Private Family Foundations in Poland

From 22 May 2023, it is possible to establish private family foundations in Poland.

The new legal form is of particular interest to:

  • family business owners,
  • those planning to pass on investment assets to the next generation.

Given the tax exemption, the private family foundation in Poland may also prove to be an attractive investment vehicle. Contrary to its name, a family foundation is not just for families. Any individual can be a beneficiary of the foundation.

Features of a Polish family foundation

The Polish family foundation has much in common with its foreign counterparts:

Firstly, a family foundation can allow the founder to retain control of the assets while being prepared to hand over the management of these assets to successors. Moreover, with a foundation you can transfer control of the assets and not necessarily the assets themselves. You can separate the group of people who will benefit from the accumulated wealth from the narrower group that manages that wealth.

Secondly, the foundation can serve as a dosage mechanism for how much and how individual beneficiaries benefit from the foundation’s assets.

Thirdly, the foundation offers tax exemption.

A family foundation, while attractive, is not a tool for everyone. In some cases, it can prove to be a costly trap. In an extremely unfavourable scenario, its operation can consume a significant portion of the accumulated wealth. However, the foundation is not the only succession planning tool. There have been and will continue to be other instruments available for securing family wealth, investing it and passing it on to the next generation. Find out the details of the Polish family foundation and whether it will work for you.

Private family foundation in Poland – a vehicle for managing assets in the interests of beneficiaries

A family foundation is established by an individual, known as the founder. The founder may contribute assets independently or jointly with other individuals. These assets can be e.g. real estate, money, shares in a company (for example, in a family business). The contribution of assets to the foundation is tax-free.

A foundation is established with beneficiaries in mind. The beneficiaries are designated by the founder. He or she sets the rules for keeping a list of beneficiaries. The beneficiary of the foundation can be any natural person, not only a family member. The founder himself can also become one.

The foundation may transfer specific assets to the beneficiary, but may also limit itself to providing the beneficiary with the use of those assets, without transferring ownership. The foundation may also pay the beneficiary’s living or educational expenses. The founder may make the beneficiary’s entitlement to the benefit subject to a condition (for example, related to the beneficiary’s education or performance). Entitlement may also depend on the arrival of a time limit, for example, on the completion of a certain age. Interestingly, in the case of a minor beneficiary, the funder may stipulate that the items accruing to the beneficiary will not be administered by the parents, but only by a guardian appointed by the court.

Daily operation of a private family foundation in Poland

Every Polish family foundation will have at least:

  • a board of directors,
  • an assembly of beneficiaries.

The supervisory board is optional.

Board of a Polish private family foundation

The management board will consist of at least one natural person. The foundation’s board, as in companies, will manage the foundation’s affairs and represent it externally, for example when signing contracts.

The foundation does not have an owner. There is no shareholders’ assembly in a foundation. Instead, the foundation has its beneficiaries. The selected beneficiaries form a beneficiaries’ assembly.

Supervisory board of a Polish family foundation

As indicated above, the founder may appoint a supervisory board of the foundation. It should be composed of a minimum of one natural person. The supervisory board has a superior function over the board of directors. The founder may, for example, stipulate that the board will have to obtain the approval of the supervisory board to carry out certain activities.

Assembly of beneficiaries of the Polish family foundation

As indicated, the selected beneficiaries form an assembly of beneficiaries. This means that you can only elect certain beneficiaries to participate in the assembly. The others will have no influence on the resolutions to be adopted. They will only have the right to use the foundation’s assets to the extent indicated by you.

Examples of matters on which the beneficiaries’ assembly passes resolutions are the approval of the financial statements or the discharge of the members of the foundation’s bodies. They may also be other matters provided for by the founder in the statutes, such as the appointment of members of the foundation’s supervisory board.

Audit of a family foundation in Poland. Audit report

Each Polish family foundation will be audited once every four years by a team of auditors. It will be composed of an independent auditor, tax advisor, lawyer or legal advisor. The result of the audit will be a report on, among other things, whether the foundation manages its assets properly.

