A manufacturing group in Mazowieckie has spent two decades building three operating companies, a real estate portfolio, and a significant cash reserve. The founder is approaching sixty. His advisors have been telling him for months that the current structure – a loose cluster of companies held personally – will create a serious succession problem and an avoidable tax burden. Two instruments are on the table: a Polish family foundation and a holding company. Both are legitimate. Both are widely used. The question is which one fits.

Polish law now offers two distinct vehicles for wealth concentration and succession planning: the family foundation, introduced in May 2023 under the Ustawa o fundacji rodzinnej (Family Foundation Act), and the holding company regime, available through the Kodeks spółek handlowych (Commercial Companies Code, KSH) and the corporate income tax statute. A family foundation shields accumulated assets from personal income tax on reinvested profits and offers a clear succession mechanism, but it restricts commercial activity. A Polish holding company – typically a limited liability company or joint-stock company acting as a parent – can benefit from dividend participation exemptions and capital gains relief, but leaves assets exposed to shareholder-level taxation on exit. The right choice depends on the founder's time horizon, the nature of the assets, and the role of non-Polish structures in the group.

This analysis covers the doctrinal framework of each vehicle, the tax mechanics that distinguish them, the cross-border dimension for international groups, and the strategic signals that point toward one instrument over the other. A self-assessment checklist and a decision matrix are included. The article is written for owners, CFOs, and in-house counsel who need to brief a board or prepare a mandate for external advisors.

What does Polish law say about each vehicle?

The family foundation is a legal entity with its own legal personality. It holds assets contributed by a founder – cash, shares, real estate, receivables – and manages them for the benefit of named beneficiaries. Beneficiaries are typically family members, but the founder may also be a beneficiary. The foundation is registered with the National Court Register (KRS) maintained by the Ministry of Justice. The registration fee is PLN 500. Minimum founding assets are PLN 100,000. The foundation may not conduct general commercial activity; it is limited to a defined catalogue of permitted activities, including holding shares, leasing assets it owns, and granting loans to related entities.

The holding company regime operates differently. Under Polish corporate income tax law (CIT statute), a Polish holding company qualifies for a 95% participation exemption on dividends received from subsidiaries and a full exemption on capital gains from the sale of subsidiary shares – provided specific ownership thresholds are met. The parent must hold at least 10% of the subsidiary's shares for a continuous period of at least two years. The subsidiary must not be a tax haven entity. This regime was substantially reformed in 2023 and again adjusted in 2024, making it more accessible to mid-market groups. The Polish Financial Supervision Authority (KNF) has no direct role in holding structures unless the subsidiaries operate in regulated sectors.

The two instruments are not mutually exclusive. A family foundation can act as the apex of a holding structure, sitting above a Polish holding company that in turn owns the operating subsidiaries. This layered approach is increasingly common among groups with assets above EUR 5m. It combines the succession protection of the foundation with the tax efficiency of the holding regime at the operating level. The National Tax Administration (KAS) has issued interpretations confirming that this arrangement, if properly documented, does not constitute an artificial structure.

How does the tax treatment differ between the two structures?

Tax treatment is where the two vehicles diverge most sharply. The family foundation pays CIT at 15% on distributions to beneficiaries, not on the income it earns while assets remain inside the foundation. Income from permitted activities – dividends from subsidiaries, rental income from owned property, interest on loans to related parties – accumulates tax-free inside the foundation. The 15% CIT charge arises only when the foundation pays out benefits to beneficiaries. Distributions to the founder and first-degree relatives carry an additional personal income tax (PIT) exemption at the beneficiary level, making the effective rate on such distributions 15% at the foundation level and 0% at the beneficiary level. This is a significant advantage over direct ownership.

The holding company regime produces a different result. Dividends flowing from a subsidiary to a qualifying Polish holding company are 95% exempt from CIT – meaning only 5% of the dividend is taxed at the standard 19% CIT rate, producing an effective rate of approximately 0.95%. Capital gains on share disposals are fully exempt. However, when the holding company subsequently distributes profits to its individual shareholders, those shareholders pay 19% PIT on the dividend. There is no equivalent of the family foundation's beneficiary-level exemption for close relatives. For a founder who intends to draw income personally, the holding company creates a second layer of taxation that the foundation avoids.

