Family Office Setup in India: 2026 Structures and Costs

Family office setup in India does not need a licence: there is no dedicated family office law, and SEBI said in October 2025 that it is not pursuing one. A family builds its office from ordinary vehicles, usually a private trust for succession, an LLP or private company to hold investments, and, for global investing, a GIFT City Family Investment Fund. The real work is choosing the right mix and avoiding the RBI, LRS and FEMA rules that catch families out.

This guide is for promoter families, typically after a liquidity event or as the next generation starts to live abroad, who want to know which structure fits, what it costs to run and what to do first. If part of the family is already in the UAE, our guide to setting up a family office in Dubai for an Indian family covers the other side of that decision.

Key points

• India has no family office regulation. SEBI clarified on 3 October 2025 that it is not examining a framework for family offices. Registration is triggered only by what the office does, for example managing outside money.
• A private investment company can be required to register with the RBI as an NBFC if more than 50% of its assets and more than 50% of its income are financial. Many families never check this.
• The Liberalised Remittance Scheme (LRS) allows USD 250,000 per resident individual per financial year. Trusts, HUFs, companies and partnership firms cannot use it.
• A GIFT City Family Investment Fund (FIF) needs a corpus of USD 10 million within three years, and only one family's money. LRS alone rarely gets a resident family there.
• Finance Act 2026 extended the IFSC unit tax deduction to 20 consecutive years out of 25, with a 15% rate afterwards. Many guides still quote the old 10 out of 15.

What does a family office in India actually do?

A family office is the team and structure that manages a family's wealth as one balance sheet rather than as scattered accounts. In an Indian business family it typically handles investment allocation outside the operating business, tax and FEMA compliance, consolidated reporting, real estate and private holdings, philanthropy, and the governance that decides who controls what when the next generation takes over.

There are three working models:

• Single family office (SFO): the family employs its own team and owns the vehicles. Most control, highest fixed cost.
• Multi-family office (MFO): a regulated firm serves several families on one platform. Lower cost, less customisation, and the firm's own commercial interests to manage.
• Virtual or embedded office: a small in-house core, often the promoter's CFO plus a family member, with legal, tax, investment and reporting work outsourced to specialists.

Many families start with the embedded model and move to a full SFO once the investable pool and the number of family members make the fixed cost worthwhile.

Which legal structure should an Indian family office use?

Most Indian family offices of real scale combine vehicles rather than choose one. Each does a different job, and the right combination depends on whether the goal is succession, investing in India, investing abroad, or all three.

Tax rates above are the general rates published by the Income Tax Department. Listed equity gains are taxed at 12.5% long term (above ₹1.25 lakh) and 20% short term, as set by the Finance (No. 2) Act, 2024, whichever vehicle holds them, so the vehicle choice matters most for business income, dividends, distribution to the family and succession. The Income-tax Act, 2025 took effect on 1 April 2026 and renumbered most provisions, so older guides cite section numbers that no longer exist.

The trust usually sits at the top for succession. Our guide to offshore trusts and succession planning for internationally mobile Indian families explains when an Indian trust is enough and when part of the structure belongs offshore. The case for separating holding and operating layers is set out in holding vs operating companies.

Does a family office need SEBI or RBI registration?

SEBI: generally no, as long as the office manages only the family's own money. SEBI stated on 3 October 2025 that reports of it planning to regulate family offices were incorrect and that it was not examining the matter. Registration becomes relevant if the office starts managing money for people outside the family, pooling outside capital or charging advisory fees, at which point portfolio management, investment adviser or alternative investment fund rules can apply.

RBI: this is the trap. The RBI's FAQs on NBFCs (updated April 2025) state that a company is in the business of finance when its financial assets are more than 50% of total assets and income from financial assets is more than 50% of gross income. A company meeting both tests must register as an NBFC under section 45-IA of the RBI Act, 1934. A family investment company holding shares, bonds and mutual funds, with dividend and interest income, can easily cross both lines.

There is a narrower route for holding companies. A core investment company that holds at least 90% of its assets in group companies, with an asset size under ₹100 crore (aggregated across the group), is exempt from registration, according to the RBI's core investment company directions. That helps a pure holding company above the family's operating businesses. It does not help a company running a diversified portfolio. NBFC registration applies to companies, which is one reason many families hold the liquid portfolio in an LLP instead.

How do Indian families invest abroad through a family office?

Resident Indian money leaves India through one of two doors, and both are narrower than most families expect.