How to set up a family foundation in Poland

The proper wording of the foundation’s statutes is crucial to ensure that the transfer of control over the foundation’s assets and the management of those assets actually takes place in the way the founder wishes. In our experience, in most cases the scenario for a Polish family foundation will involve two stages:

  • the ‘during the founder’s lifetime’ stage and the
  • the ‘after his/her death’ stage.

The founder may accumulate most of the rights concerning the foundation. After his/her death, these rights will be vested in the beneficiary assembly or the supervisory board – according to the rules he/she will establish.

A family foundation in Poland and taxes

As indicated, the endowment of the foundation with assets is tax-free. What is more, a Polish family foundation is tax exempt. This means that the current income of the foundation is not taxed. However, the tax exemption has its limits. These are determined by the scope of the foundation’s permitted activities.

The foundation may carry out business activities in the field of, among other things:

  • the disposal of property (insofar as this property has not been acquired solely for the purpose of resale),
  • rental, lease
  • participation in companies.

The Foundation may also engage in lending to its companies. In this respect, it will not pay tax on the interest.

When is tax paid in a family foundation from Poland?

As already stated – as a general rule, no tax is paid in a foundation. When, therefore, can tax occur?

The first case in which tax may have to be paid is when the foundation receives income outside the catalogue of permitted activities. Such income will be taxed at a rate of 25%. The 25% tax rate is particularly worth bearing in mind if you plan to have the family foundation resell assets. In some cases, the foundation will pay tax at a rate of 19% instead of 25%.

The second case in which tax will have to be paid is when a benefit is paid to a beneficiary. In this case, the corporate income tax is 15% of the value of this benefit. It is paid by the foundation.

The third and final case in which tax may arise is the receipt of a benefit from the foundation by a person who is not a member of the founder’s family (from the so-called ‘zero group’). Such a person should pay personal income tax at the rate of 10 per cent (family outside the ‘zero group’) or 15 per cent (non-family member). This tax is independent of the 15 per cent tax paid by the foundation.

Are solidarity levy, health contribution and social security paid on the family foundation?

Payments from the foundation do not involve the payment of solidarity levy, health contribution or social security contributions.

Some Polish foundations are tax-free, others taxed three times?

As you can see, if income is earned outside the scope of the foundation’s permitted activities and then paid out by the foundation to a person who is not a member of the founder’s family, a threefold, highly unfavourable taxation will occur. Fortunately, in the event that the Polish family foundation is used fully for its intended purpose, the tax will amount to a maximum of 15 per cent.

In the case of foundations that will serve as family investment vehicles, the effective taxation will be very low, often close to zero in fact. Taxation will be only 15 per cent on the presumably small value of benefits made occasionally to family members. Indeed, there is no obligation on the foundation to pay out the majority of its income to beneficiaries on a regular basis.


As you can see from the examples above, a Polish family foundation can prove to be a very beneficial solution. It is worth knowing the ins and outs of how family foundations work to see if the advantages a family foundation offers are worthwhile in your case.

How do you set up a Polish family foundation?

A foundation is created by filing a ‘declaration of establishment of a family foundation’ in the form of a notarial deed. You can also create a foundation in your will, although it seems that the ordering of succession matters should take place as much as possible while you are still alive.

The foundation’s initial fund should be at least PLN 100,000. It does not have to be covered solely by cash.

The key documents of a family foundation are:

  • statutes,
  • the list of beneficiaries.

The most important activity when establishing a family foundation in Poland

In our opinion, the most important activity in setting up a family foundation is the proper planning of the new structure. The key to a good plan is not only knowledge of business structuring, but above all excellent knowledge of the client’s situation and possible future scenarios.

Members of our team have been involved in business structuring for many years. We use both Polish and foreign instruments for this purpose. We have extensive experience of the operation of family foundations in Western European countries. We will translate these into the new institution of the Polish family foundation.

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