Singapore families setting up a private trust company (PTC) usually reach the same conclusion within their first planning meeting: someone still has to hold the shares of the PTC itself, and whoever that is should not, in the ordinary sense, “own” it. This is the essence of the orphan structure, and Singapore practitioners now have a reasonably settled playbook for building one. What is less often set out plainly is the next question a family office actually has to answer: if the purpose trust holding those PTC shares cannot be settled under Singapore law, which offshore jurisdiction should hold it, and why does the choice matter?

We have covered the mechanics of why Singapore has no domestic non-charitable purpose trust legislation, and the governance questions around appointing and removing PTC directors, in earlier articles. This piece picks up where those leave off. It is a practical comparison of the offshore homes families actually use for the purpose trust component of a Singapore PTC orphan structure – Cayman, the British Virgin Islands, Guernsey and Jersey – and the questions a family office should work through before instructing counsel in any of them.

Why the Purpose Trust Has to Sit Offshore

Singapore trust law, administered under the Trustees Act 1967, follows the traditional common law position: a trust must have identifiable beneficiaries who can enforce it, or it must be charitable. A trust created purely to hold shares for an abstract “purpose” – keeping a PTC’s shares out of anyone’s estate – offends the beneficiary principle and is void if purportedly created under Singapore proper law. The Singapore Academy of Law’s Law Reform Committee recommended in 2021 that Parliament enact standalone non-charitable purpose trust legislation, but as at this writing that recommendation has not been implemented. Families cannot yet settle a genuine orphan-structure purpose trust under Singapore law itself.

That gap is exactly why the market has developed the hybrid structure now standard across Singapore family offices: a Singapore-incorporated PTC (or a Singapore holding entity within the wider structure) sits at the operating centre, licensed-exempt under the Trust Companies Act 2005, while the shares of that PTC are held on the terms of a purpose trust settled under the law of a jurisdiction that actually permits non-charitable purpose trusts. Singapore provides the substance, regulatory comfort and (for many families) the tax residency; the offshore jurisdiction provides the one piece of legal plumbing Singapore cannot yet supply.

The Decision Framework: What Actually Differs Between Jurisdictions

Every offshore purpose trust jurisdiction solves the same problem – enforcement without beneficiaries – but the mechanics, cost and administrative burden differ meaningfully. Before naming a jurisdiction in the trust deed, a family office should work through five questions.

1. How Is the Purpose Enforced?

Because there is no beneficiary to sue the trustee for breach of trust, every purpose trust regime substitutes a different enforcement mechanic. Cayman’s STAR trusts (under the Special Trusts (Alternative Regime) Law) require the appointment of an enforcer, a person or corporate entity with standing to compel the trustee to perform the stated purpose. The BVI’s VISTA regime (Virgin Islands Special Trusts Act) takes a different route entirely: it does not require a purpose trust in the conventional sense at all, but instead lets a trust hold shares in a company while expressly disapplying the trustee’s usual duty to intervene in how the company is run, leaving management with the directors. Guernsey and Jersey both allow non-charitable purpose trusts under their respective trust laws and, like Cayman, require an enforcer distinct from the trustee.

2. Who Can Act as Enforcer, and Is That Person Already Known to the Family?

Families often default to naming a trusted adviser, family friend, or the family office’s own compliance head as enforcer. That is workable in Cayman, Guernsey and Jersey, but the enforcer’s duties and potential personal liability should be spelt out in the deed, and a corporate enforcer (a licensed trust company in the same jurisdiction) is often more durable across a multi-generational time horizon than an individual who may predecease the structure.

3. What Does the Local Regulator Require of the Trustee?

Cayman, BVI, Guernsey and Jersey each license trust businesses locally, and a licensed local trustee will typically be required (or strongly preferred) to hold the purpose trust, separate from the Singapore-licensed trust company that may be engaged on the PTC side under the Trust Companies Act 2005 exemption regime. Families should budget for two sets of professional trustee relationships, not one, and confirm each side’s anti-money-laundering and customer due diligence obligations are coordinated rather than duplicated in a way that annoys the bank.

4. What Does It Cost to Set Up and Maintain?

As a broad rule of thumb, BVI VISTA structures tend to be the least expensive to establish and maintain, reflecting the jurisdiction’s lighter-touch company law generally. Cayman sits in the middle, with STAR trust formation and annual enforcer fees adding a layer of cost above a standard Cayman trust. Guernsey and Jersey trust administration tends to carry the highest ongoing fees of the four, reflecting more detailed local regulatory reporting, but many advisers view this as the price of a deeper bench of enforcer and fiduciary talent and a more established body of Channel Islands trust case law to fall back on if a dispute arises.

