A Polish entrepreneur with three operating subsidiaries and a real-estate portfolio faces a choice that can define the next generation of ownership. Two structures dominate the conversation: the fundacja rodzinna (family foundation) introduced under Polish law in May 2023, and the classical holding company built through a Polish or foreign parent entity. Each path carries distinct tax treatment, governance constraints, and succession mechanics. Choosing the wrong one – or delaying the choice – forfeits advantages that cannot be recovered retroactively.

The Polish family foundation offers a 15% flat tax on distributions to beneficiaries and zero corporate income tax on passive income retained inside the foundation. A holding company structured under Polish corporate legislation benefits from a participation exemption on dividends and capital gains, provided ownership thresholds of at least 10% are held for a minimum of two years. Neither structure suits every ownership profile, and the decision turns on three variables: the nature of business income, the number of beneficiaries, and the planned exit timeline.

This alert covers what changed when the family foundation framework became operational, which ownership profiles are affected by the threshold rules, and what immediate steps owners should take before year-end 2026 to preserve their options.

What shifted in Polish succession and tax planning after May 2023?

The fundacja rodzinna framework, governed by the Family Foundation Act, created a genuinely new asset-holding vehicle in Polish law. Before May 2023, Polish owners had no domestic equivalent to the German Familienstiftung or Liechtenstein foundation. The National Court Register (KRS) opened a dedicated register for family foundations, and the Polish Financial Supervision Authority (KNF) clarified that foundations holding financial instruments remain subject to standard market-conduct rules. The Ministry of Finance confirmed that the foundation's internal accumulation of dividends, interest, and rental income is exempt from corporate income tax – a structural shift from the prior regime.

The holding company route also changed. Polish tax law tightened the participation exemption conditions: the 10% ownership threshold must be maintained for an uninterrupted 24-month period, and the subsidiary must not be a shell entity under controlled foreign corporation (CFC) rules. Transfer pricing documentation obligations apply to intra-group transactions above PLN 10m for goods and PLN 2m for services. These thresholds catch most mid-market groups immediately.

The practical consequence is that owners who previously relied on informal dividend cascades now face a binary decision. Restructuring after an exit event – a share sale, for instance – triggers recapture provisions. Acting before the exit preserves the exemption. Delay precludes the most favourable treatment permanently.

  • Family Foundation Act in force since May 2023
  • KRS dedicated register operational from the same date
  • Participation exemption: 10% stake held for 24 months minimum
  • Transfer pricing thresholds: PLN 10m (goods), PLN 2m (services)
  • CFC rules exclude shell subsidiaries from exemption eligibility

For owners with cross-border operations, the interaction between Polish family foundation rules and foreign tax systems adds another layer. Our analysis of KSeF implications for Cyprus-based businesses illustrates how Polish digital reporting obligations follow the economic substance of transactions regardless of where the holding entity sits.

We obtained a favourable advance tax ruling for a manufacturing group in Mazowieckie (spring 2026), confirming that passive rental income channelled through a newly established family foundation qualified for the zero-CIT accumulation exemption. The ruling took approximately four months from submission to issuance.

Which ownership profiles are most affected – and by which thresholds?

The family foundation suits owners whose primary goal is succession and long-term asset preservation. Polish family foundation law limits active business income: if the foundation conducts operating activity beyond a defined permitted list – which includes holding shares, lending to beneficiaries, and leasing own assets – the excess income is taxed at 25% rather than the standard 15% distribution rate. This penalty rate applies immediately, with no grace period.

The holding company, by contrast, suits groups with active subsidiaries generating trading income. A Polish limited liability company (spółka z ograniczoną odpowiedzialnością, sp. z o.o.) or joint-stock company (spółka akcyjna, S.A.) used as a holding vehicle benefits from the participation exemption without the activity restrictions that apply to foundations. IP Box regimes – taxing qualifying intellectual property income at 5% – are accessible to operating subsidiaries within a holding structure but not to the foundation itself.

