This guide covers the full spectrum of family office structure options: the main organisational models, the legal entity frameworks that hold them together, the governance structures that keep them running and the cost implications of each approach. If you are evaluating how to structure a family office, or looking to evolve an existing setup, this is your starting point.
The economics of running a family office are being pulled in two directions at once. Costs rise as families bring more people and functions in-house, building out executive teams and dedicated infrastructure. At the same time, they are coming down as outsourced, shared and technology-enabled services mature, giving families access to sophisticated capabilities without the overhead of a full standalone operation. Understanding where your family sits between those two forces is central to choosing the right structure.
The question is no longer whether a family can afford a family office, but which parts of it they genuinely need to own. The most effective structures we see pair a small core team, holding judgment and relationships in-house, with outsourced, shared and increasingly technology-enabled services for everything else. That combination is quietly widening the range of families for whom a family office makes sense.
Francois Botha, Founder of Simple
Family offices have come a long way
Family offices can be traced back to the industrial revolution when many successful entrepreneurial merchant families created informal structures to manage and support investments into new business opportunities. Historically, these structures always emerged subsequent to significant wealth being generated by a successful family business. Over the last four decades, family office structures have evolved significantly in response to changes in the regulatory and tax landscape as well as the increasing need for improved risk management and faster decision-making in a new world of business where wealth can be created and lost in a much shorter space of time. Sophistication, efficiency, sustainability and performance have become key drivers of the changing face of family offices around the globe. Establishing a family office with the appropriate organisational, legal and governance structure has become essential to achieving these goals.
The evolution of family office structures
Some commonalities still exist between modern family offices and those of the Industrial Revolution, the most important being the connection to an operating family business. More than half of current families who have a family office also manage one or more operating businesses and many of these modern family offices started in a similar informal fashion to those of the past.
The main family office structures
There are five principal structural models for a family office. Each has different implications for cost, control, services and scalability.
Trust structure
In the twentieth century, trusts became very popular as a vehicle to acquire and hold assets on behalf of the family, with foundations fulfilling a similar role in civil law jurisdictions. Succession planning, tax planning and asset protection were usually the key drivers of this trend.
As sophistication and desire for greater control has grown in families wanting fiduciary structures, legislative innovation has kept pace, enhancing the breadth of options for families and protections afforded to them. In terms of control, reserved power or directed trusts have become more common, together with private trust company structures that have a mixture of professionals and family on trustee boards. Protections include legislated asset protection provisions, anti forced heirship firewall legislation, and enhanced privacy or removal of the need for obtaining probate to name a few.
The fiduciary structure tends not to be (assuming it is an investment led family office) the family office itself, but rather a family wealth holding vehicle with bespoke governance protocols that interacts with a family office. Usually, we see the trustee appointing the family office as investment advisor or manager, with the trustee monitoring the investment performance at appropriate intervals.
A relatively recent trend over the past decade in the international fiduciary offering is that increased regulation, whether that is the common reporting standard, FATCA, beneficial ownership and other registers, economic substance etc, means that the level of wealth required to maintain these structures has undoubtedly increased. Despite this, they remain ever more popular as a means to hold family wealth.
Embedded family office structure
As in the past, many family offices of the modern era were initially started informally using existing resources within the family and family business to carry out various administrative, accounting and wealth management functions. Essentially the 'family office' structure becomes embedded in the family operating business. There is no separate legal or organisational structure in this instance which generally becomes a significant challenge as family wealth increases and family demands become more complex and nuanced. Not only does it become too difficult for resources to be adequately split between the needs of the operating business and the family but compliance and governance issues generally pose an even greater problem. Breaches of contract, breaches of fiduciary duty, conflicts of interest and tax reporting violations are common concerns that arise from this approach. Additionally, this structure does not allow for deductions of expenses related to investments, tax planning, estate planning and asset protection.
