After more than three decades of free market economy in Poland, intergenerational succession of assets has become an important challenge for many families and companies. 

Until now, Polish entrepreneurs were forced to deal with Polish legal provisions which were inadequate from the perspective of their succession plans. 

Alternatively, they could choose to use family foundations based on foreign law. Now, however, new Polish legislation will also allow them to benefit from a Polish family foundation.

Family foundation – succession planning

Succession planning is a much broader process than merely choosing the appropriate legal vehicle, such as a family foundation.

SSW’s lawyers and tax advisors, together with experts from our Family Office and SSW Accounting, support clients at all stages of generational business change.

More information can be found here: Succession Planning, Family Office.


Polish vs. foreign family foundations

Although the new Polish law on family foundations introduces many improvements on the previous situation, it may not suit all entrepreneurs.

In such cases, it is worth considering using a foreign family foundation for succession purposes.

Our experts have already helped clients to establish family foundations in numerous jurisdictions, including Liechtenstein, Austria, Singapore and Malta.


How do Polish family foundations work?

The Polish law concept of a family foundation is based on the assumption that business and family are formally separated from each other.

Family assets become the property of the foundation, which manages those assets for the benefit of the beneficiaries and protects them from any adverse consequences of succession processes, especially if not all family members are interested in continuing the business.

A family foundation is created on the basis of assets belonging to the founder(s), including shares. Such property must be valued at least PLN 100,000.

The founder has a wide discretion in establishing the rules governing the foundation’s management, operations and purposes.


The tasks and benefits of a family foundation

The functions of a family foundation are primarily:

  • to collect and manage assets donated by the founder or others; and
  • to provide resources to beneficiaries who may be, for example, the founder or his/her family members.

Importantly, a family foundation may make the transfer of resources to beneficiaries conditional upon the occurrence of an event (e.g. graduating studies) or a time limit (e.g. once the beneficiaries reach a certain age).

Family foundations – the benefits:

  • enables certain economic activities to be carried out;
  • income generated by the foundation is exempt from income tax;
  • subject to CIT tax at a rate of 15% only if income is distributed or if the foundation is liquidated;
  • exempt from PIT, inheritance and donation tax when distributions are made to the founder or his/her immediate family (the so-called ‘zero group’).



How can I establish a Polish family foundation?

Establishing a family foundation involves a five-step procedure:

  • the founder submits a declaration of his/her desire to establish the foundation, before a notary public or in his/her will;
  • the foundation’s rules are defined in its articles of association;
  • assets are transferred to the foundation’s fund;
  • the foundation’s bodies are created;
  • the foundation is registered in the court register of family foundations.


Who can become a founder or a beneficiary?

Any natural person with full legal capacity can be a founder. It is possible for several founders to exist, unless the foundation was created in a will, in which case there can obviously only be one founder.

A beneficiary can be any natural person, regardless of their age or legal capacity. They may also be non-governmental organisations which conduct public benefit activities.

The income and assets of a family foundation can be used to finance, for example, the costs of maintenance, education or medical treatment of beneficiaries or expenses for a public benefit NGO’s charitable activities.



Business activity of a Polish family foundation

A Polish family foundation may carry out business activities to the following extent:

Polish family foundations can carry out the following business activities:

  • disposing of assets – unless such assets were acquired solely with the aim of further disposal;
  • renting, leasing or making available its assets on another basis;
  • joining and participating in commercial companies, investment funds and cooperatives;
  • acquiring and disposing of securities, derivatives and similar rights;
  • granting loans to the foundation’s beneficiaries and other persons or organisations affiliated with the foundation;
  • trading in foreign payment methods (including foreign currencies) belonging to the foundation when making payments related to its activities;
  • operating an agricultural business.


Taxes in a Polish family foundation

It is tax-free to establish a foundation and transfer assets to it.

The business activities of foundations are CIT-exempt, so they do not pay income tax (e.g. on dividends or other capital gains received from companies in which the foundation owns shares, or when selling or redeeming such shares). One exception is that a 25% CIT rate applies to any income derived from business activities which are a foundation’s statutory permissible scope of activities. Also worth remembering is that the CIT exemption does not apply to income from the lease or rental of an enterprise, an organised part of an enterprise or assets used to carry out activities by the beneficiary, founder or related entities, which is subject to 19% CIT.

With certain exceptions, a foundation’s CIT liabilities are generally payable when it makes payments to beneficiaries (or if it is liquidated). In this case, foundations are obliged to pay 15% CIT.

The founder and any beneficiaries from his/her immediate family (the so-called ‘zero group’) are exempted from PIT on any benefits they receive from the foundation. Other beneficiaries will be required to pay PIT at a rate of 10% (those in tax groups I or II) or 15% (others).

Significantly, contrary to what was originally envisaged, the legislation made it possible for shareholders of companies taxed with a lump sum on corporate income (the so-called Estonian CIT) to establish family foundations or to have the status of a beneficiary of such a foundation.

Important changes (compared to the original wording of the Family Foundation Act) also include the introduction of a category of hidden profits, the payment of which from a family foundation will incur a 15% CIT (as in the case of the payment of benefits to the founder or beneficiaries). The legislator has therefore decided to apply a concept similar to that already known from the Estonian CIT rules.

Also worth noting is the exclusion of loans granted by a family foundation from the CIT debt financing cost limit (thin capitalisation rules) – which is another change that the legislator decided to introduce already after the enactment of the Family Foundation Act (but with effect from the date of entry into force of the Family Foundation Act itself).

It can therefore be expected that the provisions on the Polish family foundation will continue to evolve. We invite you to follow the news on the SSW website and to contact our tax advisors and lawyers.

SSW’s support regarding succession issues and family foundations

SSW’s support regarding succession issues and family foundations

At SSW, succession planning and implementation is handled by both our lawyers, tax advisors and experts from our Family Office and SSW Accounting.

For more information, please click here: Succession Planning, Family Office.

We can help with Polish family foundations by:

analysing your estate succession needs

analysing your property and family situation and selecting the appropriate legal tools to implement your succession needs

developing a comprehensive plan for the family foundation’s operations, including how it manages its assets and grants benefits to beneficiaries, including any applicable pre-conditions for granting such benefits

developing mechanisms to ensure that the founder or his/her chosen delegates have effective control over foundation’s activities and its assets

establishing the corporate governance rules which will apply to the foundation (i.e. defining the foundation’s organs and the scope of their powers)

preparing the foundation’s articles of association and supporting documentation (e.g. list of beneficiaries)

ensuring that the foundation is properly registered

providing legal and tax support when assets are transferred to the foundation

providing ongoing support regarding the foundation’s operations

Contact us

Tomasz Wickel

Tomasz Wickel



Patrycja Goździowska

Patrycja Goździowska



Rafał Mierkiewicz

Rafał Mierkiewicz

Senior Associate


Grzegorz Koguciuk

Grzegorz Koguciuk