Skip to content

Is a family foundation the answer to the lack of REIT regulations in the Polish legal system?

Fundacja rodzinna zdjęcie wizerunkowe

As of 22 May, 2023, it became possible to create and register family foundations under the Polish legal system. The Family Foundation Act has revolutionized the approach to the management of private assets and succession procedures. At the same time, family foundations enjoy numerous tax privileges, and thus are an attractive prospect for investment and reinvestment of private investors’ funds.

The benefits of creating a family foundation

  • protection of private property – assets transferred to a family foundation are separate and protected against the risk of loss due to personal liability of the founder for business-related debts;
  • the status of the foundation beneficiary is separate from a person managing the family business; the family assets become the property of the foundation, which administers it in the interests of the beneficiaries; in this way, the foundation protects the assets from the potential adverse consequences of succession procedures, especially when not all family members are interested in continuing to operate the business;
  • a lot of freedom for the founder to define the group of beneficiaries of the foundation, to make strategic decisions, and to set rules for the management of the foundation; the founder is able to adapt these rules to their needs and preferences in order to achieve their goals.

While the main purpose of enacting family foundation legislation is to provide entrepreneurs with better protection of their assets, family foundations can be a beneficial solution for those who wish to make their business more tax-efficient (including real estate firms).

Selected categories of transactions that are tax-exempt for family foundations

  • disposal of property (including real estate), unless the property was acquired solely for the purpose of further disposal,
  • sale of shares (stocks) in subsidiaries (including real estate companies),
  • lease and rental of real estate by the family foundation (excluding real estate used by the beneficiary or the founder in their activities, their affiliates, or the family foundation),
  • lending to capital companies (including real estate companies) in which the foundation holds shares or stock,
  • receipt by the foundation of dividends from subsidiaries (including real estate companies).


A family foundation acquires property, which it rents for a certain period of time. It then disposes of it, and with the proceeds buys another property – also for rent.

All of these events will be CIT-neutral, assuming that the disposal of the property was not made solely for the purpose of further disposal, and that the property itself is not used by the beneficiary or founder of the family foundation in their business operations or by entities related to them or the family foundation.

A Polish family foundation can be a convenient solution for those running family businesses, including those with real estate projects. It is a means of securing succession and aligning it with the needs of entrepreneurs.

Contact DLP for expert advice on whether establishing a family foundation will be beneficial for you.

Maciej Duch, Partner/Attorney, maciej.duch@admin
Przemyslaw Szabat, Counsel/Tax Advisor, registered under No. 12 260