• Individuals, through LRS. The RBI allows each resident individual, including minors, to remit up to USD 250,000 per financial year (April to March) for permitted current and capital account transactions. The RBI's LRS FAQs state that the scheme is not available to corporates, partnership firms, HUFs or trusts. Tax is collected at source at 20% on investment remittances above ₹10 lakh a year; Budget 2026 cut the rate for education and medical remittances but left investment remittances unchanged. The tax can be credited against the remitter's liability, but it ties up cash for months.
• Entities, through the overseas investment rules. Indian companies and some other entities invest abroad under the Foreign Exchange Management (Overseas Investment) Rules, 2022, with limits based on net worth and conditions on what they can invest in. Our guide to ODI rules explains the framework, and how an Indian founder can fund an overseas company compares the personal and company routes.

The practical consequence: an Indian family trust cannot simply move part of its portfolio to New York or Singapore. Global allocation has to be planned person by person under LRS, entity by entity under the overseas investment rules, or through family members who already live abroad.

Is a GIFT City Family Investment Fund worth it?

A GIFT City Family Investment Fund is a fund in India's International Financial Services Centre that pools one family's money and invests it in US dollars, in India and abroad. Under the IFSCA framework, a "single family" covers individuals who are lineal descendants of a common ancestor with their spouses and children, plus entities the family controls with at least 90% economic interest. The FIF registers as an Authorised Fund Management Entity, is exempt from the USD 75,000 net worth requirement that applies to other authorised managers, and must reach a corpus of USD 10 million within three years. It cannot take money from outside the family.

What has changed in 2026:

• Longer tax holiday for IFSC units. Finance Act 2026 extended the deduction for eligible IFSC unit income from 10 consecutive years out of 15 to 20 consecutive years out of 25, from tax year 2026-27, with a 15% rate once the deduction ends. Minimum alternate tax at 9% of book profit can still apply, and a unit formed by splitting up or transferring a business already existing in India does not qualify. How these rules apply to a specific FIF's income depends on its structure and needs a specific opinion. Several of the top-ranking guides on this topic still quote the old 10-year period.
• Licensing is real but slow. IFSCA granted its first full FIF registration in April 2026, to a family office with a London-based principal, according to Private Banker International (21 April 2026). The same report said vehicles linked to prominent Indian families had in-principle clearance but not final licences, because of concerns about capital outflows. Plan for a long approval timeline.
• The fund rules keep moving. IFSCA's Fund Management (Second Amendment) Regulations, 2026 were notified on 31 August 2026 and took effect on 10 September 2026, so check the current text before you file.

The funding arithmetic matters more than the tax. A USD 10 million corpus in three years is about USD 3.3 million a year. Two resident parents using their full LRS limits can send USD 500,000 a year between them. Even six resident adults reach only USD 1.5 million. FIFs therefore tend to work for families where non-resident members or overseas family entities, which are not bound by LRS, provide much of the capital, or where Indian companies can contribute within the overseas investment rules. Our GIFT City corridor page covers the wider IFSC regime and how it compares with Singapore and Dubai.

How do NRI family members fit into an Indian family office?

Family members who live in Dubai, London or Singapore are usually the reason a family office becomes cross-border, and the rules treat them very differently from resident members.

• They cannot invest in an Indian private trust. India's consolidated FDI policy does not permit foreign investment in trusts other than SEBI-registered venture capital funds. An NRI can be a beneficiary of a trust settled by resident family members, but cannot fund it from abroad as an investor.
• They can invest in the family LLP or company on a non-repatriation basis. Under Schedule IV of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, NRIs and OCIs can invest in equity of a company or capital of an LLP on a non-repatriation basis, and that investment is treated as domestic investment, so the vehicle's own Indian investments are not counted as foreign. Exclusions apply, for example for real estate business and agricultural or plantation activity.
• They can contribute to a GIFT FIF with money held abroad, without the LRS ceiling that applies to resident members.
• Their residence must stay clean. If a member who has moved abroad keeps taking the key decisions for an overseas vehicle from India, that vehicle can become Indian resident under the place of effective management test. See our guides on place of effective management and moving to Dubai from India.

What does it cost to run a family office in India?

There is no official cost benchmark, and published ranges are practitioner estimates rather than audited data. Dealplexus, for example, puts annual running costs at ₹60 lakh for a lean setup to ₹3 crore or more for a full team, and argues that a single family office makes sense only above ₹100 to 150 crore of investable assets. Treat any such figure as a starting point for your own budget, not a rule.

The better way to decide is to build the budget yourself and express it as a percentage of the assets the office will manage:

A simple test: if the office will cost ₹1.2 crore a year and manage ₹150 crore, it costs 0.8% of assets every year before any investment fee. It has to earn that back through better allocation, lower product costs, tax efficiency or avoided mistakes. If it cannot, a multi-family office or an embedded model is the honest answer.

