Fiduciary Services: Trust Arrangements Under Polish Law

I. Introduction: The Fiduciary Paradigm in Contemporary Commercial Practice

Trust arrangements occupy a distinctive position within Polish commercial law, serving clients—both natural and juridical persons—who, for personal, business, or strategic reasons, prefer to maintain anonymity in specific transactions. These fiduciary structures prove particularly valuable in circumstances requiring:

• Discretion in business negotiations or asset acquisition transactions;
• Circumvention of practical impediments to direct participation in transactions;
• Professional circumstances necessitating temporary dissociation from particular commercial activities;
• Comprehensive asset restructuring requiring phased disclosure of ownership structures; or
• Compliance with statutory limitations or formal requirements governing direct acquisition of specified assets.

II. Doctrinal Foundations of Fiduciary Arrangements

A. The Legal Framework

Although Polish civil law lacks express codification of fiduciary arrangements, such constructions enjoy widespread acceptance pursuant to the principle of freedom of contract embodied in Article 353¹ of the Civil Code (Kodeks cywilny) and find doctrinal support in the statutory provisions governing agency (zlecenie) relationships (Articles 734 et seq. of the Civil Code).

Fiduciary services rest upon contractual arrangements between a principal (zlecający or powierzający) and a professional intermediary (the fiduciary or powiernik). The fiduciary undertakes to execute specified legal acts in his own name but on the principal’s account—thus implementing the model of so-called indirect representation (zastępstwo pośrednie).

B. Essential Characteristics of the Fiduciary Relationship

Maintenance of Confidentiality. In external relations, the fiduciary’s name appears on contracts and transactional documents, thereby preserving discretion regarding the identity of the actual beneficiary.

Obligation of Conveyance. The fiduciary bears a statutory duty (Article 740 of the Civil Code) to transfer to the principal everything obtained in executing the fiduciary arrangement, even if acquired in the fiduciary’s own name. As the Supreme Court articulated in its judgment of January 23, 2014 (II CSK 264/13), this obligation arises ex lege and requires no separate contractual stipulation.

Limitation of Fiduciary Powers. The fiduciary exercises acquired rights solely within the scope and manner specified in the fiduciary agreement and consistent with the principal’s instructions. Rights acquired by the fiduciary remain subject to limitations flowing from the obligatory relationship connecting him with the principal.

Fiduciary Responsibility. The fiduciary acts with due professional care and in the principal’s interest, maintaining loyalty in performing entrusted tasks in accordance with agency provisions (Articles 742-743 of the Civil Code).

III. Taxonomy of Fiduciary Arrangements

Legal practice recognizes several types of fiduciary constructions, distinguished by the scope of transferred powers:

A. Fiduciary Management of assets

This model involves actual transfer of ownership or other rights to the fiduciary, who nevertheless undertakes to reconvey them upon expiration of a specified period or occurrence of a specified condition.

As the Supreme Court noted in its judgment of January 21, 2005 (I CK 528/04):

A shareholder who disposes of shares, even where such disposition possesses fiduciary character, must reckon with losing all rights comprising such share.

Where fiduciary disposition encompasses all shares held by a shareholder in a limited liability company, the shareholder loses personal rights as well (Article 159 of the Commercial Companies Code), which “revive” only upon reconveyance of the shares.

B. Fiduciary Arrangements for Acquisition Purposes

The fiduciary undertakes to acquire specified assets in his own name but on the principal’s account. This constitutes the most frequently encountered form of fiduciary arrangement in commercial transactions, particularly for acquiring:

• Shares or stock in capital companies;
• Real property;
• Enterprises or organized parts thereof; or
• Claims.

C. Fiduciary Arrangements for Collection Purposes (Indos Powierniczy w Celu Inkasa)

The fiduciary receives authority to collect claims exclusively in the principal’s interest. As the Supreme Court observed in its judgment of May 24, 2007 (V CSK 23/07):

Where a fiduciary endorsement for collection purposes serves exclusively the endorser’s interests, the provisions of Articles 10 and 17 of the Bills of Exchange Law do not preclude the bill debtor from raising against the endorsee defenses available against the endorser.