Transfer pricing rules apply to both structures. Transactions between a family foundation and its related operating companies – loans, asset leases, service agreements – must be documented and priced at arm's length. The same applies to intra-group transactions within a holding structure. Groups with consolidated revenue above PLN 200m per year face enhanced transfer pricing documentation requirements, including a master file and local file. Failure to maintain adequate documentation exposes the entity to a surcharge of up to 10% of the understated income. We secured a reversal of a transfer pricing surcharge exceeding PLN 2m for a manufacturing client in the Mazowieckie region (autumn 2025), where the original documentation had failed to account for a management fee arrangement between the holding parent and its subsidiaries.

IP Box relief – the 5% CIT rate on income from qualifying intellectual property rights – is available to operating companies within either structure. It does not apply at the holding company or family foundation level. Groups with significant IP assets should therefore keep those assets in the operating subsidiaries or in a dedicated IP-holding entity below the apex structure, not inside the family foundation itself.

What are the cross-border implications for international groups?

For a foreign investor with Polish subsidiaries, or a Polish founder with assets outside Poland, both structures carry cross-border consequences that require careful mapping. The family foundation is a Polish-law entity with no direct equivalent in most EU jurisdictions. Foreign tax authorities may treat it as a trust, a company, or a transparent entity depending on their domestic classification rules. This classification question is not academic – it determines whether the foreign jurisdiction taxes the founder on the foundation's undistributed income, whether treaty benefits apply, and whether distributions to non-resident beneficiaries are subject to withholding tax in Poland.

Poland's CIT statute imposes a 15% withholding tax on distributions from a family foundation to non-resident beneficiaries, unless a tax treaty reduces that rate. Many Polish treaties reduce withholding to 5% or 0% for dividend-equivalent payments, but the application of treaty provisions to foundation distributions is not always settled. The Polish tax authority has taken inconsistent positions on this question. Groups with German, Dutch, or Scandinavian elements should obtain a binding advance ruling from the KAS before transferring assets into a family foundation. The cost of a binding ruling is PLN 40 per question, with a statutory response deadline of three months.

The holding company structure is more familiar to foreign investors. A Polish holding company receiving dividends from a Polish subsidiary and passing them upstream to a foreign parent company will generally benefit from the EU Parent-Subsidiary Directive, which eliminates withholding tax on qualifying intra-EU dividend flows. The directive requires the parent to hold at least 10% of the subsidiary for 24 months. This mirrors the domestic holding regime threshold, so a qualifying domestic holding structure typically also qualifies for directive benefits. Our team obtained interim measures protecting assets worth over EUR 5m for a German investor's subsidiary in Lower Silesia (spring 2026), where the holding structure had been challenged on substance grounds.

Pillar Two – the global minimum tax framework – affects groups with consolidated global revenue above EUR 750m. For those groups, the choice between a family foundation and a holding company has an additional dimension: the top-up tax mechanics differ depending on whether the apex entity is a foundation (which is not a standard constituent entity under the OECD model rules) or a company. Polish subsidiaries of in-scope groups should review their group's qualified domestic minimum top-up tax (QDMTT) position in light of any restructuring. For a more detailed treatment of Pillar Two mechanics for Polish subsidiaries, see our analysis at Pillar Two – practical steps for Polish subsidiaries.

Which structure fits which founder profile?

The choice between a family foundation and a holding company is not primarily a tax question. It is a governance question. The family foundation transfers legal ownership of assets to an entity that is bound by a statute (the foundation deed) to benefit named persons. The founder loses direct ownership. This is the point. The legal separation insulates the assets from the founder's personal creditors, from divorce proceedings, and from the forced heirship rules that would otherwise apply under Polish succession law. For a founder who wants to protect a business across generations and prevent fragmentation of ownership among heirs, the foundation is the stronger instrument.

