Explore the vital role of family office lawyers that provides comprehensive legal solution for high-net-worth families in Malaysia.

Target Country: 

Malaysia (British English)

What Does a Family Office Lawyer Do?

Family offices in Malaysia serve as private wealth management firms that cater to high-net-worth families. A family office may serve either one family or multiple families, hence there are both Single-Family Offices (SFOs) and Multiple-Family Offices (MFOs). Their services include providing a variation of regulatory compliance, contract drafting, tax planning, estate planning, fund management and philanthropy. Family office lawyers provide legal services to family offices to facilitate the efficient and legally compliant structuring and operations of the family offices’ businesses. To further understand what a family office lawyer does in Malaysia, here’s a list of core responsibilities that are carried out by them.

Core Responsibilities of a Family Office Lawyer

• Legal Structuring and Documents Drafting: Family office lawyers will aid in the establishment and structuring of family offices, including for SFOs and for MFOs. This includes providing advice regarding the appropriate legal structures, such as they will advise on appropriate legal structures, such as Limited Liability Partnerships (LLPs) or Private Limited Companies (Sdn Bhd), and draft necessary documents like Investment Management Agreements and Trust Deeds. To add, in Malaysia, family offices can be established as private limited companies regulated by the Companies Act 2016, which must be registered with the Companies Commission of Malaysia (CCM). Family members or designated family holding companies can be shareholders, enjoying limited liability protection. Family members or appointed professionals can serve as directors, leveraging their expertise in private wealth management.

• Tax Compliance and Exemptions: Family office lawyers guide family offices on tax planning strategies and help navigate the tax exemptions available under the Malaysian Income Tax Act 1967. With the recent introduction of the Family Office Incentive Scheme by the Securities Commission Malaysia (SC), which offers a 0% tax rate incentive on income from eligible investments through Single Family Office Vehicles (SFOV), family office lawyers will assist in applications for these incentives and liaise with the Inland Revenue Board of Malaysia (IRBM) to ensure compliance.

Regulatory Compliance

Family office lawyers carries a crucial responsibility of ensuring that the family offices do in fact comply with the regulatory requirements set by Malaysian authorities. Due to this nature of work, they always stay updated on regulatory changes to ensure they provide the family office the best advice and adjust their legal structure accordingly.

To comply with the overall guidelines, a family office lawyer can help family office business with the following:

• Licensing Requirements: Family office lawyers handle licensing issues, including applications for licenses under the Capital Markets and Services Act 2007. They ensure that the family office meets specific criteria for exemption or licensing from the SC. This is particularly important as Malaysia seeks to enhance its family office landscape, reflecting the country’s intention to align with established markets like Singapore and Hong Kong.

• Legal Structure and Compliance: They assist in structuring the family office and its fund entities to meet regulatory standards. For instance, if a LLP or Sdn Bhd is used, they ensure adherence to the requirements for corporate governance and compliance.

• Managing Licensing Requirements: Family office lawyers manage the regulatory compliance aspect of family offices. While family offices may be exempt from certain licensing requirements, they still adhere to other regulatory standards. They navigate these requirements effectively, securing necessary exemptions where applicable.

• Ensuring Adherence to Legal Standards: They confirm that the family office and its entities comply with Malaysian legal and regulatory frameworks, thus avoiding penalties and helping families achieve their objectives.

Achieving regulatory compliance is essential for family offices, as it ensures they operate within the legal framework, avoid penalties, and help the families to meet their objectives.

Contract Drafting and Negotiation

Furthermore, family office lawyers also draft and negotiate Investment Management Agreements between the family office and fund managers. These agreements outline the terms of fund management, including investment strategies, fees, and responsibilities.

They also prepare and review Trust Deeds, constitutions for LLPs or Sdn Bhd, Offering Memorandums, Subscription Agreements, and other essential documentation to ensure compliance with legal standards and alignment with the family office’s objectives.

Additionally, they do also review and negotiate fund administration agreements and custodian agreements, ensuring that these contracts are favourable to the family office and compliant with legal standards

Dispute Resolution and Litigation

When disputes arise, whether related to fund management, family governance, or regulatory issues, family office lawyers represent their clients in negotiations and litigation. Their role is to resolve conflicts efficiently while protecting the family’s interests. They will also work to settle disputes through mediation and negotiation, aiming to achieve amicable resolutions.

Key Skills and Qualifications of a Family Office Lawyer

• Deep understanding of financial regulations and tax law: Family office lawyers must possess a comprehensive understanding of legal frameworks governing finance and taxation in Malaysia. This expertise enables them to navigate the complex regulatory environments specific to fund management, ensuring compliance and mitigating legal risks.

• Strong communication skills: Family office lawyers need to be adept at negotiating effectively on behalf of the families, advising clients and resolving disputes and this can achieve only if they do possess strong and effective communication skills.

• Staying updated with laws and industry trends: Being able to stay constantly updated and within the loop is essential for family officer lawyers to keep pace with changing laws. As staying updated with regulatory changes, particularly those affecting family offices and investment funds, is essential for providing accurate legal advice and ensuring compliance.

• Expertise and Experience: Experience in managing legal matters related to wealth management, family trusts, and fund structures is highly valued and crucial to obtain. Despite that, family office lawyers need to ensure they do possess a deep understanding of wealth management, fund structures, and family trust laws. They must be knowledgeable about both local and international regulations affecting family offices.

Why Should You Work with Our Family Office Lawyers?

It’s clear that legal expertise is essential for family office, especially in Malaysia’s competitive landscape. Singapore will facilitate the establishment of Family Offices in Malaysia through our affiliate law firm, our equipped lawyers will be able to help you navigate the complexities of fund management and tax compliance of family offices.

We understand the challenges family offices face. Whether you’re structuring your business for success, drafting critical legal documents, or ensuring compliance with Malaysia regulations, our team is here to support you every step of the way. By choosing our family office lawyers, you will receive tailored legal advice on the structure of the family office, the licensing exemptions, and the criteria of the tax exemptions. The lawyers will also be able to provide legal assistance in the application for the relevant tax exemptions, including the filings and liaising with IRBM.

If you wish to set up a LLP or Sdn Bhd, our the lawyers would be able to assist with the incorporation, structuring sub-entities, providing of corporate secretarial services, as well as the drafting required documentation like Offering Memorandums and Investment Management Agreements. We also review fund administration and custodian agreements, assisting with necessary registrations as required.

Do contact our Malaysian Team lead (Nathan Maharajah) at enquiry@familyofficeforestcity.my or WhatsApp at +65 9810 1685 for further details.  The InterAsia Law Alliance has a team of Malaysian-qualified lawyers and any Malaysian-law advice required for the setting up of the SFOVs and related services will be handled by Malaysian qualified attorneys.