Establishing a family foundation in Poland primarily allows for the effective protection of family wealth against fragmentation and ensures a smooth business succession process. It operates as a legal entity that separates the founder’s private assets from the risks associated with running a business (the foundation is not liable for the founder’s personal obligations).
The main benefits of this solution include:
- Ensuring business continuity: A family business can operate uninterrupted across generations, without the need to split shares among conflicted or unprepared heirs.
- Flexible payouts (benefits): The founder specifies in the statute who receives funds, how much, and under what conditions (e.g., for maintenance, education, or healthcare).
- Attractive taxation: The family foundation benefits from deferred corporate income tax (CIT) – income from permitted activities (e.g., dividends, rental income, interest) is exempt from tax as long as it remains within the foundation to fund growth. A 15% CIT is only paid when benefits are distributed to beneficiaries.
- No PIT for immediate family: Payouts to beneficiaries belonging to the so-called ‘zero tax group’ (e.g., children, spouse, grandchildren) are entirely exempt from personal income tax (PIT).
- Minimizing forced-share (zachowek) risks: The regulations facilitate strategic planning and reduce the risk that forced-share claims could lead to bankruptcy or the forced liquidation of the business.