Step by step: how to set up a family office in India

1. Write down the family's objectives. Succession, preserving the operating business, growing liquid wealth, global diversification, philanthropy. The structure follows from these, not the other way round.
2. Map where every family member is tax resident today and is likely to be in five years. This decides which routes for moving money are open.
3. Map the assets: operating company shares, listed portfolio, real estate, private investments, assets already abroad.
4. Choose the vehicles. Usually a trust for succession, an LLP or company for investments, and possibly a GIFT FIF or overseas vehicle for global allocation.
5. Run the regulatory checks before money moves: NBFC test for any company, overseas investment eligibility for entities, LRS headroom for each individual, Schedule IV eligibility for NRI members.
6. Document governance: a family constitution or charter, an investment policy statement, who sits on the investment committee, and how decisions are recorded.
7. Set up the vehicles and accounts: registrations, PAN, bank and demat accounts, custodian and reporting.
8. Move assets in a planned order, considering stamp duty, capital gains on transfers and the gift rules for transfers between relatives.
9. Build the annual compliance calendar for every vehicle and every family member, including LRS and overseas investment reporting.

Worked example: an Ahmedabad family split across India and Dubai

Consider a hypothetical family: the promoter couple live in Ahmedabad and hold 60% of a manufacturing company; after a partial stake sale they have ₹150 crore of liquid assets. Their son lives in Dubai and is a UAE tax resident; their daughter lives in India and works in the business.

• Succession: the parents settle a private family trust to hold their shares in the operating company, with all three branches as beneficiaries. The trust deed, not a will, decides how control passes.
• Liquid portfolio: held in a family LLP rather than a company, which keeps the portfolio outside the NBFC registration requirement that applies to companies and avoids a second layer of tax on distributions.
• The son's capital: he invests his own Dubai savings in the LLP on a non-repatriation basis, which is treated as domestic investment. He keeps his separate Dubai portfolio in his own name, managed from Dubai.
• Global allocation: the parents and daughter can remit up to USD 750,000 a year between them under LRS, paying 20% TCS above ₹10 lakh each and claiming it back. That is far short of a USD 10 million FIF in three years from resident money alone, so the family parks the FIF idea unless the son decides to commit most of the corpus from abroad.
• Running cost: they start with an embedded office (their group CFO, one investment hire and outsourced tax and legal), and review a full single family office once the liquid pool and the next generation's needs justify it.

The numbers are illustrative. The pattern is common: the structure is decided by where people live and how the money can legally move, not by which vehicle has the lowest headline tax rate.

Common mistakes Indian families make

• Running a portfolio through a private company without checking the RBI 50-50 test, then finding the company should have been registered as an NBFC.
• Assuming the trust can invest abroad. It cannot use LRS.
• Planning a GIFT FIF on resident money only without doing the LRS arithmetic.
• Letting the NRI son or daughter sign everything for an overseas vehicle while living in India part of the year, which creates residence risk for the vehicle.
• Ignoring who really controls the structure. Beneficial ownership rules look through trusts and nominees, as covered in beneficial ownership: when the real owner is different from the legal one.
• Building the office before the governance. Without an agreed investment policy and decision process, the office becomes a payroll for the loudest family member's ideas.

When should you not set up a family office?

• When the liquid pool is small enough that the fixed cost would take a large share of expected returns.
• When nearly all the family's wealth is still in the operating company and there is no plan to diversify.
• When the family has not agreed on governance, because a structure will not resolve a disagreement.
• When the real need is a will and a trust deed, which a good lawyer and tax adviser can deliver without a standing office.
• When most of the family has moved abroad, in which case the investment base may belong outside India, and the Dubai or another offshore option deserves a serious look.

The Greenwolf view

A family office is a governance decision first and a tax decision second. We start with the family: who lives where, who will run the business, what each branch needs, and how decisions will actually be made. Then we choose vehicles that fit those facts, check each one against the RBI, LRS, FEMA and residence rules, and only then look at tax. Tax follows functions, risks and substance, and a structure that does not match how the family really behaves will not hold up when a member moves country or a regulator asks questions. Greenwolf's offshore tax and wealth structuring team designs and implements trusts, holding vehicles and cross-border structures for business families across India, the UAE and the UK, and keeps the compliance running afterwards.

Planning a family office for a family spread across India and abroad? Talk to our team before you settle the first trust or move any money.

This article is general information, not advice for a specific case.