5. Does the Choice of Jurisdiction Sit Well With the Rest of the Family’s Structure?

A family running a Variable Capital Company fund platform out of Singapore, for instance, may find a Cayman purpose trust sits more naturally alongside existing Cayman fund vehicles the family already uses, simplifying advisers and reporting lines. A family whose wealth is concentrated in a small number of operating companies with simple share registers may find BVI’s lighter VISTA route entirely sufficient. There is no universally “best” jurisdiction; there is only the jurisdiction that fits the family’s existing footprint, risk appetite and budget.

A Practical Comparison

Jurisdiction Purpose Trust Regime Enforcement Mechanic Relative Cost Typical Fit
Cayman Islands STAR trusts Named enforcer, can be corporate Medium Families with existing Cayman fund or SPV relationships
British Virgin Islands VISTA trusts No conventional enforcer; directors retain management autonomy Lower Simpler operating-company shareholdings, cost-conscious families
Guernsey Non-charitable purpose trusts Named enforcer required Higher Families wanting deep fiduciary and dispute-resolution infrastructure
Jersey Non-charitable purpose trusts Named enforcer required Higher Families already using Jersey private wealth structures

Governance and Control: Who Actually Runs the PTC?

Whichever jurisdiction is chosen, the purpose trust’s real function is narrow: it holds the shares so no natural person or ordinary holding company is the PTC’s legal owner. It is not where the family’s day-to-day control over the PTC actually lives. That sits in the PTC’s own constitution, typically through a reserved power for the family (or a designated family council) to nominate and, in defined circumstances, remove PTC directors, exercised as a matter recorded in the trust deed’s letter of wishes rather than as a shareholder right in the conventional sense, since the purpose trust itself has no beneficial interest to direct. Where a protector or enforcer is also given a veto over director appointments, the family office should map out, in writing, exactly how that veto interacts with the family’s own nomination rights, so the two do not collide during a succession event.

Annual filings, financial statements, and the PTC’s own compliance calendar under the Trust Companies Act 2005 exemption and the Trustees Act 1967 continue to run on the Singapore side regardless of which offshore jurisdiction holds the shares. The offshore purpose trust does not relieve the Singapore PTC, or its engaged licensed trust company, of any local regulatory obligation.

Common Mistakes Families Make When Choosing a Jurisdiction

The most frequent error is treating the jurisdiction choice as a purely legal or tax question, decided by counsel in isolation, without checking how it will interact with the family office’s chosen banking relationships and existing fund vehicles. A second common mistake is failing to name a successor enforcer or protector at all, leaving a structure that functions well on day one but has no answer for what happens when the sole named enforcer becomes incapacitated or dies. A third is underestimating ongoing cost: families sometimes budget for the initial formation fee and are surprised by the recurring annual cost of maintaining two professional trustee relationships across two jurisdictions indefinitely. Where a dispute over the purpose trust or the PTC’s governance does eventually arise, families in Singapore will usually still need legal advice on this from counsel qualified in both the Singapore and the offshore jurisdiction concerned, since the two legal systems interact but are not interchangeable.

Where This Sits Within the Wider Singapore Family Office Picture

Families building an orphan PTC structure are very often doing so alongside a Section 13O or 13U fund vehicle, and the choice of offshore purpose trust jurisdiction should be made with that wider structure in view, not as a standalone decision. Our earlier pieces on why families want an orphan PTC structure in the first place, on the ownership options available without a local purpose trust, and on the protector’s role in appointing and removing PTC directors set out the governance mechanics in more depth. Families weighing up whether a single or multi-family office model suits them at all should also read our comparison of single versus multi-family office structures in Singapore, and any family office running an orphan PTC will also want to keep its beneficial ownership filings current under our guide to common RORC and beneficial-owner register mistakes.

Sound structuring is only ever half the picture; families should pair it with genuinely independent personal financial planning so the orphan structure serves the family’s actual long-term objectives rather than becoming an end in itself.

Getting Started the Right Way

There is no shortcut to this exercise. A family office should shortlist two or three candidate offshore jurisdictions, obtain indicative fee quotes from a licensed trustee in each, and confirm with its Singapore corporate secretary and its Singapore-licensed trust company how each option would interact with the PTC’s own annual compliance calendar, before a single trust deed is drafted. Getting the jurisdiction right at the outset avoids an expensive and disruptive re-domiciliation of the purpose trust years later.

To speak with the team at Raffles Corporate Services, you can email [email protected] or call, SMS, or WhatsApp +65 8501 7133. We are happy to assist with any queries.

The Editorial Team, Raffles Corporate Services