Family Office Services

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Family Office Services offered by Cheng & Co Trust Int'l Limited

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Family Office Services

  1. 1. Family Office Services Succession Planning and Wealth Management through Labuan Foundation 
  2. 2. Family Office Services What is family business and who requires family office services? 
  3. 3. Who requires Family Office services? Businesses involving one or more than one family is known as family business and family businesses typically requires Family Office services for wealth management purposes.
  4. 4. Family Office Services What are the typical problems encountered by family businesses? 
  5. 5. Typical problems encountered by family businesses…  Conflict of interest among family members  Lack of succession planning  Decrease in leadership drive  Flat growth to the company  Heirship
  6. 6. Family Office Services What is the typical structure of family businesses? 
  7. 7. Typical structure of family businesses… Founder (1st Generation) Immediate Members (2nd Generation) Extended Family (3rd Generation)
  8. 8. Family Office Services What does family office services cover? 
  9. 9. Wealth Planning Services Administrative Services Succession Planning Services Asset Management Family Office Services Risk Management Services Charity Services Trust Management Services Tax and Legal Services
  10. 10. Family Office Services Where do we start? 
  11. 11. Family Office Services First, set-up a Labuan Foundation… 
  12. 12. Labuan Foundation Succession Planning Services A Labuan Foundation will be set-up for company and family governance purposes under our Family Office services
  13. 13. Labuan Foundation Succession Planning Services Ownership issues will be also be taken care… Business will operate as usual… Family governance in place…
  14. 14. Family Office Services Use a Labuan Foundation instead of a Company or a Trust because… 
  15. 15. A Labuan Foundation is a combination of Company and a Trust… Foundation is like a hybrid structure of a company and a trust
  16. 16. You get the best of both world… A Company has the flexibility to change its structure by passing a board resolution… A Trust provide asset protection by segregate personal asset and business risks... A Labuan Foundation has both the characteristics of a Company and Trust…
  17. 17. Family Office Services Setting up a Labuan Foundation… 
  18. 18. Labuan Foundation requires the following key personnel…  Founder * Founder can act either as council member or officer  Council Member  Officer * Officer should not be related to council member  Secretary  Beneficiary
  19. 19. Family Office Services Optimizing ownership with Labuan Foundation… 
  20. 20. Optimization of Ownership…  Wealth creation & protection  Risk diversification  Liquidity management  Leverage
  21. 21. Family Office Services Benefits to your business using Labuan Foundation… 
  22. 22. Business…  Wealth creation & protection  Enhanced company value protection  Mitigation of intergeneration conflicts  Balance asset & liability management  Additional source of wealth & income
  23. 23. Family Office Services Benefits to your family using Labuan Foundation… 
  24. 24. Family…  Family culture & values  Family governance  Compensation schemes  Wealth preservation  Succession planning  Risk assessments & profiles  Individual financial & tax planning objectives
  25. 25. Sucession Planning Do you have in mind who will be the next key personnel? 
  26. 26. Succession Planning: Key values for determination of the next leader… Characteristics (initiative, creative thinking)
  27. 27. Succession Planning: Key values for determination of the next leader… Behavior (integrity, commitment)
  28. 28. Succession Planning: Key values for determination of the next leader… Competency (knowledge, skills, talents, experience, abilities)
  29. 29. Succession Planning: Key values for determination of the next leader… Strategic thinking (Dynamic, tactical, enterprising, entrepreneurial)
  30. 30. Succession Planning: Key values for determination of the next leader… Relationship / Network building (Charisma, diplomatic, team player, cooperative)
  31. 31. Labuan Foundation Structure of Labuan Foundation (Non-charitable) 
  32. 32. Labuan Foundation Manage Transfer of Assets Manage Manage Distribution The structure of a non-charitable private foundation
  33. 33. What if the Foundation is established for charitable purposes? If the Foundation solicits funds/donations from the public….three (3) additional personnel shall be required…
  34. 34. Labuan Foundation Structure of Labuan Foundation (Charitable) 
  35. 35. Charitable Foundation Manage Transfer of Assets Additional Personnel Manage Manage Distribution
  36. 36. Labuan Foundation Example of restructuring Labuan Foundation into a family business… 
  37. 37. Family business owned by 3 brothers before restructuring… Shareholders 55% Local Company Business Operations 30% 15%
  38. 38. Labuan Foundation First step of restructuring… Set-up a separate Labuan Foundation for each family… 
  39. 39. Labuan Foundation for Mr A family Manage Transfer of Assets Manage Manage Distribution For each family, set up a private foundation…
  40. 40. Labuan Foundation for Mr B family Manage Transfer of Assets Manage Manage Distribution For each family, set up a private foundation…
  41. 41. Labuan Foundation for Mr C family Manage Transfer of Assets Manage Manage Distribution For each family, set up a private foundation…
  42. 42. Labuan Foundation Then, set-up a main Labuan Foundation for each Family Foundation… 
  43. 43. Proposed Structure 55% 30% Controlling Stakes 15%
  44. 44. Contact us for more information… 
  45. 45. Cheng & Co Trust International Limited Telephone: +603-79848988 | Fax: +603-79844402 Website: www.chengcotrust.com | e-mail: info@chengcotrust.com Kuala Lumpur Office: No 16-G, Jalan 2/114, Kuchai Business Centre, Off Jalan Klang Lama, 58200 Kuala Lumpur Labuan Office: Lot 2(a), Level 4, Wisma Lazenda, Jalan Kemajuan, PO Box 81840, 87000 Labuan FT www.chengcotrust.com 

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