Setting up a family office in South Africa is a significant undertaking, best approached with careful planning, clear goals, and professional support.
With the right structure and governance, a family office can help safeguard and grow family wealth, support philanthropic ambitions, and provide stability for future generations.
In this guide, we will discuss how to start a family office in South Africa. This includes the processes, costs, and other implications involved.
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What is a family office in South Africa?
In South Africa, a family office functions similarly to those in other countries, but must also comply with local laws and regulations.
A South African family office is typically set up by a wealthy family to oversee their finances, investments, and personal affairs.
This is done with a strong focus on preserving wealth across generations.
Services provided by family offices in South Africa often include:
- Investment management and financial planning
- Tax compliance and optimization, including understanding local and international tax rules
- Estate and succession planning, often involving the creation of trusts and family constitutions
- Philanthropy and social investment
- Family governance, such as organizing family councils and drafting family charters
- Coordination of family events and personal matters
Starting a family office in South Africa may also involve working with government agencies, such as the Department of Home Affairs.
This could be probable for matters related to citizenship, identification, and legal documentation.
Families typically engage both in-house and external experts to provide the necessary accounting, legal, and investment services.
How does a family office work in South Africa?
A family office is a private firm that manages the wealth and personal affairs of an ultra-high-net-worth family.
Unlike traditional financial advisors or banks, a family office offers a broad range of services, all tailored to the specific needs of the family.
Family offices usually employ a team of professionals who work together to create a comprehensive plan for the family’s financial and personal goals.
The team’s job is to ensure that the family’s wealth is preserved and grown across generations and that all aspects of their financial life are coordinated smoothly.
This holistic approach helps families navigate the complexities of significant wealth and maintain their legacy for future generations.
In general, there are two main types of family offices:
- Single-family office (SFO): Serves one family exclusively.
- Multi-family office (MFO): Serves several families, allowing them to share costs and resources.
In South Africa, family offices must comply with local tax laws and regulations.
This includes the recent requirement to disclose beneficial ownership of assets, effective from 1 April 2023. Non-compliance can result in significant penalties.
Family offices in South Africa are also subject to the FIC Act, which mandates the implementation of measures to prevent money laundering and terrorist financing.
This includes conducting due diligence on clients and reporting suspicious transactions.
Why set up a family office in South Africa
Family offices in South Africa deliver a bespoke, integrated suite of wealth-management services tailored to ultra-high-net-worth families’ unique objectives.
They embed robust governance and risk-management frameworks compliant with the Financial Intelligence Centre Act.
Thus, they are effective in safeguarding assets from regulatory, market, and operational threats.
Tax efficiency is achieved through specialized trust structures under the Trust Property Control Act, granting clarity on beneficial ownership and preferential SARS treatment.
Improved digital eFiling processes enable timely, accurate tax reporting before the January 20 deadline, reducing administrative burden and penalties.
Family offices facilitate structured succession planning and formal family constitutions, ensuring seamless leadership transitions and preservation of legacy values.
Centralized philanthropic management aligns charitable and impact-investing strategies with family values while ensuring compliance and maximizing social returns.
By combining local expertise with global best practices, families gain access to specialized resources and international networks through a single point of contact.
Dedicated confidentiality protocols and cybersecurity measures protect sensitive information, a critical consideration for public figures and high-profile families.
As South African ultra-high-net-worth populations grow and private wealth in Africa is projected to increase 30% by 2030, the demand for family offices is accelerating.
Consolidating asset classes and advisory services within one infrastructure delivers economies of scale and significant cost efficiencies compared to traditional advisory models.
How much money do I need to have a family office in South Africa?
There is no fixed amount of capital required to start a family office, but it is generally recommended for families with significant wealth.
Globally, families typically consider setting up a dedicated family office when their assets exceed $100 million (about R1.8 billion as of early 2025).
This is because the costs of running a family office can be substantial.
However, in South Africa and across Africa, the threshold may be lower, depending on the family’s needs and the complexity of their assets.
Some families may start considering a family office structure with assets of around $30 million (about R540 million).
Especially if their wealth is spread across multiple businesses, properties, or jurisdictions.
