What expertise should a multifamily office have for investing across foreign markets?
A multifamily office should combine investment judgment with local market knowledge, regulatory review, tax coordination, currency management, operational controls, and manager due diligence. The team should understand how each market handles ownership, reporting, settlement, custody, disclosure, sanctions, and investor protection before committing family capital.
Local market and regulatory knowledge
Foreign markets use different rules for ownership, disclosure, accounting, trading, settlement, custody, and investor protection. The office should have people who can identify these differences and verify that each proposed investment fits local requirements. The US Securities and Exchange Commission lists currency, political, economic, liquidity, and regulatory differences among the risks of international investing. SEC Investor Bulletin, International Investing
We want local counsel or established advisers who can explain licensing, ownership limits, repatriation rules, reporting duties, and enforcement practices. The office should document who is responsible for each review. A local contact can provide context, but the family office still needs independent verification and a clear approval process.
Tax, currency, and structuring expertise
Cross-border investing can create tax filings, withholding, reporting, and information-sharing obligations in more than one country. The OECD Common Reporting Standard calls for participating jurisdictions to obtain financial account information and exchange it automatically with other jurisdictions. OECD, Common Reporting Standard
A multifamily office should coordinate qualified tax advisers in the relevant countries. It should map cash flows, entity ownership, withholding, and exit proceeds before investing. Currency expertise also matters. The team should measure how exchange rates can change both returns and liquidity needs, then decide whether the exposure should remain open or be managed. That decision belongs in the investment policy and should be reviewed as exposures change.
However, what we’ve found consistently is that investors don’t invest based on promises of the highest returns. Instead, they invest in those they trust, who they understand, and who have unique edges and compelling offers.
Due diligence, operations, and risk controls
The office needs a repeatable process for evaluating foreign managers, companies, banks, custodians, and counterparties. Reviews should cover ownership, financial statements, valuation methods, conflicts, liquidity terms, service providers, cybersecurity, sanctions screening, and anti-money-laundering controls. The Financial Action Task Force provides global recommendations used by jurisdictions for customer due diligence, beneficial ownership, and suspicious transaction controls. FATF, International Standards on Combating Money Laundering
Strong operations support good decisions. We want independent reconciliation, clear authority limits, reliable reporting in the family’s base currency, and records that show why an investment was approved. External managers should explain how they handle local regulation, valuation, custody, and adverse events. This is general educational information. Families should obtain advice based on their own circumstances.
Related guides
- Family Office Due Diligence: A Practical Guide for Multifamily Offices
- Access to Alternatives Through an MFO: A Practical Guide for Families
- Cross-Border Families and Multifamily Offices: A Practical Guide