In this construction, no legally protected commercial transaction exists under bills of exchange law, as the endorsement’s effects materialize in the principal’s legal sphere rather than the fiduciary’s.

IV. Formal Requirements for Fiduciary Agreements

A. The Principle of Contractual Formality Freedom

The doctrine of freedom of form constitutes a foundational principle in modern contract law, permitting parties to structure their obligations with minimal formal constraints absent express statutory requirements to the contrary. This principle finds particularly salient application in the context of fiduciary agreements—arrangements whereby one party (the fiduciary) undertakes to acquire or hold property in their own name but for the account and benefit of another (the principal). Under Polish civil law, such agreements, characterized as obligatory rather than dispositive transactions, are governed by the general provisions relating to mandate (mandatum) as codified in Articles 734 et seq. of the Civil Code, and accordingly require no particular formality for their validity.

The Polish Supreme Court articulated this position with unmistakable clarity in its decision of January 23, 2014 (Case No. II CSK 264/13), holding that:

An agreement whereby one party undertakes vis-à-vis another to acquire, in its own name but for the other’s account, specified property rights… constituting as it does an obligatory agreement to perform fiduciary services involving not merely juridical acts but factual conduct as well, should, pursuant to Article 750 of the Civil Code, be governed by the provisions concerning mandate (Articles 734 et seq.).

This characterization carries significant implications for formal requirements: insofar as the fiduciary agreement itself constitutes merely an obligation to perform—rather than the performance itself—it remains subject to the liberal formality regime applicable to contracts of mandate.

B. The Evidentiary Function of Form: Article 74 and the Ad Probationem Doctrine

Notwithstanding the absence of mandatory form requirements ad solemnitatem, prudential considerations counsel in favor of documentary formalization. While fiduciary agreements may theoretically be concluded orally, the practical exigencies of potential disputes between principal and fiduciary suggest that written, documentary, or electronic form should be adopted for evidentiary purposes (ad probationem), as contemplated by Article 74 of the Civil Code.

Article 74 establishes a graduated regime of formal requirements, distinguishing between form prescribed for validity and form prescribed solely for proof. Where the latter applies, failure to observe the designated form does not vitiate the transaction itself but rather operates to constrain the range of admissible evidence in subsequent litigation—a consequence materially less severe than nullity, yet nonetheless significant in the forensic context.

C. Primary Evidentiary Consequences

Pursuant to Article 74(1), when written, documentary, or electronic form has been stipulated for a given transaction without the sanction of invalidity, non-compliance renders inadmissible testimonial evidence—whether from witnesses or party examination—to establish the fact that the transaction occurred. This prohibition does not extend to situations where the designated form is required merely to trigger specific legal consequences (such as the establishment of a date certain) rather than to evidence the transaction’s existence per se.

The rationale underlying this evidentiary restriction warrants examination. By requiring parties who stipulate formal requirements to adduce documentary proof of their agreements, the law seeks to minimize opportunities for perjury and erroneous recollection while simultaneously encouraging careful memorialization of significant transactions. The rule thus serves both accuracy-enhancing and channeling functions, directing parties toward more reliable modes of proof while respecting party autonomy in structuring their evidentiary obligations.

D. Statutory Exceptions and Judicial Discretion

The rigidity of Article 74(1)’s evidentiary bar is tempered by three significant exceptions enumerated in subsection (2), permitting testimonial evidence notwithstanding formal deficiencies where:

1. Both parties consent to its admission—reflecting continued respect for party autonomy even in the evidentiary sphere;
2. A consumer demands it in a dispute with a merchant—embodying the protective principle that pervades modern consumer law and recognizes the structural inequality inherent in consumer-merchant relationships; or
3. The transaction’s occurrence is rendered probable by documentary evidence, such as email correspondence, payment confirmations, or contemporaneous notations—a pragmatic accommodation recognizing that modern commercial practice often generates informal written records that, while falling short of the stipulated form, nonetheless provide substantial indicia of reliability.