The single family office
Following the second world war, single family offices began to take hold in North America and Europe. These enterprises, almost always structured as stand-alone business entities, are dedicated to managing the financial and personal affairs of a single wealthy family. Originally, these family offices were primarily focused on investment advisory with little participation in tax planning, estate planning, philanthropy and succession planning etc. From the 1980s, single family offices began to evolve into more sophisticated structures shifting specialised resources in-house and offering a more comprehensive and integrated suite of services. Single family offices generally have several staff members. The bigger, more established single family offices will typically include an executive team comprising a chief executive officer, chief investment officer, chief financial officer, operations manager and legal counsel. This team will manage a diverse set of employees ranging from administrators, accountants and book-keepers to those responsible for HR, IT and real estate to name but a few. More often than not, complicated tax planning, specialised private equity and wealth transfer planning are still outsourced but not in all cases. Single family offices are therefore expensive to run and are most appropriate for ultra-high net worth families who prioritise investment autonomy, privacy and purpose.
Multi-family office
The multi-family office has emerged as a significant and fast-growing player in the family office sector. These are companies that are structured in a similar way to single family offices and offer similar services, but manage the wealth of two or more unrelated families and create synergies and economies of scale among them. Many multi-family offices began as single family offices and grew to an extent that they could become a commercial entity offering their services to other families. Most multi-family offices are family owned however, private banks and wealth management firms have also become increasingly active in this space, now offering dedicated in-house family office teams (Commercial multi-family offices) to service multiple wealthy families. Multi-family offices don't offer the same level of control and autonomy that a single family office offers but cost efficiency is usually an attractive reason for choosing this structure.
Virtual family office
A virtual family office typically employs only one or two people to coordinate outsourced family office services as and when needed. It is normally contained within a separate legal structure but without separate office facilities. VFOs have become increasingly popular amongst families that are looking for a more cost-effective option to achieve compliance and accounting integrity and who require a less complex array of services. Private banks and wealth managers have responded to the growth in the virtual family office concept by establishing specialised departments which provide investment, succession, philanthropy and governance support to these entities.
Legal entity considerations for family offices
Family offices around the world are generally structured as traditional corporations and their equivalents or as Limited Liability Companies (LLCs) and their equivalents. In the United States, family office corporations are either structured as Subchapter C or Subchapter S corporations. Family offices can also be structured as proprietorships or partnerships but this generally isn't advised as these entities do not protect family member assets with respect to personal liability.
Tax regulations and new laws governing securities exchange and investment advisory services have evolved significantly over the past couple of decades. In many cases, these regulatory changes have rendered many established family office structures inefficient or obsolete.
When determining the appropriate family office structure, one must consider both the planned and future services to be provided, the size of AUM and applicable government regulation in a particular jurisdiction. Optimal, best-in-class structures take into account specific regulatory, liability and asset preservation considerations and therefore often include multiple legal structures. This is to ensure optimal tax efficiencies whilst ensuring compliance and good governance.
The multi-tiered entity framework
- The management company (ManCo). The central operating entity. It employs staff (CIO, CFO, legal advisors, administrators), manages payroll and oversees day-to-day operations. Commonly structured as an LLC or C-corporation, the ManCo provides the operational backbone and is where executive talent is hired and managed. C-corps are increasingly popular for optimising executive compensation and retirement planning, while LLCs are favoured for pass-through taxation and structural flexibility.
- Investment holding entities. These hold and grow the family's active capital, private equity ventures and real estate portfolios. Most commonly structured as limited partnerships (LPs) or series LLCs, they allow family members to act as passive limited partners, enjoying liability protection, while a general partner (usually the ManCo) manages the assets.
- Asset protection and wealth transfer vehicles. These shield underlying generational wealth from creditors, estate taxes and potential litigation. The most common forms are private trust companies (PTCs), grantor and non-grantor trusts, and family holding companies set up as family limited liability companies. Family holding companies are particularly effective for centralising asset ownership and protecting personal assets.
Alongside these three tiers, established offices often add related entities such as ancillary family offices in other jurisdictions, real estate management companies, captive insurance companies and registered investment advisers, each chosen for a specific regulatory, tax or liability purpose.
Setting up these structures requires careful coordination between family attorneys, tax advisors and wealth preservation specialists. Cross-billing between family trusts and the ManCo often uses transfer pricing studies to demonstrate to tax authorities that fees align with third-party, fair-market values.
Costs of running a family office structure
One of the most frequently asked questions about family office structure is cost. The answer depends heavily on which model you choose and how many functions you keep in-house.
