About Us
Global Law Experts Logo
Global Law Experts Logo

Find a Global Law Expert

Practice Area


Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.

SFO Legal Structures and Framework

posted 1 month ago

The formation of a Single Family Office (SFO) is often driven by the desire to centralize the management of a family’s wealth, assets, and other financial responsibilities.

This entails careful consideration of the legal structures and frameworks that govern its operations.

The optimal legal structure of an SFO may vary based on several factors, such as the family’s objectives, the jurisdictions involved, regulatory compliance, tax planning, and risk management.

Below we explore the primary legal structures often utilized by SFOs and the essential considerations in each approach.

1. Corporations: Many SFOs are structured as corporations. This legal entity offers limited liability protection to the family members, thereby safeguarding personal assets from business liabilities.

Corporations are subject to specific regulatory guidelines and may be required to disclose certain financial information.

They may also be subject to double taxation, where profits are taxed at both the corporate level and the shareholder level when dividends are distributed.

2. Limited Liability Companies (LLCs): LLCs are a popular choice for SFOs as they provide limited liability protection while offering more flexible management and governance structures.

An LLC allows profits and losses to pass through to the members’ personal tax returns, thereby avoiding double taxation.

The operating agreement of an LLC can be tailored to the unique needs and objectives of the family, making it a highly adaptable option.

3. Partnerships: A partnership structure, whether a general partnership (GP) or a limited partnership (LP), can be used to create an SFO.

In a GP, all partners have equal rights and responsibilities, while in an LP, limited partners have reduced control but also limited liability.

This structure may be suitable for families that want to involve different generations or branches in the management of the SFO.

4. Trusts: Trusts, particularly family trusts, can be used to form an SFO, providing specific benefits in terms of asset protection, estate planning, and confidentiality.

By placing assets within a trust, the family can maintain control while ensuring a structured distribution to beneficiaries.

Trusts can be designed to meet the unique goals of the family and provide robust protection against creditors.

5. Hybrid Structures: Sometimes, a combination of the above structures may be employed to create a bespoke solution that aligns with the family’s specific objectives and requirements.

Hybrid structures can offer the advantages of various legal entities while mitigating some of their drawbacks.

6. Jurisdiction Considerations: The choice of jurisdiction for establishing an SFO has significant implications. Different countries and states have unique legal, regulatory, and tax environments.

The decision must factor in the domicile of the family members, the location of assets, and the applicable laws governing financial services and privacy.

7. Compliance and Regulation: Compliance with the applicable laws and regulations is paramount in any legal structure.

SFOs must navigate complex regulatory landscapes that include anti-money laundering (AML) rules, securities regulations, and tax obligations.

Engagement with legal and regulatory experts is often necessary to ensure full compliance and minimize legal risks.

In conclusion, the legal structure of an SFO is a multifaceted decision that requires careful consideration and tailored solutions.

There is no one-size-fits-all approach, and families must weigh the benefits and drawbacks of different structures in light of their unique circumstances, goals, and risk profiles.

By understanding the essential features of each legal entity and working closely with legal, tax, and financial experts, an SFO can be structured to provide optimal benefits in terms of asset protection, governance, flexibility, and tax efficiency.

For more in-depth information you can consult my latest book «The Global Manual for Family Offices», Volume 1, Chapter 2.2, Pg. 79.


Find the right Legal Expert for your business

The premier guide to leading legal professionals throughout the world

Practice Area
0 m+


who are already getting the benefits

Sign up for the latest legal briefings and news within Global Law Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.

Naturally you can unsubscribe at any time.

Newsletter Sign Up

About Us

Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.

Contact Us

Stay Informed

Join Mailing List