% CIT rate on distributions to beneficiaries, while a holding company can access a participation exemption on dividends under specific conditions. Choosing between them depends on the owner's liquidity needs, succession timeline, and appetite for ongoing compliance obligations.

This alert covers what changed with the family foundation regime, who is most affected by the thresholds introduced, and what immediate steps owners and their advisors should take before the end of 2026.

What has changed in the Polish family foundation regime?

The family foundation framework, administered through the National Court Register (KRS) and supervised in part by the Polish Financial Supervision Authority (KNF) where investment activities are involved, became operational in May 2023. Since then, the tax authorities – the National Revenue Administration (KAS) – have issued a series of binding interpretations that significantly narrow the scope of permitted business activity. The core rule is that a family foundation may conduct only activities listed exhaustively in the founding act. Any income earned outside that list is taxed at a punitive 25% CIT rate rather than the standard 15%.

Two thresholds matter most. First, a family foundation must have initial assets of at least PLN 100,000 at registration. Second, distributions to beneficiaries who are not in the first or second degree of kinship trigger a 15% CIT charge at the foundation level, plus a 10% personal income tax surcharge on the recipient. Owners who assumed tax-neutral cascading distributions to distant relatives have been caught off guard by this layered cost.

The KAS has also clarified that lending money at below-market rates to related parties constitutes a non-permitted activity. This directly affects family groups that historically used intra-group loans as a cash management tool – a practice now subject to scrutiny comparable to that applied in transfer pricing disputes.

Who is affected – and when does the holding company win?

The holding company remains the preferred vehicle when the owner's primary goal is active reinvestment rather than succession. Under Polish tax law, a holding company that holds at least 10% of shares in a subsidiary for a minimum of two years can receive dividends free of withholding tax. Capital gains on the disposal of those shares are also exempt, provided the subsidiary is not a real-estate-rich entity. These exemptions are unavailable to a family foundation, which cannot hold shares for purely commercial reinvestment purposes without risking the 25% penalty rate.

Three scenarios illustrate the split clearly:

  • A manufacturing group in Silesia reinvesting profits into new production lines – holding company wins on flexibility and participation exemption.
  • An IT founder in Mazowieckie seeking to pass IP Box-generated wealth to two children over 20 years – family foundation wins on succession certainty and 15% flat rate.
  • A foreign investor entering Poland through a Dutch intermediate – holding company wins because the family foundation cannot be a party to most double-tax treaty structures.

We secured a restructuring outcome that reduced effective tax on a succession transfer exceeding PLN 8m for a manufacturing client in the Silesia region (autumn 2025). The decisive factor was identifying that the client's reinvestment timeline was under five years – too short to justify the illiquidity of a family foundation. We obtained a favourable binding tax ruling for an IT services client in Mazowieckie protecting IP Box income channelled through a family foundation (spring 2026).

For businesses with KSeF Poland compliance obligations already in progress, the structural choice also affects invoice flow and VAT grouping options. A family foundation cannot join a VAT group, while a holding company can – a point explored further in our analysis of what KSeF means for your business and in our dedicated KSeF deadline timeline for 2026–2027.

What should owners do now?

The window for restructuring before the 2026 year-end tax assessment cycle closes faster than most owners expect. A holding company restructuring typically requires three to six months to complete, including KRS registration, share transfer documentation, and transfer pricing benchmarking. A family foundation registration takes four to eight weeks at the KRS, but the founding act must be notarised and the asset transfer documented for CIT purposes before the end of the tax year to benefit from that year's exemption.

Owners should prioritise four immediate steps:

  • Map all income streams against the permitted-activity list for family foundations.
  • Calculate the effective tax rate under each structure over a five-year horizon, including distributions to all intended beneficiaries.
  • Assess whether existing intra-group loans would survive a KAS audit under the new family foundation rules.
  • Confirm whether any planned asset transfers qualify for the participation exemption available to holding companies.

Delaying this analysis past Q3 2026 forfeits the ability to restructure within the current tax year. That is an irreversible consequence: the owner loses 12 months of potential tax efficiency and may face a personal liability exposure if distributions already made are reclassified by KAS as non-permitted activity income.

Specific circumstances of your company require an individual assessment before the year-end deadline. Choosing the wrong structure now precludes a tax-neutral correction later – unwinding a family foundation triggers CIT on the full value of returned assets.

If your group holds assets above PLN 100,000 and is evaluating succession or reinvestment structures, we will map your income streams, model the five-year tax differential, and prepare the founding act or holding restructuring documentation: info@kordeckipartners.com.

Frequently asked questions

Q: Can a family foundation and a holding company be used together in the same group structure?

A: Yes, but the design requires care. A family foundation can hold shares in an operating holding company, provided the holding company itself is not conducting activities that would be non-permitted at the foundation level. The tax treatment of dividends flowing from the holding company to the foundation is subject to a 15% CIT rate at the point of distribution to beneficiaries. A Polish tax advisor should model the combined effective rate before committing to a layered structure.

Q: How long does it take to register a family foundation in Poland, and what does it cost?

A: Registration at the National Court Register typically takes four to eight weeks from the date of notarial deed. The minimum initial asset contribution is PLN 100,000. Notarial fees depend on the value of assets transferred, and a founding act for a complex multi-beneficiary structure can cost between PLN 5,000 and PLN 20,000 in notarial charges alone. Court registration fees are fixed at PLN 500.

Q: Is it true that a family foundation pays no tax on investment income?

A: This is a common misconception. A family foundation pays no CIT on income accumulated inside the foundation – dividends received, interest, and capital gains are exempt at the accumulation stage. However, tax at 15% CIT becomes due when assets are distributed to beneficiaries. Income from activities outside the permitted list is taxed immediately at 25% CIT, regardless of whether a distribution is made. The tax deferral benefit is real, but it is not a full exemption.

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