Cross-Border Families and Multifamily Offices: A Practical Guide
Families with homes, businesses, trusts, and investments in several countries face coordination problems that a single-country advisory model may miss. A multifamily office can help organize information, align specialists, and create a repeatable decision process. This guide explains what cross-border families should ask, how to assess a multifamily office, and where common reporting and governance issues arise.
Why cross-border families need a coordinated operating model
A cross-border family may have a company in one country, a residence in another, investment accounts in several markets, and family members who move for work or education. Each fact can affect reporting, cash movement, estate planning, insurance, and investment administration.
The practical problem is often fragmentation. A local accountant may understand one tax system. A private bank may know one booking center. A lawyer may focus on one trust or entity. The family still needs one current view of ownership, liquidity, obligations, and decision rights.
A multifamily office, or MFO, can serve as the coordination layer. It may provide investment oversight, financial planning, reporting, manager selection, bill payment, family governance support, and access to outside legal and tax specialists. The MFO does not replace licensed professionals in every country. Its value is making sure the work fits together.
Our directory contains 1,760 multifamily office records. Of those, 292 have published SEC Form ADV data captured in the directory. Among those SEC ADV firms, 279 report portfolio management for individuals or small businesses, 207 report financial planning, and 213 report selecting other advisers. These figures describe firms in our directory and their reported services. They do not measure the entire global market. Source: MultifamilyOffices.com directory, SEC Form ADV filings as captured by the directory.
The first task is building a complete family balance sheet
Cross-border work starts with facts. The family should create a controlled inventory of people, entities, accounts, real estate, private investments, insurance policies, trusts, foundations, loans, guarantees, and digital assets.
For each item, record legal owner, beneficial owner, jurisdiction, currency, custodian, valuation date, income stream, debt, liquidity terms, reporting forms, and the person responsible for updates. Keep supporting documents in a secure repository with an audit trail.
Ownership often matters more than location. A property may sit in one country but be owned by a company elsewhere. A trust may have trustees and beneficiaries in different jurisdictions. A family business may create personal guarantees or concentrated risk that does not appear in an investment account statement.
The inventory should also distinguish family capital from operating capital. A founder may have a large company position, related-party loans, deferred compensation, or a pending sale. Treating all of that as a normal portfolio can produce the wrong liquidity plan.
An MFO should refresh the inventory on a defined schedule and after events such as marriage, divorce, death, relocation, a new business, a financing, an inheritance, or a change in tax residence.
The families that make the most progress each year are crystal clear on their values, mission, objectives, and story of where they are headed and why.
Tax residence, citizenship, and reporting are separate questions
Families often use the words residence, domicile, citizenship, and tax residence as if they mean the same thing. They do not. Each country applies its own tests, and a person can have obligations in more than one country during a year.
The United States applies citizenship-based taxation. A U.S. person with foreign accounts may have to file a Report of Foreign Bank and Financial Accounts, commonly called an FBAR, when the aggregate value of reportable foreign financial accounts exceeds $10,000 at any time during the calendar year. That threshold and requirement are stated by FinCEN and the IRS. Source: FinCEN, Report Foreign Bank and Financial Accounts.
Certain U.S. taxpayers must also report specified foreign financial assets on Form 8938 under FATCA. The filing thresholds depend on filing status and whether the taxpayer lives in the United States or abroad. The IRS states that the threshold can begin at $50,000 for some taxpayers, with higher thresholds for others. Source: IRS, Summary of FATCA reporting for U.S. taxpayers.
The family should not assume that an account producing no income is irrelevant. The FBAR rules focus on the existence and value of qualifying foreign accounts, not only on taxable income. The IRS also requires foreign-currency amounts to be converted into U.S. dollars using the applicable method described in its guidance.
Outside the United States, the OECD Common Reporting Standard supports automatic exchange of financial account information between participating tax authorities. Financial institutions collect residence and account information and report through their local authority under the applicable rules. Source: OECD, Common Reporting Standard.
An MFO should maintain a calendar of filing dates, information requests, entity renewals, and document delivery deadlines. The MFO can coordinate the process, while qualified tax professionals determine what must be filed.
How an MFO can organize specialists across jurisdictions
The strongest operating model gives each specialist a clear role. A lead relationship manager or family office chief operating officer can maintain the master plan. Local tax advisers handle country-specific filings. Estate lawyers draft and review legal instruments. Investment advisers manage portfolios within their mandate. Banks and custodians execute transactions. Insurance advisers review coverage. The MFO connects the work and tracks open decisions.
Use a written responsibility matrix. It should show who prepares each deliverable, who reviews it, who approves it, and who receives the final version. Include escalation rules for missed deadlines, unusual transactions, cybersecurity incidents, and conflicts of interest.
Families should ask whether the MFO is acting as an investment adviser, a coordinator, a bill-paying service, a trustee, or some combination. Those roles carry different duties, contracts, and controls. Review the engagement letter and fee schedule carefully.
For U.S. registered investment advisers, Form ADV provides public information about ownership, business activities, clients, compensation, conflicts, and disciplinary history. The SEC explains that registered advisers file Form ADV through IARD and deliver a brochure describing their services and practices. Source: SEC, Form ADV and IARD frequently asked questions.
