Many wealthy families plan in advance the management of their wealth and dispose of it competently, not only during their lifetime but also with an eye on their heirs. Against the backdrop of an unstable economic and geopolitical situation in the world, asset protection is becoming a very important topic. Especially when it comes to diverse capitals in the form of corporations, financial savings, real estate, and movable property.
A family office is one of the best proven ways to preserve and protect family assets and pass them on to future generations. Over the past decades, more than 16,000 family offices have been formed worldwide, managing up to several trillion dollars.
As an example, we can cite well-known personalities who have chosen family offices as the most beneficial and safe tool for protecting wealth. These are the investment company Bezos Expeditions by Jeff Bezos and the holding structure Cascade Investment by Bill Gates.
A family office is a company that manages family values, property, finances, and other assets. The most relevant forms of business structures for family offices can be organized by our experts – holding, trust, foundation, and offshore company.
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on which jurisdiction is best for your business, preferred tax regime, company structure.
5 pillars of strength for a family office
Every successful family seeks to protect their assets and family values by choosing the most effective, safe, and profitable option for this. Today, such a tool is a family office, for which it is also desirable to have a backup plan B.
But, to avoid conflicts with regulators, tax authorities, and even within the family in the future, every family member needs to fulfill their mission in accordance with the goal, and organizational issues have to be resolved by experienced experts and lawyers. We advise you to study the five pillars of strength for organizing a family office.
1. Purposefulness
Each family, regardless of the number of members and stakeholders, needs to move towards a common goal. And this means that there should be a mission and obligations:
- Heritage and its planning.
- Managing family assets through companies, foundations, trusts, and other structures.
- Family relations and solidarity in opinions.
2. Family values
This is the fundamental basis not only for the family business but also for the relationships of future generations. Unity, joint work, and modesty in one’s achievements – this is what should be passed on from generation to generation.
3. Broad definition of value
Families that have achieved great success consider their offices and enterprises as centers for creating value, with subsequent support from several generations. The financial basis is only the first brick in building the entire family capital, but it is insufficient to achieve all the goals.
To receive, accumulate and transfer profit, it is required to correctly distribute it among shares, securities, and investment products. It is also necessary to have such products and qualities within the family as knowledge, intellectual property, reputation, talents, etc. Each family business member can contribute to the value of the entire family’s assets.
We advise you to always have a spare bank account for personal and corporate purposes, which can be opened with our expert assistance!
4. Designing a family business
A family business within a family office frame should be viewed as a portfolio of assets that are jointly owned. At the same time, each team member can choose their own direction for the development of the enterprise. This will allow to design a family business competently and adapt it to modern changes, technical innovations, and business areas. And this is very important when changing generations and the strategy for managing family capital.
5. Management of the family wealth
This point is especially important in modern realities when several bank accounts and investment portfolios will not always save you from ruin. At this stage, deciding how to properly manage family assets to reduce risks, gain protection and increase profits is essential.
Strategic management of the entire family capital is a complex task that requires high professionalism. In this case, we advise you to look at family offices through trusts, foundations, and offshore companies, which can be combined into a single chain and used for the benefit of the family.
We offer registration of a trust, offshore company, or foundation in the safest and most secure jurisdictions. Contact our specialists and get advice on creating a family office in Nevis, Panama, or Belize.
5 rules for building a secure family office structure
You don’t have to be a billionaire and have a huge capital to open a family office. Even if you have property worth more than USD 250 million, you should think about its safety and accumulation for your children and heirs.
The most important stage all families go through is the management of values. Here it is important not to make a mistake and to understand precisely what goal should be achieved as a result of the detailed and complex work of all family members.
To reap the financial returns and capital gains from owning and operating a family office, you need to work within the upfront guidance tailored to the individual family. To do this, we advise you to take into account five key points that will help you correctly set up a family office.
1. A solid basement for a family office
To form a basement, it is better to involve experienced lawyers, consultants, and accountants in cooperation. At the initial stage of starting a family office, it is essential to consider all the nuances of tax and general legislation, as well as properly structure investments and analyze risk areas and possible losses.
2. Wealth isolation and asset diversification
Keeping all the capital in one place and open access is not the best idea, which can end badly for your wealth. The most correct way out is to isolate family values from potential liabilities, which will be helped by trust structures for investments through an offshore subsidiary company. Of course, some personal belongings and assets will remain in the personal possession of family members. However, the bulk of the capital will remain out of reach for creditors, sanctions bans, and third parties.
3. Sustainable well-being in the long term
You should consider such a point as access to assets by the next generations for buying real estate and direct investments. As an option for the sustainable welfare of the family office, you can use the formation of several family enterprises under trust management. When one controlling generation passes away, tax costs are minimized, and heirs can continue the family business.
4. Creation and use of a management company
On this point, choosing a jurisdiction for managing family capital is essential. Panama, Nevis, Belize, and several other states remain the most beneficial and protected jurisdictions for these purposes.
5. Law and order
This is an important task in forming a family office since any enterprise can exist only if the established rules are observed. This point includes reporting, declaring profits (if necessary), bookkeeping, etc. This will protect the organization from unexpected obligations that may arise under different circumstances.
Thanks to an experienced team of professional consultants, we will help you organize a family office and maintain a dynamic structure with minimal risks and on favorable terms. Contact our experts and get an introductory consultation!
