Safe tax optimization

When planning for succession and managing family assets, it is worth considering the various options available. In Poland, foreign family foundations have been popular until recently, but legal barriers, high maintenance and legal costs, and the need for regular foreign travel have stood in the way of taking full advantage of them. Closed-end investment funds may be an alternative, offering some tax advantages, capital management support and investment protection through strict regulations.

The family foundation is a new element in the Polish legal system that aims to streamline succession processes and the management of family assets, especially in the context of family businesses. It is particularly important when the heirs of the company’s founder have no interest or qualifications to run the business.

Do you know how Family Foundation income is taxed? In our latest post, we look at the taxation aspects at the stage of benefit payments to beneficiaries. Find out what the situation is when a foundation is dissolved, what the CIT rules are, or what the tax consequences are for “zero tax group” benefits. We also address the transfer of assets and benefits to the founder and beneficiaries, as well as the potential consequences for third parties who are not beneficiaries or funders.

Investment funds offer investors the opportunity to collectively invest their money, in accordance with regulations, into various securities and other property rights. In Poland, there are three types of investment funds: open-ended (FIO), specialized open-ended (SFIO) and closed-ended (FIZ), which differ in their tax statuses, among other things.

An investment fund – in addition to its main purpose of investing in selected financial instruments – can play an important role in the succession of an asset or business. Read the article and find out more.

Among the main advantages of Closed-End Investment Funds (FIZ) is the diversification of the economic risks incurred by entrusting funds to an entity that specializes in making investments, i.e. an investment fund company.

An investment fund – in addition to its standard function of investing the money collected – can act as a “holding company” for carrying out specific investments.

Taking advantage of the Polish Investment Zone’s preferences is an attractive option for investors seeking tax benefits, but such benefits are not without risk. Recognition of eligible costs, inability to take advantage of simplified transfer pricing documentation, and potential revocation of support decisions are just some of the issues that can expose entrepreneurs to unexpected complications. In our latest blog post, we examine these risks and the Polish Investment Zone rules to help investors better understand what these preferences may mean for their business operations.