Polish President Andrzej Duda has signed the Family Foundation Act, introducing a new legal instrument into the Polish legal system. The Act enables the preservation of family business ownership across generations and supports the retention of capital within the country.

Legislative Path

The Family Foundation Act was adopted by Parliament in December of the previous year, following the submission of several dozen amendments by the upper chamber, most of which clarified the wording of the legislation. The new provisions are intended to help family businesses operate after the owner’s death or retirement and to provide favorable inheritance rules. On January 12, the Act was passed and forwarded to the President for signature.

Amendments Accepted by Parliament

The signed Act includes a provision requiring the government to evaluate its effectiveness three years after it enters into force. One accepted amendment concerns the dissolution of a family foundation, clarifying that this sanction should result from the founder or management’s failure to submit the required registration, rather than from the mere absence of entry in the official register.

During the parliamentary debate, Waldemar Buda, Minister of Economic Development, emphasized that the goal is to protect family assets and keep them consolidated in accordance with the founder’s wishes. He expressed confidence that the new framework would allow businesses to operate across multiple generations.

Reserved Share Barrier

Under the Act, family foundations are permitted to engage in seven types of business activities, including:

  • Disposal of assets owned by the foundation, provided they were not acquired solely for resale
  • Leasing, renting, or otherwise making assets available for use
  • Joining and participating in commercial companies, investment funds, cooperatives, and similar entities, both domestic and foreign
  • Acquisition and disposal of securities, derivatives, and similar rights
  • Granting loans to:
    • Capital companies in which the foundation holds shares
    • Partnerships in which the foundation is a partner
    • Beneficiaries of the foundation
  • Foreign currency transactions for payments related to the foundation’s operations
  • Operating a business within an agricultural holding

The Concept of a Family Foundation

Most businesses in Poland are family-owned. Under the previous legal framework, business owners had limited options for succession, typically transferring ownership to legal heirs. However, private interests of successors may not always align with the company’s long-term goals. Until now, Polish law lacked sufficient mechanisms to prevent fragmentation or ensure continuity when successors were unwilling to take over. This led to calls from entrepreneurs for a legal solution that would facilitate succession and reconcile conflicting interests. More on this topic can be found in the article Family Foundation – A New Institution in Polish Law.

How Destrier Supports Family Foundations

Destrier Law Firm offers comprehensive support in establishing and managing family foundations, including:

  • Full execution of the foundation formation process, including preparation of required documentation and registration
  • Drafting of the foundation’s articles
  • Tax advisory services related to foundation operations

Contact us today to begin building a legacy that lasts.