Premise: these are layers, not alternatives
A trust is a legal tool for holding assets, a family office is an institution for managing them and a private bank is a service provider for custody and execution. In practice the common combination is a family trust holding an investment holding company (the FIHV), managed by the family's single family office, with assets held at one or more private banks. The table compares five structures on the same dimensions to show what each layer carries and what it costs, not to pick one.
Comparison table
| Dimension | Single family office | Multi-family office | Virtual family office | Trust holding directly | Private-bank account |
|---|---|---|---|---|---|
| Clients | One family | Several families | One family | One family's beneficiaries | Individual or corporate clients |
| Who decides investments | The family's own team | The office's professionals, family as client | Each outsourced provider; a coordinator aggregates | The trustee (may appoint an investment manager) | The bank (discretionary) or the client (advisory) |
| Control | Strongest | Medium: customisable within the office's process | Diffuse: nobody owns the whole balance sheet | Trustee holds legal title; family influences via protector and letter of wishes | Weak: products and execution set by the bank |
| Fixed cost | Highest: staff, premises, compliance | Medium: asset-based or fixed annual fee | Low: per-service charges | Trustee annual fee (often asset-based) plus set-up | Low: embedded in product and account fees |
| SFC licence | Generally not needed for a genuine single family office (three-factor test) | Required for the regulated activities carried on | Not for the structure; each provider is licensed | Trustee providing trust services as a business needs a TCSP licence | Bank is licensed |
| Vehicle eligible for the tax concession | Yes, if 95% family-owned, managed in Hong Kong and substance tests met | Not under current rules (extension under study, July 2025) | No: no eligible single family office exists | A trust can be the vehicle, but it must still be managed by an eligible single family office | No |
| Governance function | Can host the family council, run the charter and train the next generation | Can advise on governance, but is not the family's own institution | None | Deed and protector supply distribution rules, not deliberative bodies | None |
| Suitable scale | Assets large enough to absorb fixed cost; HK$240 million is the statutory floor for the concession | Families below self-built scale that need professional management | Listed securities and cash, family willing to coordinate | Any scale, though fees weigh on small trusts | Any scale |
| Exit difficulty | High: disband team, move assets | Medium: terminate the service agreement | Low | High: a trust is hard to unwind | Low |
Reading the table
Control and cost rise together because control comes from having one's own people. Licensing depends on for whom and in what manner services are provided: the SFC's three-factor test for single family offices, full licensing for multi-family offices, a trust or company service provider licence for trustees acting as a business. Only the single family office combination opens the concession, because its conditions sit at three layers at once: the family's 95% ownership, the vehicle's management in Hong Kong with HK$240 million and substance, and an eligible single family office that is itself 95% family-owned and managed in Hong Kong. Governance is a function only trusts and family offices provide; private-bank accounts and virtual offices solve execution, not what happens when the founder is absent.
Exit difficulty sets the cost of trial and error. A sensible sequence is to start with a private-bank account and a coordinator while the family writes its charter and shareholders' agreement, settle a trust for core assets once consensus has formed, and build a physical office and assess the concession when both scale and family will are stable. Doing it in reverse, building an office for the concession and back-filling governance later, is the failure mode this site's scenarios return to repeatedly.
Sources and dates
- Licensing obligations of family offices (FAQ) — Securities and Futures Commission (SFC) · 2020-09-08
- Tax Concessions for Family-owned Investment Holding Vehicles — Inland Revenue Department (IRD) · current version
- LCQ9: Promoting the establishment of family offices in Hong Kong — Financial Services and the Treasury Bureau (FSTB) · 2025-07-30
Cite this page
You may quote this page freely; please keep the source and date. Suggested format:
Family Office Governance Review Editorial (2026). “Single, Multi and Virtual Family Offices Compared with Trusts and Private-Bank Accounts.” familywealth.hk. https://familywealth.hk/en/compare/ (accessed YYYY-MM-DD).