Two forces now shape these numbers. Costs climb when a family builds capability in-house: every additional executive, specialist and piece of infrastructure adds to the annual bill, which is why offices serving large, multi-generational families with many stakeholders tend to sit at the top of the range. At the same time, the baseline cost of running a capable office is falling. The growth of outsourced providers, shared service models and technology-enabled platforms means families can now access investment, reporting, compliance and administration functions without hiring for each one. The result is a widening spectrum, from sophisticated full-service operations at the top to lean, largely outsourced setups that would have been impractical a decade ago.
Single family offices are the most expensive to operate. The average SFO costs between US$1 million and US$3 million annually, largely driven by staffing and technology expenses. A full executive team (CEO, CIO, CFO, operations, legal counsel) plus support staff, office facilities and technology infrastructure quickly adds up. Because managing everything in-house can be highly demanding, SFOs frequently use a hub-and-spoke model where the core team manages operations internally but selectively outsources complex litigation, specialised tax strategies and external audits.
Multi-family offices are significantly more cost-efficient, typically ranging between US$200,000 and US$800,000 per year. The cost is shared across multiple families, creating economies of scale that make sophisticated services accessible to families with lower net worth.
Virtual family offices sit at the lower end, usually between US$100,000 and US$300,000 annually. Because a VFO relies on outsourced providers for most services and carries minimal overhead, it offers a compelling entry point for families who are not yet ready to fund a full standalone operation.
Embedded structures, where the family office operates out of the family business, appear to have the lowest direct cost, but the hidden expenses of poor governance, missed tax deductions and compliance failures can far exceed the cost of a proper standalone structure.
The importance of jurisdiction
Available legal structures and the tax implications of each structure differ greatly from country to country. Additionally, government regulations pertaining to family office operations and services are also not consistent across the globe. Some of the most important considerations in determining jurisdiction for a family office are income taxes, liability protection, asset protection, executive compensation and benefits.
Of course, there are other practical considerations like where the family is based and where the majority of assets are. When considering these aspects, it is important to take a long-term view, understanding future migration plans and taking into account future investment plans in other jurisdictions. Our regional guides offer local intelligence across the major family office hubs.
Jurisdiction comparison
The table below summarises key structural and regulatory considerations across some of the most popular family office jurisdictions:
| Factor | United States | United Kingdom | Singapore | United Arab Emirates | South Africa |
|---|---|---|---|---|---|
| Preferred entity | LLC / C-corp / S-corp | Limited company / trust | Pte Ltd / trust | Free zone or mainland company | Trust / Pty Ltd |
| Regulatory threshold | Family office exclusion from SEC registration if the office serves only family clients (no set AUM threshold) | No family-office-specific threshold; FCA authorisation depends on the regulated activities carried on | No general threshold; 13O and 13U tax incentive schemes carry minimum AUM and spending conditions | No formal threshold | No formal threshold |
| Income tax | Federal plus state (varies) | Up to 45%; non-dom remittance basis abolished in 2025 | 0% on qualifying foreign-sourced income (with conditions) | 0% personal income tax; 9% federal corporate tax on some entities | Progressive rates up to 45% |
| Inheritance / estate tax | Up to 40% federal estate tax | Up to 40% inheritance tax | None | None | Estate duty of 20% to 25% |
| Privacy level | Moderate (beneficial ownership registers) | Moderate | High | High | Moderate |
| Key consideration | Family office exclusion available; significant state-by-state variation | Authorisation driven by activities, not AUM; high inheritance tax exposure | Growing hub with a strong wealth management ecosystem; incentives require minimum AUM | Zero personal tax; fast-growing infrastructure | Strong fiduciary tradition; estate duty and capital gains apply on death |
Key structural and regulatory considerations across major family office jurisdictions.
Explore these jurisdictions in more detail through our regional guides for the United States, United Kingdom, Singapore and the United Arab Emirates.
For a family office structure, the choice of jurisdiction affects not just tax but also regulatory compliance, asset protection, privacy and the ease of hiring talent. It is not unusual for a family to establish entities in multiple jurisdictions to optimise across these factors. For example, the ManCo might sit in the family's home country, the trust in a jurisdiction with strong asset protection (such as New Zealand, Nevis or South Dakota) and offshore investment vehicles in a tax-efficient hub such as Singapore or the UAE.
