Family Foundation

The Family Foundation Act of 26 January 2023 (hereinafter: Act), comes into force on 22 May 2023. Why is this new institution important for Polish entrepreneurs?
What is a family foundation and what are the practical aspects of its establishment and operation? I will discuss all this in a series of articles that will appear in the near future.

Below, I explain what purpose the new institution of the family foundation is intended to serve and who it might be of interest to.

  • In the current state of the law, doyens of family businesses have limited options to pass the business on to their successors while maintaining the family character of the business. Business owners often choose to make a donation or to bequeath their business to a chosen person or persons. Such solutions, however, result in entrepreneurs losing influence over the future of their business and its assets.
  • The Family Foundation Act is a response to the demands made by the family business community for the introduction into the Polish legal order of an institution facilitating multi-generational succession.
  • The family foundation aims to accumulate family assets, minimise the risk of unsuccessful succession and guarantee the going concern of the business. The transfer of assets to a family foundation is intended to protect the assets from division and fragmentation, which very often occurs as a result of a distribution made by the entrepreneur’s successors.
  • The primary task of the established family foundation will be to implement the objectives defined by the founder, against the assets donated by the founder.
  • The family foundation will safeguard the interests of the founder’s designated beneficiaries by fulfilling certain benefits for them.
  • Assets contributed to a family foundation will not be inherited by the founder(s).

Therefore, if you are planning the succession of a family business, if you like to maintain the indissolubility of your assets, if you wish to maintain the stability of your business in accordance with the will of the business founder, if you are looking for an institution that allows you to reconcile your business interests and your private interests – the institution of a family foundation may be an interesting solution for you.

The basic details of the family foundation are as follows:

  • What form will the family foundation take?

The family foundation will be a non-shareholding legal entity based in he Republic of Poland.

  • Who can be a funder?

The funder will only be able to be an individual with full legal capacity, who will donate assets to the family foundation – either all or part, depending on the founder’s wishes.

  • How many people does it take to set up a family foundation?

A single individual is sufficient. As a general rule, a family foundation can also be established by several individuals (an exception applies to a family foundation established in a will).

NOTE: they do not have to be relatives.

  • What are the foundation’s minimum assets?

The assets of the family foundation created as a result of the founder’s endowment will constitute an endowment fund, the value of which should not be less than PLN 100,000, both at the time of the establishment of the family foundation and thereafter during its operation.

  • Who can become a beneficiary of a family foundation?

An individual or a non-governmental organisation carrying out public benefit activities. The beneficiary will also be able to be a funder.

  • Does the beneficiary have to be related to the funder?

The law does not provide for a relationship requirement between the funder and the beneficiary.

  • Will a family foundation be able to run a business?

Yes, but only to the extent stipulated in the Act.

In the next parts of the ABCs of a Family Foundation, which will be published shortly, we will explain step by step the process of setting up a family foundation and how it works.

Ewa Lejman-Widz

Attorney at Law, tax adviser


Ewa Lejman

Partner, Attorney at Law, Tax Advisor

Ewa Lejman