There are many reasons for moving a business abroad, usually related to the owners relocating themselves, foreign expansion, or regulatory considerations. Can a family foundation help in the relocation process?
A family foundation separates the beneficiary’s assets from the foundation’s assets.
There is no one-size-fits-all answer to how to move a business abroad—after all, where you relocate your business and what it consists of are key factors.
We can certainly make generalizations that will guide the analysis, such as the legal form of the business (sole proprietorship, partnership, corporate structure), type of business, or employment.
If we are only relocating ourselves, a family foundation will definitely help—by transferring assets to it, we can avoid an exit tax on the move due to the lack of “ownership” in the foundation.
But what if we want to move not only ourselves but also the business? Here, for example, the recently introduced regulation regarding the transfer of a company’s registered office to another EU country (cross-border transformation of capital companies and limited joint-stock partnerships) will come to our aid.
In short—since we have many options, let’s expand on the topic!
Reasons for Relocating a Business
Why do entrepreneurs move their businesses abroad?
There are many reasons in practice—from purely personal ones (moving abroad, succession issues), to economic ones (expansion into foreign markets), and finally, tax or regulatory reasons (which are often insufficient to trigger corporate moves).
What matters most is that, during discussions with an advisor, we communicate the reasons for our plans clearly. This will help us better answer the question of whether it makes sense.
Challenges of Relocating a Business Abroad
One of the main barriers when operating outside the home country is, of course, the challenge of entering a foreign market.
This barrier includes cultural and linguistic differences, as well as organizational challenges (you usually can’t do it all on your own). These barriers can be overcome by finding the right experts—but there are more difficult issues to address, especially tax law compliance.
The system concerning income tax contains many vague terms and complex cascading structures. One example is the issue of the tax residency of a company. When opening a foreign entity, we do not have certainty that it will definitively gain foreign CIT (Corporate Income Tax) status. It might turn out that, due to management being carried out from Polish territory, the entity will be considered a Polish taxpayer.
If it is, the CFC (Controlled Foreign Company) rules will not apply; if not, they will. Another issue is the exit tax. The transfer of assets to a foreign jurisdiction (or the entrepreneur’s relocation) could result in an exit tax just from completing the transaction or moving!
These and other factors should be considered during the planning phase of the expansion.
What Benefits Await Us?
Relocating a business to another country comes with several important advantages.
First, entrepreneurs gain the opportunity for tax optimization—operating in a country with lower tax rates can significantly improve financial performance.
Additionally, relocation opens up access to new markets, both within the European Union and beyond.
Moreover, in many countries, it is possible to establish a family foundation, which can serve as both a tool for intergenerational succession and an effective form of asset protection.
Lastly, entrepreneurs can benefit from greater legal and financial security, especially if they choose a jurisdiction with a strong institutional system.
Finally, it’s worth considering a model in which a family foundation holds shares in a foreign company.
How to Start the Relocation Process?
The process should begin with an audit of the company’s current legal and tax structure to identify dependencies, liabilities, and potential risks.
Next, you choose the destination country, considering factors such as local regulations, tax rates, ease of doing business, and the availability of succession tools like a family foundation.
Afterwards, you should consider whether it will be possible to legally relocate the company’s registered office or if it would be more beneficial to establish a new company abroad.
How to Select Partners for Business Relocation?
Professional relocation requires a team of experts: lawyers familiar with international law, tax advisors (both Polish and local), family foundation specialists, and accountants with cross-border experience.
Ideally, the entire process should be coordinated by one advisory entity—such as CGO Group—to simplify communication and enhance effectiveness.
What to Watch Out for When Relocating a Business Abroad?
You need to consider factors such as the risk of exit tax, the possibility of double taxation, the obligation to inform contractors, and adapting the company’s structure to the regulations of the destination country.
Failure to plan properly can result in higher costs and potential tax penalties.
Negotiating with Contractors
Changing the company’s location often requires renegotiating terms of cooperation with current partners.
It’s important to prepare appropriate contract clauses and ensure clear communication. Introducing a family foundation as a stable element of the structure can also strengthen the trust of partners.
Types of Business Relocation Abroad
Relocation of the registered office (cross-border relocation)
Sale of assets to a foreign company
Cross-border merger
Establishing a branch or new company abroad
Transferring assets to a family foundation with a foreign registered office
What Are the Tax Implications of Relocating a Company?
The most important implications are:
The need to close the books and prepare CIT-8 (corporate tax return)
The possibility of being subject to exit tax
The risk of double taxation
Changing the tax jurisdiction of the company
The possibility of obtaining tax benefits in the destination country, for example through a family foundation
Company’s Registered Office in the Context of PIT and CIT
Tax residency in Poland depends on the place of management, not just the registered address. Simply moving the address without actually relocating the decision-making center will not change the place of taxation.
The same rules apply to individuals in the context of PIT.
Business Abroad and Tax Residency
Changing tax residency is possible only after the transfer of the center of personal and economic interests abroad. It needs to be appropriately documented and supported by practice.
Read Also:
Family Foundation and Foreign Companies
Family Foundation as a Holding Company
Relocation of a Company and Exit Tax
Exit tax can apply to both companies and individuals transferring assets abroad. This tax is calculated on unrealized profits.
In the case of family foundations, it is important to analyze whether their creation and asset transfer will trigger a tax obligation.
Delocalization and CIT/PIT
For CIT, there is a requirement to settle accounts in Poland up until the change of tax residency. In the new country, the company will be subject to local tax rates. For PIT, changing residence and the center of interests leads to a change in the country of tax settlements.
What’s the Difference Between a Foreign Branch and Relocation of the Registered Office?
A branch is part of a Polish company operating abroad. Relocation of the registered office means changing the tax residency and often establishing a new legal entity.
A family foundation can be part of such a new structure but does not function as a branch.
How CGO Legal Can Help?
CGO Legal provides comprehensive relocation services, from tax and legal analysis, to the establishment of companies/foundations, to ongoing support and representation before authorities.
Clients are assured of full security and coordination throughout the process.
Relocating a Business Abroad — FAQs
Is a family foundation abroad safe?
Yes, if you choose the right jurisdiction.
Can a family foundation in Poland help with registering a business abroad?
Absolutely!
Can I run a business in Poland and have a foundation abroad?
Yes, this is a popular model, as is having a foundation in Poland and a business abroad.
Do I need to liquidate the business in Poland?
No, it is possible to gradually transfer the business.
Will I always benefit tax-wise from relocation?
Not always—individual analysis is necessary.
Michał Gawlak
Attorney-at-Law
Photos: CGO Legal
Family Foundation – Status as of 2025
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This is what a Polish family foundation offers. Check if it’s worth it! [Read more…]
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