A Family Foundation: Your intergenerational treasury and our guide to secure succession

23 December 2025 | Knowledge, News, The Right Focus

Every family business will eventually face the challenge of passing on the business to the next generation while ensuring that the accumulated wealth is not fragmented, sold or squandered. The solution to this problem is a family foundation. From May 2023, this solution has enabled Polish entrepreneurs to establish ‘family treasuries’ modelled on those in the West.

We explore how to plan the future of both your family and your business wisely.

Succession is about more than just transferring power

A family foundation is not just an investment vehicle; most importantly, it is a guardian of value and business continuity. It enables you to separate your personal assets from those of your business and protect them from economic risk and creditor claims (although certain exceptions apply, such as maintenance payments or debts incurred before the foundation was established).

Why consider setting up a foundation?

Protection against fragmentation: assets are not subject to standard estate divisions but remain under the control of the foundation, which manages them in accordance with the founder’s wishes
Elimination of conflicts: the foundation protects the business from decision-making paralysis in the event of a dispute between heirs
Protection against ‘black sheep’: the structure of the foundation enables you to limit the influence of family members who are not prepared to manage the business or could act to its detriment, while still providing them with financial support

You can read more here.

Legal matters. How does a family foundation work?

A family foundation is a legal entity based in Poland. The Articles of Association form its core, and the assets contributed by the founder (a minimum of PLN 100,000 in founding capital) fuel it.

Key foundation bodies:

Executive Committee: conducts the foundation’s day-to-day affairs and represents it. Its members may include founders, trusted family members or professional managers
Supervisory Board: performs a supervisory function. Mandatory when the number of beneficiaries exceeds 25
Beneficiaries’ Meeting: an advisory and approving body (e.g. of financial statements), composed of persons specified in the Articles of Association

Important note: The registration process at the court in Piotrków Trybunalski can currently take over a year. However, a ‘foundation in organisation’ can begin operating and managing assets almost immediately after visiting a notary public.

Find out more about setting up a family foundation here.

Taxes: benefits and pitfalls

A family foundation offers a taxation model similar to the Estonian CIT, but it requires some vigilance.

What is the current tax treatment?

Reinvestment: foundations do not pay CIT on current income from permitted activities (e.g. rental income, dividends and interest)
Payments to beneficiaries: foundations pay 15% CIT on benefit payments
PIT on payments to beneficiaries: the immediate family (the so-called ‘zero’ group, comprising parents, spouses, children and grandchildren) is exempt from PIT. The extended family pays 10%, and those outside of the family pay 15%

You can find out more about the tax benefits of a family foundation here.

Beware of ‘hidden profits’

The tax authorities pursue cases where profits are paid out ‘under the table’. If a foundation pays an inflated salary to a beneficiary, buys services from them or lends them money, this may be taxed at a punitive rate of 15% CIT as hidden profit, subject to additional conditions. The list of such events is continually being tightened by courts and tax rulings.

You can read more about hidden profits here.

Designing the structure – tailor-made

The Articles of Association are the most important document of the foundation. Here, the founder specifies who will receive money and on what terms. The law allows for considerable flexibility in this respect.

What can be included in the Articles of Association?

Conditional payments: Money paid out upon graduation, on reaching a certain age, or in the event of illness
Circle of beneficiaries: These can be individuals (e.g. family members or partners) or public benefit organisations
Monitoring mechanisms: You can appoint a Supervisory Board to keep an eye on the Executive Committee, or provide the Beneficiaries’ Meeting with the necessary tools for monitoring
Education: The foundation can finance the development of successors’ competencies, preparing them to take over

Thanks to a well-thought-out structure, you can avoid decision-making paralysis and ensure that the company continues to pursue your vision even after you are gone.

Read more about the structure of a family foundation here.

The contribution of assets – an operation on a living organism

Transferring assets (contributions) to a foundation requires the precision of a surgeon and the support of a notary and a tax adviser.

What do you need to remember?

Form: most often, it is a gift. Contributions of real estate require a notarial deed and contributions of shares in companies require notarised signatures
No right of return: generally, the founder cannot withdraw the assets contributed to cover the founding fund
Economics, not just taxes: the contribution of assets must be economically justified. Artificial structures created solely for tax optimisation purposes may be challenged under the anti-circumvention clause
Proportion of assets: if a foundation is set up by several people (e.g. unrelated), the structure of the contributed assets will affect the tax treatment of subsequent payments to beneficiaries

You can find more information on transferring assets to a foundation here.

Summary
A family foundation is a powerful tool for those who think long-term, allowing you to safeguard your possessions and provide your family with peace of mind. However, to take full advantage of the opportunities offered by this new element of our legal system, you should seek expert advice and have an audit conducted before setting up the foundation and contributing assets to it.

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Contact us:

Mirosław Malczeski

Attorney-at-law / Counsel / Tax Law

+48 608 593 450

m.malczeski@kochanski.pl