The costs of running a family office can include:
- Salaries for staff – investment managers, accountants, lawyers, administrators
- Office space and technology
- Legal and compliance costs
- External advisory fees for tax, legal, or investment advice
Multi-family offices, which serve several families, can be more cost-effective, as costs are shared among clients.
Setting Up a family office in South Africa
Starting a family office in South Africa involves several key steps. Here’s a simplified guide:
1. Define your goals and needs
Clarify what you want the family office to achieve, e.g., investment growth, legacy planning, philanthropy.
Decide what services you need like investment management, tax, legal, lifestyle, etc.
2. Establish family governance
Create a family constitution or charter to outline the family’s values, goals, and rules for decision-making.
Set up a family council or regular meetings to facilitate communication and resolve conflicts.
3. Choose the right structure
Decide whether you need a single-family office serving only your family or a multi-family office, sharing resources with other families.
Consider the legal structure: many family offices use trusts, companies, or foundations to hold assets and manage operations.
4. Assemble your team
Hire or contract professionals: investment managers, accountants, lawyers, and administrators.
Decide which services will be handled in-house and which will be outsourced.
5. Register and comply with regulations
Register any companies or trusts with the Companies and Intellectual Property Commission (CIPC) or Master of the High Court, as required.
Ensure compliance with South African tax laws, exchange control regulations, and financial reporting requirements.
Obtain necessary identification and documentation for all family members from the Department of Home Affairs.
6. Set up processes and systems
Implement accounting, reporting, and investment management systems.
Establish policies for risk management, spending, and investment decisions.
7. Review and adapt
Regularly review the family office’s performance and adapt to changes in family needs, laws, or markets.
Professional advice from lawyers, accountants, and family office consultants is essential throughout the process to ensure compliance and optimal structure.
Do family offices make money in South Africa?
Family offices are not usually profit-seeking businesses in the traditional sense; their main goal is to preserve and grow the family’s wealth.
However, they do generate income through investment management and, in the case of multi-family offices, by charging fees to clients.
Typical ways family offices make money or add value:
- Investment returns: By managing the family’s investments (stocks, real estate, businesses), the family office aims to generate returns that grow the family’s wealth.
- Fees for MFOs: Multi-family offices may charge a percentage of assets under management (AUM), usually between 0.25% and 1.5%, or performance-based fees if they outperform certain benchmarks.
- Cost savings: By centralizing services and leveraging professional expertise, family offices can reduce tax liabilities, avoid costly mistakes, and negotiate better deals.
Single-family offices do not usually earn external revenue; their purpose is to efficiently manage the family’s assets and affairs.
What are the disadvantages of a family office in South Africa?
While family offices offer many benefits, there are also some disadvantages to consider:
- High costs: Setting up and running a family office requires significant capital. Staff salaries, office expenses, and professional fees can be substantial, especially for single-family offices.
- Complexity: Managing a family office involves navigating complex legal, tax, and regulatory environments, which can be overwhelming without expert advice.
- Governance challenges: Family dynamics and conflicts can make decision-making difficult, especially when multiple generations are involved. Poor governance can undermine the family office’s effectiveness.
- Privacy and security risks: Centralizing sensitive information and assets can make the family a target for cybercrime or fraud if proper safeguards are not in place.
- Limited scalability: Single-family offices may lack the economies of scale that multi-family offices enjoy, making them less cost-effective for families with smaller asset bases.
- Regulatory compliance: South African laws regarding trusts, companies, and taxes are complex and subject to change. Non-compliance can result in penalties or legal issues, so ongoing attention to regulation is required.
Despite these challenges, a well-structured family office can provide peace of mind, continuity, and professional management, helping families preserve their wealth for generations.
Conclusion
Establishing a family office in South Africa empowers ultra-high-net-worth families with a unified platform for managing their financial, legal, and personal affairs.
By integrating investment management, tax planning, governance, and philanthropy under one roof, these offices boost operational efficiency, preserve generational legacy, and mitigate multifaceted risks.
Technological enhancements simplify compliance, while formal succession frameworks ensure continuity.
With regional private wealth on the rise and regulatory demands tightening, a thoughtfully structured family office is becoming indispensable.
Families considering this model should partner with seasoned advisors to develop tailored solutions that reflect their distinctive goals and values.
Pained by financial indecision?
Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