This third exception merits particular attention, as it reflects judicial recognition that formality requirements should not operate as traps for the unwary or as mechanisms for parties to evade obligations memorialized in alternative, albeit informal, written formats. The requirement of Urkundenbeweis—proof by document—rather than formal compliance represents a studied compromise between formalism and commercial reality.

E. Asymmetric Formality Requirements

Article 74(3) addresses the scenario where formal requirements apply to only one party’s declaration. In such circumstances, if that party fails to observe the required form, the counterparty may nonetheless introduce testimonial evidence—a rule that prevents the party subject to the formal requirement from leveraging its own non-compliance as a shield against enforcement while simultaneously protecting the interests of the party not subject to such constraints.

F. The Professional Transaction Exception

Article 74(4) introduces a categorical exception of considerable practical significance: the evidentiary restrictions set forth in the preceding subsections simply do not apply to transactions between merchants. In the sphere of commercial dealings, parties may establish the fact of a transaction through any admissible means of proof, regardless of whether any particular form was observed. This exception reflects the legislature’s determination that commercial actors, possessed of greater sophistication and resources than ordinary consumers, may fairly be held to a more exacting standard of documentation and should not be permitted to exploit formal deficiencies to escape obligations undertaken in the ordinary course of business.

The policy rationale is pellucid: professional parties engaged in commercial transactions operate within a framework of heightened diligence expectations and benefit from organizational structures capable of generating and preserving reliable records. The law accordingly declines to provide such parties with evidentiary advantages predicated on formal non-compliance, instead imposing upon them the burden of maintaining adequate documentation if they wish to rely upon it.

G. Practical Implications for Fiduciary Arrangements

The foregoing analysis yields several practical conclusions regarding the optimal structuring of fiduciary agreements. Where both parties to such an agreement qualify as merchants, the evidentiary form requirements of Article 74 possess negligible practical significance by virtue of the professional transaction exception. Such parties remain at liberty to prove their agreement through any competent evidence, and formal compliance, while perhaps advisable from a risk management perspective, generates no special evidentiary advantages.

Conversely, where at least one party does not qualify as a merchant, compliance with written, documentary, or electronic form requirements assumes considerably greater importance. In such circumstances, failure to memorialize the agreement in an appropriate form may substantially impair the ability to establish its terms or even its existence in subsequent litigation, subject only to the exceptions previously discussed.

It bears noting that formal requirements may be satisfied retrospectively: a written document executed subsequent to an oral agreement suffices for evidentiary purposes provided it accurately recites the substance of the previously exchanged declarations of intent. This temporal flexibility permits parties to cure initial formal deficiencies and thereby secure the evidentiary advantages attendant to documentary proof.

H. The Intersection of Obligatory and Dispositive Formalities

A conceptually distinct question concerns whether fiduciary agreements must satisfy the formal requirements prescribed for the underlying dispositive transactions they contemplate. The general principle holds that obligatory agreements need not conform to the formalities required for the performance obligations they generate. Thus, for instance, an agreement whereby a fiduciary undertakes to acquire real property on behalf of a principal need not be executed in notarial form, notwithstanding that the ultimate conveyance must satisfy such requirements.

This principle flows logically from the obligatory-dispositive distinction: the fiduciary agreement creates personal obligations between principal and fiduciary but does not itself effect any transfer of property rights. The actual execution of the fiduciary arrangement—the acquisition or disposition of assets by the fiduciary—must naturally comply with whatever formal requirements attach to such dispositive acts, but those requirements do not “infect” the underlying obligatory agreement.

I. Strategic Considerations in Form Selection

Nevertheless, strategic considerations may counsel in favor of conforming the fiduciary agreement to the formalities required for the contemplated dispositive transactions, particularly where the risk of subsequent disputes concerning asset recovery appears material. Where special formalities attach to particular types of property—notarial form for real property conveyances, notarially authenticated signatures for share transfers in limited liability companies—adopting equivalent formalities for the underlying fiduciary agreement may enhance the principal’s remedial options in the event of the fiduciary’s breach.

