The Family Foundation Act introduces a seemingly attractive instrument for Polish entrepreneurs seeking to protect their family assets and plan succession. However, based on my experience advising clients on both Polish and Liechtenstein foundations, I have serious reservations about the practical viability of this institution in the current Polish legal environment.
The promise
On paper, the Polish family foundation offers: asset protection from creditors of individual family members, tax-efficient succession planning, and a structured mechanism for managing family wealth across generations.
The reality
In practice, several factors undermine these promises:
- Tax instability – within months of the law taking effect, the Ministry of Finance signaled changes to the tax treatment of foundations, confirming that the preferential tax regime was being used primarily for tax optimization rather than genuine asset protection.
- Regulatory unpredictability – the Polish legal system is characterized by frequent, often poorly drafted legislative changes. For an instrument designed for multi-generational planning, this is a fundamental problem.
- Judicial uncertainty – disputes about foundations will be resolved by Polish courts, which face well-documented problems with case backlogs, quality of judgments, and independence.
- Limited substance – the foundation cannot conduct substantive business activity, limiting its usefulness for many family businesses.
The alternative: Liechtenstein
For these reasons, I consistently recommend the Principality of Liechtenstein as the preferred jurisdiction for family foundations. The Liechtenstein foundation offers nearly 100 years of legal stability, a specialized and efficient judiciary, and a proven track record of asset protection. Yes, it costs more – but premium products always do.
Paweł Osiński
Attorney, expert in family foundations