Many hubs offer tax incentives to family-managed funds. Benefits are real—so are guardrails.
What incentives target. Policymakers want professionalized wealth management at home: hiring analysts, appointing licensed managers, and documenting investment decisions. Incentives often exempt qualifying fund income if criteria are met (verify latest).
Typical criteria. Minimum AUM, local spending, qualified investments, and a governance framework (IC minutes, policies, custody). Family members acting as “managers” must meet experience thresholds in some rules.
Substance & conflicts. Incentives are not a license for round-tripping or related-party games. Trades with affiliates must be at arm’s length; management fees must make sense.
Operating model. Draft an IM policy, custodian agreements, and valuation handbook. Schedule quarterly IC meetings in the hub; keep deal memos and risk dashboards.
Audit readiness. Expect reviews of hiring, premises, and actual trade oversight. Failing audits can claw back benefits.
FAQ
- Can a mailbox qualify? No—headcount and governance are essential.
- Are crypto or private deals allowed? Often, with extra controls and custody standards.
Editor’s Note: Incentives reward professionalization—build the team and the paper first.
Tags: Family Office, Incentives, Substance, Fund Exemption