Three ownership profiles illustrate the decision matrix clearly. A family with passive assets – real estate, listed securities, minority stakes – and two generations of beneficiaries fits the foundation model. A founder with a single operating business planning an exit within five years fits the holding model, preserving the participation exemption on the eventual share sale. A mixed profile – operating business plus significant real-estate holdings – may require a hybrid: a holding company owned by a family foundation, with the foundation holding the parent and the operating subsidiaries sitting below it.

The hybrid structure introduces complexity. Transfer pricing rules apply between the foundation and its subsidiaries. The KSeF mandatory e-invoicing system, fully operational from February 2026 for all VAT taxpayers, applies to every entity in the chain that issues VAT invoices. Our guide on KSeF obligations in Poland sets out the compliance steps for each entity type.

We secured a structural opinion for a technology group in Lower Silesia (autumn 2025), concluding that placing the IP-holding subsidiary beneath a sp. z o.o. holding company – rather than inside a family foundation – preserved access to the 5% IP Box rate while keeping the parent's dividend receipts exempt under the participation exemption.

What should owners do before the end of 2026?

Three immediate actions carry hard deadlines. First, any owner considering a family foundation should file the founding act before completing a planned share disposal. Once the disposal closes, the asset leaves the owner's estate and cannot be contributed to the foundation tax-free. The contribution window closes permanently on completion of the transaction. Second, holding companies relying on the participation exemption must document the 24-month ownership period. If the clock has not started, starting it now means the exemption becomes available in early 2028 at the latest. Third, transfer pricing documentation for the 2025 fiscal year is due by the end of September 2026 for most taxpayers – missing this deadline triggers a surcharge of up to 10% of the understated tax base.

The AI Act's high-risk classification rules, which affect technology companies using automated decision-making in client-facing processes, add a governance consideration for foundations and holding companies alike. Our analysis of AI Act high-risk classification is relevant for groups whose subsidiaries deploy such systems.

Owners should prepare the following before engaging advisers for a restructuring:

  • Current ownership chart with percentage stakes and acquisition dates
  • List of all income streams: dividends, rent, royalties, trading income
  • Planned exit events and indicative timelines
  • Beneficiary list and intended distribution schedule

Specific situations require tailored analysis. A family foundation established without reviewing the permitted-activity list risks the 25% penalty rate on any income that falls outside it. A holding company assembled without checking CFC exposure risks losing the participation exemption entirely – an irreversible consequence once the tax year closes.

To receive an expert assessment of your ownership structure and the applicable thresholds, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a family foundation own 100% of an operating company in Poland?

A: Yes. Polish family foundation law permits the foundation to hold shares in operating companies. However, income generated by the operating subsidiary that flows up to the foundation as dividends is treated as passive income and accumulates tax-free inside the foundation. Active trading income earned directly by the foundation – rather than by a subsidiary – is subject to the 25% penalty rate if it falls outside the permitted-activity list. Structuring the operating layer correctly is therefore essential before the foundation is registered.

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

A: Registration with the National Court Register typically takes between four and eight weeks from submission of the founding act and supporting documents. The timeline assumes no objections from the KRS and complete documentation at the time of filing. Preparing the founding act, internal statute, and beneficiary schedule – and obtaining any required tax rulings – adds two to three months of preparatory work before the filing itself.

Q: Is the participation exemption available to a family foundation that owns shares in a subsidiary?

A: The participation exemption under Polish corporate income tax law applies to entities that are corporate income tax payers holding at least a 10% stake for 24 uninterrupted months. A family foundation is a corporate income tax payer for purposes of its taxable income, but dividends received by the foundation from Polish subsidiaries are generally exempt under the zero-CIT accumulation rule rather than the standard participation exemption. The practical result is similar, but the legal basis differs – and the conditions for losing the exemption also differ. A tax adviser should confirm which regime applies to each income stream before the structure is finalised.

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 establishment, 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.