An Alternative Investment Company (ASI – Alternatywna Spółka Inwestycyjna) is an attractive option for investors seeking tax advantages. ASI is a form of alternative investment fund and may operate as a limited liability company, joint-stock company, limited partnership, or limited joint-stock partnership. One of its greatest advantages is the potential exemption from corporate income tax (CIT) on profits from the sale of shares or equity interests.
Tax Exemption for ASI
Private investors selling shares or equity interests are currently subject to a 23% income tax, while capital investors pay 19%. Additionally, private investors must pay a 4% solidarity levy on income exceeding PLN 1 million. ASI offers a solution for investors seeking to avoid these tax burdens.
The key benefit of ASI is the ability to claim a CIT exemption on income from the sale of shares or equity interests, including transfers made as in-kind contributions to another entity. To qualify for this exemption, the ASI must hold at least 5% of the shares or equity interests in the target company for an uninterrupted period of two years.
Additional Tax Benefits
ASI offers other tax advantages as well. As a financial enterprise, it is not subject to thin capitalization rules that limit the deductibility of interest expenses. This means ASI can fully deduct interest costs without restriction. However, the tax exemption does not apply to income from the sale of shares or equity interests in so-called real estate companies.
If the ASI operates as a corporate entity, dividends paid to individual shareholders are taxed at a flat 19% personal income tax (PIT) rate. These dividends are not included in the base for calculating the solidarity levy.
ASI Management
Alternative Investment Companies do not require complex management structures. However, reporting obligations to regulatory bodies such as the Polish Financial Supervision Authority (KNF – Komisja Nadzoru Finansowego) may pose challenges for management. For this reason, many ASIs engage legal and tax experts to ensure compliance with regulatory and legal requirements.
Regulatory Obligations
KNF is the government authority responsible for overseeing Poland’s financial market. Regulatory requirements—including periodic and ad hoc reporting, financial statements, and other disclosures—are mandatory for ASIs. In addition, ASIs must comply with tax regulations and other legal provisions. These obligations often require specialized legal and tax knowledge beyond the scope of the company’s internal management.
As a result, more ASIs are turning to professional advisors who assist with reporting and compliance. Legal and tax experts can support the preparation of documentation and financial reports, and help interpret regulatory provisions. This guidance enables ASIs to operate confidently and avoid legal or financial penalties.
Summary
In summary, an Alternative Investment Company can be a compelling investment vehicle for those seeking to benefit from tax exemptions on income from the sale of shares or equity interests. However, ASIs may carry more risk than traditional investment funds. Before investing, it is essential to carefully assess the risks and consult with qualified experts.Destrier offers comprehensive advisory services and process support for ASIs. Contact us today to schedule a consultation.