This consideration implicates Article 64(1) of the Civil Code, which permits a party, in specified circumstances, to seek judicial performance of a juridical act or judicial substitution for a debtor’s declaration of intent where the debtor improperly refuses to perform an obligation to make such a declaration. While this provision explicitly governs preliminary agreements (Article 390(2)) and certain other specified arrangements, both scholarly commentary and judicial precedent support its analogous application to other obligations to make declarations of intent.

Critically, however, the availability of this remedy depends upon formal compliance: a court may substitute its judgment for a debtor’s declaration only where the obligation to make that declaration has been evidenced by a document conforming to the formalities required for the very act the debtor was obligated to perform. Thus, if a fiduciary agreement contemplates the ultimate transfer of real property, and that agreement is documented in notarial form (as required for conveyances), the principal may seek judicial substitution for the fiduciary’s declaration; absent such formal compliance, this remedy remains unavailable.

J. Article 390 and Anticipated Agreements

Article 390 merits closer examination in this regard. Subsection (1) establishes that where a party obligated to conclude an anticipated agreement improperly refuses to do so, the counterparty may recover damages for reliance losses. The parties retain freedom to vary this measure of recovery by contract. Subsection (2), however, provides that where a preliminary agreement satisfies the formal requirements governing validity of the anticipated agreement—including form requirements—the entitled party may seek specific performance by demanding conclusion of the anticipated agreement itself.

The implications for fiduciary arrangements are manifest: elevating the fiduciary agreement to the formal level required for the contemplated dispositive transaction transforms what would otherwise constitute merely a claim for damages into a potential claim for specific relief in the form of court-ordered property transfer. This strategic advantage may prove decisive where monetary compensation provides inadequate redress—a circumstance not uncommon where unique or irreplaceable assets are concerned.

K. Conclusion: Formality as Strategic Choice

The formal requirements governing fiduciary agreements under Polish law reflect a carefully calibrated balance between contractual freedom and evidentiary reliability. The default rule of form-freedom recognizes the essentially obligatory character of such arrangements while permitting parties to structure their relationships with maximal flexibility. Simultaneously, the ad probationem regime of Article 74 channels parties toward documentary formalization without rendering informal agreements void, thereby serving accuracy-enhancement and channeling functions while avoiding the trap of excessive formalism.

For sophisticated parties, particularly those engaged in commercial transactions, formal requirements present less a constraint than a strategic choice. The professional transaction exception largely eliminates evidentiary concerns for merchant-to-merchant dealings, while the possibility of elevating fiduciary agreements to the formal level required for contemplated dispositive acts opens remedial avenues unavailable under purely informal arrangements. The prudent counsel will therefore evaluate formal requirements not as mandatory compliance obligations but as risk allocation mechanisms and remedial strategy considerations, selecting the appropriate level of formality based upon the nature of the contemplated transactions, the relationship between the parties, and the consequences of potential breach.

In the final analysis, form serves function: the question is not whether formalities must be observed, but rather which formalities should be observed given the parties’ respective interests and the nature of their undertaking. It is this functional approach to formal requirements—pragmatic yet principled, flexible yet structured—that characterizes modern civil law’s treatment of fiduciary arrangements.

V. Legal Effects of Fiduciary Arrangements Vis-à-Vis Third Parties

A. Protection of Good-Faith Acquirers

In relations with third parties, the fiduciary appears as full owner or holder of acquired rights. Limitations flowing from the fiduciary agreement possess obligatory character and generally lack effect against third parties acting in good faith.

VI. Limitations and Risks Inherent in Fiduciary Constructions

A. Prohibition Against Circumventing Statutory Provisions

A fiduciary agreement may not serve to circumvent statutory provisions (Article 58 § 1 of the Civil Code). As the Supreme Court observed in its judgment of January 23, 2014 (II CSK 264/13):

An agreement whereby a counterparty to a foreign national unable to obtain authorization required by the statute concerning acquisition of real property by foreign nationals undertakes to acquire on the foreign national’s account a right subject to such requirement (…) [may be] deemed a legal act aimed at circumventing statute and thus void pursuant to Article 58 § 1 of the Civil Code.

In such circumstances, both the act of acquiring the right on the foreign national’s account and the agreement itself obligating such acquisition would be void.

