Since May 2023, Polish entrepreneurs have had access to a modern legal tool for managing assets and succession in family businesses – the family foundation. Although this solution is relatively new in Poland, it has quickly gained popularity due to the benefits it offers in terms of capital protection and ensuring continuity of management.
A new legal framework for family businesses
The introduction of family foundation regulations was a response to the long-standing expectations of family business owners who were seeking mechanisms to ensure the longevity of their businesses beyond one generation. In Western Europe, such foundations have been successfully used for decades and are a key element of long-term estate planning. The Polish Family Foundation Act now makes it easier to implement these practices domestically.
Family businesses are often marked by a strong emotional attachment of owners to their companies and a willingness to invest in their future. However, these same bonds can lead to emotionally difficult situations during the transfer of leadership or assets to the next generation. The family foundation brings necessary structure, legal clarity, and security to these processes.
Protecting assets from fragmentation and risk
One of the most important advantages of a family foundation is the protection of assets from both legal and economic risks. Transferring assets to the foundation means formally separating them from the founder’s personal property, shielding them from creditors’ claims or the consequences of potential family conflicts.
This legal structure also prevents the fragmentation of assets due to inheritance or family divisions. As a result, it is possible to maintain the integrity of the business and concentrate management within a single entity that has no owners or shareholders but operates in accordance with the goals defined by the founder.
Tax advantages and effective income management
Family foundations also offer significant tax benefits. Transferring assets into the foundation is not subject to taxation, and distributions to the founder and their closest family members are exempt from personal income tax. Furthermore, the foundation’s activity – within a defined scope – benefits from a corporate income tax exemption until the point of distribution, which is then taxed at a preferential 15% rate.
Thanks to these solutions, the family foundation becomes an efficient tax planning tool, reducing operating costs and enabling optimal long-term financial management.
Orderly and predictable succession
One of the key challenges for family businesses is succession. Transferring control and assets to the next generation is often a time of risk and uncertainty, especially in the absence of clear rules. The family foundation allows for the creation of a transparent succession structure – defining who will manage the assets, under what conditions, and to what extent.
This model not only helps eliminate potential family disputes but also allows the company to continue operating in line with the founder’s vision, even after they step back from day-to-day business activities. At the same time, the foundation can provide benefits to the beneficiaries, offering them financial security without requiring their involvement in company management.
Growing popularity – the numbers speak for themselves
Although the family foundation has only recently been introduced in Poland, it is already seeing considerable interest. The number of registered foundations has exceeded one thousand, and new applications continue to be submitted at a rapid pace. This reflects entrepreneurs’ growing awareness of the potential this tool offers in building stable and resilient ownership structures.
The family foundation is currently one of the most effective legal solutions available to owners of family businesses who are thinking about the future of their enterprises across generations. It allows not only for asset protection but also for thoughtful succession, tax optimization, and shielding the business from uncontrolled fragmentation. In the context of the Polish economy—where more and more companies are reaching the point of generational transition—family foundations can become the foundation for continued development and long-term stability.