The holding company, by contrast, preserves the founder's ownership. Shares in the holding company are personal assets. They can be pledged, sold, or inherited. This flexibility is valuable for founders who may want to admit a financial investor, sell a division, or take the group public within a ten-year horizon. A family foundation cannot easily admit outside investors or be taken public. Once assets are transferred into a family foundation, extracting them – other than through permitted distributions – triggers a 15% CIT charge on the market value of the returned assets. The transfer is largely irreversible in practice. That irreversibility is a risk that deserves explicit acknowledgment in any mandate.

Decision matrix for the principal scenarios:

  • Succession priority, no external investor planned, family assets above PLN 5m → family foundation as apex, holding company below for operating subsidiaries
  • Active growth phase, financial investor possible within five years → Polish holding company, foundation deferred
  • Significant real estate portfolio alongside operating businesses → family foundation for real estate, holding company for operating assets
  • Cross-border group with non-resident beneficiaries → holding company preferred until treaty position on foundation distributions is confirmed
  • IP-intensive business → operating subsidiary with IP Box, holding company or foundation above, IP stays below apex

For business owners considering a restructuring of this scale, the procedural timeline matters. Establishing a family foundation takes four to eight weeks from deed execution to KRS registration. Establishing a holding company and transferring shares to it – using a contribution in kind – takes six to twelve weeks, depending on whether a share valuation report is required. Both timelines assume clean corporate documentation in the existing companies. Groups with incomplete KRS filings or outstanding shareholders' resolutions should plan for additional time. For context on how restructuring tools interact with business continuity, see our guide on simplified arrangement proceedings.

To receive an expert assessment of your group's structure, contact info@kordeckipartners.com.

What are the compliance obligations and ongoing costs?

Both structures carry ongoing compliance obligations that are frequently underestimated at the planning stage. A family foundation must file annual financial statements with the KRS, maintain a register of assets, and produce a report on permitted activities. If the foundation conducts any activity outside the permitted catalogue – even inadvertently – the entire income of the foundation for that year becomes subject to CIT at 25%, not 15%. This punitive rate applies from the first day of the tax year in which the prohibited activity occurred. The foundation's supervisory board (rada nadzorcza) is mandatory if the number of beneficiaries exceeds 25. Board members carry personal liability for foundation obligations in defined circumstances.

A Polish holding company's compliance profile is standard for a CIT taxpayer. It must file monthly or quarterly CIT advance payments, prepare annual financial statements, and – if it qualifies for the domestic holding regime – file a notification with the KAS within the statutory deadline to preserve the exemption. Failure to file the notification on time forfeits the capital gains exemption for that tax year. The notification must be submitted at least five days before the share disposal. There is no cure mechanism once the deadline passes. That five-day window is one of the most commonly missed procedural requirements in Polish M&A transactions.

Both structures are subject to the general anti-avoidance rule (GAAR) under Polish tax law, which allows the KAS to disregard arrangements whose primary purpose is to obtain a tax benefit and which lack genuine economic substance. The GAAR is not applied routinely, but it is applied to holding and foundation structures where substance is thin – where the holding company has no staff, no real decision-making, and no economic activity beyond passing dividends. Building substance into the apex entity – a physical office, qualified directors, real board meetings – is not optional. It is the difference between a defensible structure and one that fails under a KAS audit. KSeF Poland obligations (mandatory e-invoicing) apply to the holding company if it issues invoices; the family foundation is unlikely to be a KSeF-obliged taxpayer unless it conducts taxable VAT activities.

Checklist – what to prepare before choosing a structure:

  • Complete asset inventory: shares, real estate, IP, cash, receivables, with current valuations
  • Beneficiary list: names, residency, relationship to founder, and any non-EU elements
  • Group revenue data: last three years' consolidated figures to assess Pillar Two exposure
  • Existing shareholders' agreements and pledge registers: check for consent requirements on share transfers
  • Outstanding KRS filings and corporate resolutions: clean these up before any restructuring

For groups that also operate invoicing systems across multiple jurisdictions, the interaction between KSeF Poland requirements and the holding company's invoicing obligations is a practical point that tax advisors often raise late. For an international perspective on KSeF compliance, see our article on what KSeF means for your business in Sweden.