B. Foreign Exchange Regulations and Commercial Restrictions

Fiduciary agreements concluded during the period when foreign exchange law remained in effect had to account for foreign exchange regimentation. Absence of required authorization could result in contract invalidity pursuant to Article 58 § 1 of the Civil Code in conjunction with Article 9 of the Foreign Exchange Law of September 29, 1994.

C. Acquisition of Shares and Stock by Foreign Nationals

Article 3e(1) of the statute concerning acquisition of real property by foreign nationals imposed special restrictions, conditioning foreign nationals’ acquisition of shares or stock in companies owning real property upon authorization from the Minister of Internal Affairs in specified circumstances.

As the Supreme Court indicated in its judgment of January 23, 2014 (II CSK 264/13), under such circumstances a fiduciary agreement might be deemed an act aimed at circumventing statute. Nevertheless, even upon finding invalidity with respect to acquisition of particular shares, consideration of partial preservation of the agreement’s force pursuant to Article 58 § 3 of the Civil Code would prove necessary.

VII. Tax Aspects of Fiduciary Agreements

Fiduciary constructions carry significant tax consequences. Consistent with established positions of tax authorities and administrative courts, as comprehensively set forth in the Provincial Administrative Court in Gdańsk’s judgment of January 13, 2015 (I SA/Gd 1219/14):

A. Fundamental Principles Governing Taxation of Fiduciary Agreements

Income arising from performance of a fiduciary agreement is attributable to the principal, who constitutes the actual economic beneficiary. As the Gdańsk court articulated:

Inasmuch as funds obtained in connection with performance of the agreement obligate the fiduciary pursuant to the agreement binding him to convey them to the principal—income arising from performance of the fiduciary agreement should be attributed to the principal.

Only the commission (compensation) for executing the agency constitutes the fiduciary’s income:

By contrast, the fiduciary’s income consists solely of the commission arising from the fiduciary agency agreement.

The fiduciary performs a technical function and derives no economic benefit from the transaction itself executed on the principal’s account—acting merely as legal intermediary.

B. The Reciprocal Character of Performance Under Fiduciary Agreements

Understanding tax consequences requires grasping the character of performance under fiduciary agreements. The Gdańsk court emphasized:

Only such benefits as lack reciprocal character may be deemed taxable income. Income constitutes essentially a specified accretion to assets, and thus its receipt must possess definitive character.

Regarding fiduciary agreements:

A fiduciary agreement, which by its very nature involves transfer and return of asset value, should be treated as generating a benefit possessing reciprocal character, and thus one that is tax-neutral and should be placed on par with, for example, a loan agreement (i.e., one not generating income under the personal income tax).

C. The Moment Income Arises

Pursuant to Article 11(1) of the Personal Income Tax Act, income arises upon receipt or placement at the taxpayer’s disposal of monies, monetary values, or benefits in kind.

In the context of fiduciary agreements, this means:

• During the fiduciary relationship’s subsistence—funds received by the fiduciary enter his assets formally but subject to the obligation to convey them to the principal. During this period, no definitive accretion yet arises for the principal.
• Upon settlement of the agency—only when the fiduciary conveys to the principal everything obtained for him (after deducting due compensation and costs incurred) does a definitive asset accretion constituting taxable income arise for the principal.

D. Example: Satisfaction of Claims Assigned to the Fiduciary

The Gdańsk court explained that in the case of a fiduciary agreement concerning assignment of claims:

• Satisfaction of claims by the debtor until transfer of ownership of claims to a third party (e.g., a company) constitutes the principal’s income, as the principal remains the actual creditor (economic beneficiary).
• After transfer of ownership of claims to a third party (e.g., contribution of claims as capital to a company), subsequent satisfaction of claims produces no tax consequences for the principal—income is recognized by the party who became owner of the claims.

E. Distinction Between Fiduciary Arrangements and Other Constructions

Fiduciary arrangements must be distinguished from:

• Commission agreements (Article 765 of the Civil Code)—where the commission agent purchases or sells movables in his own name but on the principal’s account. As case law indicates, with commission arrangements as well, only the commission constitutes the agent’s income, not the transaction’s value.
• Powers of attorney (representation)—where the attorney-in-fact acts in the name and on behalf of the principal, with legal effects arising directly in the principal’s legal sphere.

