The family foundation as a modern legal form is gaining increasing recognition in Poland. Created to effectively manage and protect family assets, the Law on Family Foundation was introduced on January 26, 2023 as a form of business.
The purpose of its enactment was to allow entrepreneurs to keep corporate assets in the family. The capital accumulated over the years is to remain protected and serve future generations.
A family foundation can be established in two ways:
- The founder, i.e. the person establishing the foundation, donates his or her assets to it, the minimum value of which is PLN 100,000.
- A family foundation can be established in the form of a deed during the founder's life or in a will.
The founder may be a beneficiary of the family foundation at the same time.
A family foundation is established either at the time of the establishment deed or after the promulgation of the founder's will. It acquires legal personality only after it is entered in the Register of Family Foundations.
Every family foundation must have a statute that defines its most important goals, mission and rules of operation of its bodies. The content of the statute is determined by the founder, and according to the Law on Family Foundations, this document must be drawn up in the form of a notarial deed.
The beneficiary of the foundation can be natural persons, including minors or completely incapacitated persons. The beneficiary does not have to be related to the founder. In addition to individuals, beneficiaries of a family foundation can also be public benefit organizations.
A family foundation is exempt from CIT, provided that its activities are aimed solely at preserving or multiplying family assets. The permitted activities are listed in detail in the law.
In addition, a family foundation pays income tax at 15% in the situations indicated in the law:
- when it transfers certain benefits - cash, property or rights - to beneficiaries or the founder;
- when it transfers property to the foundation after its liquidation;
- when it pays benefits in the form of hidden profits.
On the other hand, higher CIT is paid by those family foundations that have active business activities. In such cases, the rate is as high as 25%.
Establishing a family foundation is a good and effective way to carry out a succession of assets or avoid family disputes over a retainer. This is because assets contributed to the foundation after 10 years before the opening of the inheritance are not part of the estate.
A family foundation can become an effective instrument for securing the interests of family members and even those outside this circle.