Imagine a legal structure that protects your assets from unexpected life challenges – from family disputes to economic crises – while ensuring smooth succession across generations. Since 2023, the family foundation in Poland has changed the way families handle their legacy. This new tool has become a popular choice for entrepreneurs and private individuals. By 2025, more than 2500 such foundations have been registered, with the youngest founder at 20 years old and the oldest at 88. Let's explore the world of family foundations, where asset protection meets tax benefits, and business succession becomes easier than ever.
What is a Family Foundation?
A family foundation is a separate legal entity designed to collect, protect, and grow family assets for chosen beneficiaries. Unlike traditional charitable foundations, it focuses on private goals, such as business succession and providing financial stability for descendants. It works like an "intergenerational safe" – the founder contributes assets (such as shares, real estate, or cash), and beneficiaries (usually family members) receive benefits based on set rules. Surprisingly, the foundation can be everlasting unless the founder decides otherwise, making it a perfect tool for family business dynasties.
How to set up a Family Foundation?
The process to set up a family foundation requires a notarial declaration from the founder, creating a statute, contributing the founding fund (minimum 25,000 EUR), listing assets, and registering the foundation in court.
What are the benefits of a Family Foundation?
This is where the family foundation shows its strengths. Entrepreneurs value it for its unique features.
- Asset Protection: Assets in the foundation are separated from the founder's personal wealth, protecting them from creditors, divorce cases, or seizures (except for child support obligations). A surprising feature: after 10 years from setup, claims for inheritance shares can be limited, making succession easier. It offers strong protection against crises for family businesses and assets.
- Tax Advantages: The foundation does not pay CIT on income (like dividends, interest, or rents) until it distributes them to beneficiaries. Then, a 15% CIT rate applies, and for close relatives (spouse, children, parents) – no PIT, health fees, or social security contributions. This allows reinvesting profits without taxes – similar to the Estonian CIT model, but in a better and more useful form.
- Easier Succession: The founder clearly sets the rules for distributing benefits, reducing inheritance conflicts and ensuring business continuity. The foundation can support education, healthcare, or other beneficiary needs.
- Investment Flexibility: The foundation's portfolio mainly includes shares (over 50%), bonds (25%), and real estate. It can run limited business activities, like renting or trading securities, which helps grow capital. Some foundations also invest in alternative assets, such as artworks or venture capital funds.
Reports from 2025 show that family foundations help family financial stability and charity work, while cutting down on possible disputes.
Interesting facts about Family Foundations
- Growth in Numbers: By 2025, over 2200 foundations have been registered, with 1389 more in process. On average, a foundation has 3.3 beneficiaries, but the record is 19. In the first days after the law was passed, 61 applications were filed.
- Founder Profile: 75% are men, with an average age of 51. Foundations are set up by both young people (youngest at 20) and seniors. Beneficiaries are mostly aged 36–55, and children often get benefits when they become adults.
- Legal and Future Context: The rules stay stable, with no adverse effects on the state budget. Foundations fit European trends (similar to structures in Liechtenstein or Malta), with a public register but limited access to details. Audits every four years ensure openness and transparency..
- International Aspect: The Polish family foundation is open to foreigners, which broadens its use in global wealth planning.
Does a Family Foundation run business activities?
Yes, but in a limited way. A family foundation is not meant for full business operations like a company – its main role is asset protection and management. However, according to the Family Foundation Act, it can run business activities only within a fixed list. This means activities outside the list are not forbidden, but they lead to tax issues: including income from "not allowed" activities being taxed at 25% CIT, making them less viable.
The allowed list includes passive activities that support asset protection and growth, such as selling property (provided that this is not bought just to resell), renting or leasing property, joining companies, investment funds, cooperatives or similar entities (in Poland or abroad) and taking part in them, buying and selling securities, derivatives and similar rights, giving loans to capital companies (where the foundation has shares), personal companies (where it is a partner) or beneficiaries, trading foreign currencies owned by the foundation for payments related to its work.
The foundation cannot do direct trading, services, or production outside this list – for example, it cannot sell goods bought just to resell them for profit, or run stores or factories. If it goes beyond limits, it risks not only higher tax but possibly losing tax breaks on other income.
Summary
In summary, the family foundation is an effective and appealing tool for protecting assets across generations – it helps both Polish entrepreneurs and foreigners secure their assets and easily pass on their legacy in Poland's business environment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