Governance structures
A robust governance structure is essential for supporting the sustainability and long-term objectives of a family office. Drawing up an agreed constitution in consultation with all family members is a good starting point. This would include a mission statement and an articulation of the family's core values and purpose. Setting up a board of directors to manage the strategic direction of the family office, in line with the family's long-term vision, is crucial. It can sometimes be very beneficial to include independent directors who can bring experience, knowledge and new thinking. Everyone needs to understand their roles and responsibilities within the structure and decision-making, strategic planning and conflict resolution processes should be well defined.
Key governance components
Established family offices typically build their governance framework around these elements:
- Family constitution. A formal document outlining the family's legacy mission, shared values, rules for ownership transfer and expectations for family members who work within or alongside the office.
- Family council. A structured group that allows family members to communicate, voice their opinions and learn about the family wealth. The council often serves as the bridge between the family and the executive management team.
- Board of directors. A formal board (often with independent directors) that oversees strategic direction, approves major investments and monitors executive performance. Independent directors are particularly valuable for bringing outside expertise and impartiality to succession planning and conflict resolution.
- Investment policy statement. A document that defines the family's investment objectives, risk tolerance, asset allocation strategy and performance benchmarks. This provides the CIO with clear guardrails.
- Succession plan. A documented plan for leadership transition, including criteria for when the next generation takes on greater responsibility and the mechanisms for mentoring and knowledge transfer.
A typical organisational structure of an established single family office or family-owned multi-family office
Most established family offices have an executive team comprising a Chief Executive Officer, a Chief Investment Officer and a Chief Financial Officer. The Operations Manager role within a family office is sometimes absorbed into other executive positions however, as the complexity of the family office increases this position tends to stand on its own. Below is a very brief overview of the roles and responsibilities of the CEO, CIO and CFO in the family office context:
Chief Executive Officer (CEO)
The CEO position in a family office requires unique strategic, operational and interpersonal competence. A family office CEO needs to have a deep understanding of the family and their specific needs and goals. The CEO is in charge of the family office and has the responsibility and authority to develop strategy, design the organisation, hire and fire employees, establish managerial roles, and determine how required services are to be delivered.
Chief Investment Officer (CIO)
The responsibilities of a CIO vary widely from family office to family office, based on the size, complexity and investment objectives of the family. Whether the family office outsources its investment services or manages its assets in-house, CIOs will focus their time and effort on developing the investment strategy, executing the strategy and evaluating performance.
Chief Financial Officer (CFO)
The CFO is a specialised role, traditionally focused on preparing the monthly financial packages, finance audits, assets and controls, oversight of forecasts and budgets and coordination of the preparation and filing of required tax reports. In addition, the CFO is often responsible for supporting projects relating to IT and real estate as well as due diligence for new investments.
Choosing the right structure for your family
No single family office structure is right for every family. The decision depends on your family's size, AUM, geographic footprint, values and long-term objectives.
Families with substantial assets (typically US$100 million plus) often start with a standalone single family office structure because they can justify the cost and value the control and privacy it provides. Families with lower AUM may find a multi-family office or virtual family office structure more cost-efficient while still gaining access to professional services.
The embedded structure, while the cheapest initially, tends to become unsustainable as wealth grows and regulatory requirements increase. Most families who start embedded eventually transition to a more formal structure.
When evaluating your options, consider these questions:
- What services do we need now and in five years' time?
- How many family members are involved and what is their appetite for working together?
- What is our primary objective: wealth preservation, growth, legacy or all three?
- Where are our family members and assets based geographically?
- What regulatory and tax environment are we most comfortable operating in?
We recommend working with a family office advisory firm to evaluate your specific situation. Simple Select offers structured evaluation of service providers to help you find the right team for your family office structure.
Take a structured approach
As family offices become more complex in terms of their objectives, needs and investment strategies, establishing effective organisational, legal and governance structures becomes increasingly important. A family office needs to understand the long-term goal that they are working towards, the resultant structure that supports that goal and how best to structure the business from a legal perspective to remain compliant and tax-efficient within a particular jurisdiction.