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黑暗中的沙漠

What is a Family Office? What are the Requirements for Setting Up One in Hong Kong?

家族辦公室

In March and May 2023, the Hong Kong government announced a series of policy measures and tax incentives to offer profit tax reductions for family investment control tools managed by single-family offices. These measures are designed to attract more high-net-worth families to Hong Kong, further enhancing Hong Kong's competitiveness as an Asian wealth management center.


The CEO of UBS Group stated:

"The wealth management business in Hong Kong is growing at a rate of 7.6% annually, and it is expected that Hong Kong will surpass Switzerland and become the world's leading wealth management center by 2027 or earlier."
 

Origin of Family Offices


The family office (FO) originated in the 19th century and was first created by the Rockefeller family, the American oil magnates.


Top 10 Family Offices Globally

Rank

Family Office

Total Assets (USD)

Representative Figures or Companies

1

Walton Enterprises LLC

224.5 billion

Walmart founder Sam Walton

2

Cascade Investment

170 billion

Microsoft founder Bill Gates

3

Bezos Expeditions

107.8 billion

Amazon founder Jeff Bezos

4

Bayshore Global Management

100 billion

Google co-founder Sergey Brin

5

Pontegadea Inversiones

97.8 billion

Zara founder Amancio Ortega

6

Mousse Partners

89 billion

Chanel family

7

Ballmer Group

85 billion

Former Microsoft CEO Steve Ballmer

8

Waycrosse

65.2 billion

Cargill family (grain magnates)

9

Fedesa

55 billion

Ferrero Group Giovanni Ferrero

10

The Woodbridge Company

53.9 billion

Media tycoon Roy Thomson

With the rapid growth of ultra-high-net-worth families and their unique service advantages, this service model has become increasingly popular among ultra-high-net-worth families globally.

 

What is a Family Office?

風險管理

A family office is an advisory organization that provides comprehensive wealth management and other professional services to wealthy families. Its core goal is to create wealth management plans that ensure the long-term maintenance of family interests and sustainable wealth growth.


Compared to traditional wealth management institutions, family offices offer a broader and more refined range of services, covering the following areas:


  1. Family Governance

  2. Financial Planning

  3. Legal Consulting

  4. Risk Management

  5. Accounting and Tax Planning

  6. Philanthropy Management


Through a one-stop service, family offices can fully meet the needs of clients in wealth management, legacy planning, and other areas.

 

Types of Family Offices


Family offices can be primarily divided into two types based on their service objects and operating models:


Single-family office, SFO

Multi Family Office, MFO

Service Object

  • Single high-net-worth family

  • Multiple high-net-worth families

Setup Method

  • Set up by the family itself, hiring investment managers, accountants, lawyers, and other professionals to form an independent team

  • Developed from a single-family office that attracts other family clients; operated by licensed financial institutions like banks or securities firms

Charging Model

  • Direct salary and bonus payments to team members

  • Asset management fees or advisory fees based on services provided

Advantages

  • Highly personalized service, flexible to family’s specific needs; higher privacy

  • Lower operating costs, more economic efficiency; offers more investment opportunities

Disadvantages

  • Higher operating costs

  • Lower privacy, less flexibility, and cannot offer highly customized services

 

Threshold for Family Offices in Hong Kong


  • Minimum asset threshold: HKD 240 million

  • At least two full-time employees with relevant experience

  • Annual management fees of about HKD 2 million

  • Annual reporting required

  • Physical management and control must be conducted in Hong Kong

  • The number of entities managed cannot exceed 50


For middle-class families, besides focusing on wealth inheritance, they also need to consider asset appreciation, children’s education savings, and retirement planning. As long as they have a certain asset size, clear wealth management goals, or a family business to manage, they can consider using family office services.

 

Conclusion


As an economic hub in Asia, Hong Kong has the following advantages, making it an ideal choice for global family offices:

 

  1. A well-established business environment

  2. Low tax rates and tax incentives

  3. Highly liquid financial market network

  4. World-class infrastructure

  5. Sound legal system

  6. Abundant high-end financial and legal professionals


If you are planning to set up a family office, feel free to contact Oceanus Strategic. Our team will provide professional advice. We will publish more interesting articles in the future, so remember to subscribe to our official account to stay updated with the latest news.

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