It is important to not let your highly paid CIO, influential board member, or other family offices dictate your investment mandate. Those individuals can help provide input and a roadmap on how to get from A to B, but your objectives, mission, and values should tell you where “B” is for you and your family or the family you are serving.
Comparing fees and services in the MFO market
Fee structures vary. In our directory sample of 292 firms with published SEC ADV data, 289 report a percentage of assets under management as a fee type. The same firms report fixed fees 209 times, performance-based fees 110 times, hourly fees 95 times, and other fee types 41 times. A firm can report more than one fee type, so these counts should not be added as market shares. Source: MultifamilyOffices.com directory, SEC Form ADV filings.
Ask for the total cost of the relationship. Include advisory fees, custody charges, fund expenses, manager fees, performance allocations, banking fees, legal work, tax work, insurance commissions, foreign-exchange spreads, and transaction costs. Request examples showing how fees apply to public securities, private funds, operating companies, cash, and real estate.
Our directory shows a wide range of reported assets under management among the 292 SEC ADV firms. The 25th percentile is about $358 million, the median is about $921 million, the 75th percentile is about $3.08 billion, and the maximum is about $117.5 billion. These are reported ADV figures captured by the directory, not independently audited totals. Source: MultifamilyOffices.com directory.
Size alone does not determine fit. A smaller MFO may provide senior attention and a narrow service model. A larger MFO may offer broader staffing, technology, and geographic coverage. Compare the actual team assigned to the family, not only the firmwide assets.
Investment governance for families with several currencies
Cross-border families need an investment policy that states the purpose of each pool of capital. Separate near-term spending, taxes, debt service, and commitments from long-term capital. Set target currencies for expected expenses. Define acceptable cash buffers and the process for approving currency conversions.
The policy should address concentration in a family business, home-country assets, private companies, real estate, and employer stock. It should also state how the family treats illiquid commitments, capital calls, and unfunded guarantees.
Use one reporting currency for consolidated reports, while preserving local-currency values and exchange rates. Show the effect of market performance separately from currency movement. A portfolio can gain in local terms and lose in the family’s reporting currency, or the reverse.
Manager selection should include operational due diligence. Confirm custody, valuation procedures, liquidity terms, audit arrangements, regulatory status, conflicts, and key-person risk. For private investments, record subscription documents, side letters, capital-call notices, and distribution records in the central system.
Governance, privacy, and succession
A family constitution or governance charter can define who receives information, who votes on shared assets, how expenses are allocated, and how disputes are handled. Keep the document practical. It should support decisions the family actually faces.
Create separate access levels for family members, employees, advisers, trustees, and vendors. Use multifactor authentication, encryption, device controls, and clear procedures for changing permissions. The MFO should document how it verifies payment instructions and handles requests sent by email.
Succession planning should include both wealth and authority. Identify who can approve investments, sign for entities, appoint or remove trustees, access records, and communicate with banks. Test the plan with a simulated absence or emergency. A plan that exists only in a binder may fail when the family needs it.
The family should also decide what information younger members receive and when. Education can cover budgeting, investing, philanthropy, privacy, and responsible use of credit. The goal is informed participation, not forced agreement.
A practical selection process for an MFO
Start with a written scope. List countries, family members, entities, assets, services, reporting needs, and expected decision cadence. Ask each candidate to identify the work it performs directly and the work it delegates.
Request regulatory records and Form ADV where applicable. Investor.gov advises investors to review an adviser’s relationship summary and Form ADV brochure and to ask about conflicts that may affect advice. Source: Investor.gov, Investment Advisers.
Interview the proposed service team. Ask how many families each senior professional serves, who covers during holidays, how the firm handles a new country, and how quickly it can produce a consolidated report. Request a sample report with sensitive information removed.
Check references that resemble your family in complexity. Ask references about billing accuracy, responsiveness, staff turnover, reporting quality, and the handling of mistakes. Review termination rights, data portability, record retention, confidentiality, and transition assistance before signing.
Set a 90-day implementation plan. The first phase gathers documents and confirms ownership. The second phase builds reporting and calendars. The third phase tests controls, agrees on meeting cadence, and records unresolved decisions. Review the relationship at least annually.
Key takeaways
- Build one current inventory of people, entities, accounts, property, obligations, and advisers.
- Treat tax residence, citizenship, domicile, and account location as separate facts requiring specialist review.
- Use an MFO as a coordination layer with written roles, deadlines, approvals, and escalation rules.
- Compare total costs and actual assigned staff, not only assets under management or brand size.
- Document investment, privacy, succession, and emergency procedures before a major family event occurs.
FAQs
What does a multifamily office do for a cross-border family?
It can coordinate investment management, financial planning, reporting, manager selection, bill payment, governance support, and outside legal and tax specialists. The exact scope depends on the engagement.
Does having a foreign bank account automatically create a U.S. filing requirement?
Not always. U.S. persons may have an FBAR requirement when the aggregate value of qualifying foreign accounts exceeds $10,000 at any time during the year. Other forms, including Form 8938, use different rules and thresholds. A qualified tax professional should assess the facts.
How should a family compare MFO fees?
Ask for every direct and indirect cost, including advisory fees, custody, fund expenses, performance fees, legal and tax work, insurance compensation, foreign-exchange costs, and transaction charges. Request examples for each asset type.