What is the strategic outlook for these instruments?

The family foundation regime is young. It entered force in May 2023, and fewer than 3,000 foundations had been registered by the end of 2025. The KAS is still developing its audit methodology for foundations, and several interpretive questions – particularly around the permitted activity catalogue and the treatment of foundation loans to related companies – remain unsettled. Legislative amendments are expected in 2026. Founders who establish foundations now are doing so on the basis of current law, which may be adjusted. A well-drafted foundation deed with flexibility clauses will be easier to adapt to legislative change than a rigid deed that mirrors the current statutory minimum.

The holding company regime, by contrast, is mature. It has been tested in administrative courts and by the Supreme Administrative Court (NSA). The participation exemption rules have been in place, in various forms, since Poland's accession to the EU in 2004. The 2023 reforms made the regime more attractive for mid-market groups by lowering the subsidiary ownership threshold and expanding the range of qualifying subsidiaries. Further legislative tightening is possible – particularly in response to OECD anti-hybrid and BEPS measures – but the core mechanics are stable. For groups that need predictability over a five-to-ten-year horizon, the holding company offers a more tested framework.

The direction of travel in Polish tax policy favors structures with genuine economic substance, transparent beneficiary identification, and clear business purpose. Both the family foundation and the holding company can satisfy these requirements if properly designed. Both fail if they are implemented as paper arrangements. The trend toward mandatory beneficial ownership disclosure – through the Central Register of Beneficial Owners (CRBR) – means that the privacy argument for either structure is diminishing. Founders should plan on the assumption that the identity of foundation beneficiaries and holding company shareholders will be accessible to tax and regulatory authorities across the EU.

The medium-term outlook also points toward greater convergence between family foundation and holding company planning. Advisory practice is already moving toward layered structures that use both instruments. The foundation provides the succession and asset-protection layer. The holding company provides the operational and investment layer. The two layers are connected by a set of intercompany agreements – loans, service agreements, asset leases – that must be maintained at arm's length. The compliance burden of a layered structure is higher than either instrument alone, but for groups above EUR 10m in assets, the long-term tax and succession benefits generally justify that burden. A tax advisor Warsaw-based with cross-border experience is essential for designing and maintaining these structures.

Specific advice on your group's situation requires a full review of the asset base, the beneficiary profile, and the existing corporate structure. To discuss how either instrument applies to your case, email info@kordeckipartners.com.

Frequently asked questions

Q: Can a family foundation hold shares in a foreign company?

A: Yes. The Family Foundation Act permits a foundation to hold shares in both Polish and foreign entities. However, if the foreign subsidiary is located in a jurisdiction classified as a tax haven under Polish law, distributions from that subsidiary to the foundation may be subject to controlled foreign company (CFC) rules, triggering additional CIT at the foundation level. The foundation's permitted activity catalogue explicitly includes holding shares in companies, so the activity itself is not restricted – but the tax consequences depend on where the subsidiary is located and whether it has genuine economic substance.

Q: How long does it take to transfer assets into a family foundation, and what are the tax costs?

A: The transfer of assets to a family foundation is not subject to CIT at the time of contribution – the founder does not realise a taxable gain on transfer. However, if real estate is contributed, civil law transaction tax applies at 2% of the property's market value. Share contributions are not subject to transaction tax. The KRS registration process takes four to eight weeks from deed execution. The practical bottleneck is usually the asset valuation and the preparation of the foundation deed, which together can take four to six weeks before the notarial act is executed.

Q: Is the holding company regime available to a sole founder who owns 100% of the operating company?

A: Yes, provided the interposed holding company – not the founder personally – holds at least 10% of the operating company's shares for at least two years. The founder establishes the holding company, contributes the operating company shares to it (or sells them to it), and the holding company then qualifies for the participation exemption once the two-year holding period has elapsed. The two-year period does not restart if the holding company acquires additional shares in the same subsidiary, provided the original 10% block has been held continuously. This is a common misconception: partial top-up acquisitions do not reset the clock.

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, succession planning, and cross-border transactions. 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.