Embedded family office
corporate family office
Other languages: Deutsch · Français · Español
A family office function located within the family business: employees of the company look after the family's private wealth alongside their regular work.
The model is inexpensive but carries risks regarding confidentiality, conflicts of interest and tax, because services to the family must be charged at arm's length.
In practice
An embedded family office can be set up quickly but carries typical risks: conflicts of interest between the company and the family, unclear allocation of costs and access by employees to the family's private data. In practice, a clear separation of systems and permissions, a documented charge for services at market prices and separate reporting on the private wealth help. As the wealth or the family grows, moving to an independent family office is often the next step.
Distinctions and common mistakes
Services that the company provides to the family free of charge can be treated as hidden profit distributions for tax purposes. A common mistake is to give company employees access to private family data without separate permissions and confidentiality rules.
Relevant in: Switzerland · Germany · Austria
Related terms
- Single family office
- An organisation that manages exclusively the wealth and affairs of a single family.
- Virtual family office
- A family office with a small core that coordinates and oversees external specialists such as portfolio managers, tax advisers and trustees.
Mentioned in these guides
- What is a family office?What a family office is, what it does, how single and multi family offices differ and when a family needs one – a clear, sourced overview.
- Embedded family office: run from within the family businessWhat an embedded family office inside the family business is, its benefits, and the confidentiality, tax and governance risks that need to be managed.