F. Consequences for Deductible Expenses

Costs incurred by the fiduciary in connection with executing the agency present a significant issue. Articles 742-743 of the Civil Code provide that:

• The principal should reimburse the fiduciary for expenses incurred for proper performance of the agency, together with interest.
• The principal should release the fiduciary from obligations undertaken in his own name for purposes of executing the agency.

From a tax perspective, however, such costs cannot be directly charged as deductible expenses by the principal at the moment the fiduciary incurs them, because:

• Pursuant to Article 22(1) of the Personal Income Tax Act, deductible expenses comprise costs incurred for purposes of obtaining income.
• Costs incurred by the fiduciary constitute his expenditures, not the principal’s.
• Only after settling the agency and the principal’s reimbursing the fiduciary for such costs might they potentially be recognized as deductible expenses on the principal’s part—provided they satisfy general prerequisites under Article 22 (purposefulness, incurrence for obtaining income, documentation).

G. Tax System Coherence

The Gdańsk court emphasized that the proposed statutory construction ensures:

• Tax system integrity—income is recognized either by the principal (in case of proper agency settlement) or by the fiduciary (in case of prescription or discharge of the settlement obligation).
• Consistency with taxation principles—taxation occurs for the party who ultimately realizes definitive asset accretion.
• Conformity with agency character—economic consequences of agency performance affect the principal, not the fiduciary.

VIII. Jurisprudential Foundations of Fiduciary Constructions

Polish jurisprudence has repeatedly confirmed the validity and efficacy of fiduciary agreements:

• Supreme Court Judgment of January 23, 2014 (II CSK 264/13)—recognized the permissibility of fiduciary acts within the boundaries of freedom of contract, indicating that the fiduciary acquires rights subject to an obligation to exercise them only within a specified scope. The Court comprehensively addressed distinctions among various types of fiduciary agreements and formal requirements applicable thereto.
• Supreme Court Judgment of January 21, 2005 (I CK 528/04)—resolved the consequences of fiduciary disposition of shares in a limited liability company, indicating that the transferor loses shareholder status and personally conferred rights, which may “revive” only upon reconveyance of shares.
• Supreme Court Judgment of May 7, 2004 (III CK 563/02)—explained issues surrounding acquisition of bills through endorsement executed after protest (post-protest endorsement) and the scope of defenses that bill debtors may raise against the acquirer.
• Supreme Court Judgment of May 24, 2007 (V CSK 23/07)—resolved the scope of application of Bills of Exchange Law provisions (Articles 10 and 17) to fiduciary endorsements for collection purposes, distinguishing situations where it serves exclusively the endorser’s interests from cases where it serves the endorsee’s interests as well.
• Provincial Administrative Court in Gdańsk Judgment of January 13, 2015 (I SA/Gd 1219/14)—comprehensively addressed tax consequences of fiduciary agreements, indicating that income arising from performance of a fiduciary agreement is attributable to the principal, whereas only the commission constitutes the fiduciary’s income. This judgment currently provides the foundation for tax interpretations concerning fiduciary agreements.

IX. Conclusion

Jurisprudence consistently confirms the legality of fiduciary constructions as legal instruments permissible within freedom of contract (Article 353¹ of the Civil Code), subject to the caveat that they may not serve to circumvent statutory provisions (Article 58 of the Civil Code). Fiduciary agreements must be concluded and performed in accordance with law and with due regard for all limitations and requirements prescribed for acquiring specified categories of assets.

The “Skarbiec” Law Firm provides legal advisory services concerning fiduciary constructions, ensuring full compliance with applicable regulations and Polish judicial precedent. We offer comprehensive legal services from the stage of designing fiduciary structures, through preparation of documentation and analysis of tax consequences, to representation in judicial and administrative proceedings. Our experience encompasses both classical fiduciary constructions for asset acquisition purposes and sophisticated structures utilizing claims, shares in capital companies, and financial instruments.