From the classic cafés of Prague to the boulevards of Warsaw lined with post-soviet buildings, a new class of wealth is emerging. Entrepreneurs who once navigated the tumultuous transitions of post-communist economies are now steering their fortunes into the global arena. Central and Southeastern Europe, long overshadowed by their Western counterparts, are becoming fertile ground for family offices seeking untapped opportunities and growth.
The global landscape of wealth management is shifting. Family offices—private firms that manage investments, trusts, and other assets for single or multiple families—are expanding their horizons beyond traditional strongholds like New York, London, and Singapore. Central and Southeastern Europe, often overlooked in the past, are now coming into the spotlight. These regions offer a combination of economic growth, strategic geographical positioning, and cost-effective operational environments, tempered by regulatory challenges and political risks.
The Rise of First-Generation Wealth And Entrepreneurial Foundations
The fall of the Iron Curtain unleashed a wave of entrepreneurship across Central and Southeastern Europe. Countries like Poland, the Czech Republic, and Hungary witnessed the rise of private enterprises, particularly in manufacturing, technology, and real estate. This generation of wealth creators has built their fortunes from the ground up, often with a hands-on approach to both their businesses and wealth management.
A significant portion of wealth in the region stems from ownership of operational businesses in sectors such as energy, manufacturing, and construction. Wealth holders are deeply involved in day-to-day management, reflecting a strong tradition of self-reliance. This hands-on, entrepreneurial spirit and a healthy scepticism toward government institutions often make these individuals hesitant to entrust their fortunes to external advisors. Instead, they opt for self-management, especially in developing financial markets where established wealth management services may be limited.
According to David Grammig, founder of Grammig Advisory, which hosts an annual gathering for family offices in Central and Eastern Europe, “The maturity of family office structures varies across the region.” Each country in Central and Southeastern Europe offers its own blend of opportunities and challenges, shaped by economic policies, regulatory frameworks, and stages of development. Notable markets include Poland, the Czech Republic, Austria, Slovakia, Hungary, Slovenia, Lithuania, Latvia, and Estonia in Central Europe, and Romania, Bulgaria, Croatia, Serbia, and Montenegro in Southeastern Europe.
“The Czech Republic is strong in healthcare,” continues Grammig “, and Romania, for example, is particularly intriguing. Bucharest, its capital, is the eighth-largest city in Europe, larger than Munich, Barcelona, or Milan. With very low real estate prices and strategic relevance to the U.S., EU, and NATO, Romania presents unique investment opportunities, especially in real estate and technology sectors.”
Opportunities For Economic Growth and High Returns
The economies of Central and Southeastern Europe have shown remarkable resilience and growth. Many countries in the region boast GDP growth rates that outpace those of their Western counterparts, fueled by emerging sectors such as technology, renewable energy, and real estate. Robust economies like Poland, Romania, and the Baltic states have benefited from European Union funding and foreign direct investment. There is also a growing focus on renewable energy, which is in line with the EU’s agenda.
Estonia’s thriving tech scene, which has given rise to global success stories like Skype and TransferWise, exemplifies the region’s potential for high returns. Akim Arhipov, General Partner at fff.club, a private wealth management club for founders and executives across the Baltics and Nordics, notes, “In the Baltics, a new wave of technology companies is poised to create substantial wealth for founders and employees alike. Companies like Bolt, Vinted, Veriff, Nord Security, Skeleton Technologies, and Starship Technologies are on track for public offerings or acquisitions in the next five years.”
This impending liquidity is expected to present financial challenges for many employees who hold substantial equity or stock options. As these companies approach major liquidity events, there is a growing need for pre-liquidity planning, concentrated stock position management, and strategic investment planning to maximize and protect newfound wealth.
Strategic Geographical Position
Central and Southeastern Europe benefit from their strategic location at the crossroads of Western Europe, Russia, and the Middle East. This positioning offers family offices access to diverse markets and makes the region a natural gateway for investment.
Thanks to their proximity to major economic hubs, countries like Hungary and Romania are well-positioned to serve as entry points into both European and non-European markets. Membership in the European Union provides nations such as Poland and Slovakia with regulatory consistency, free movement of goods and services, and favorable trade agreements.
Competitive Costs and Skilled Workforce
Family offices seeking cost efficiencies will find that Central and Southeastern Europe offer competitive operational costs. Labor and real estate expenses are considerably lower than in Western Europe, without sacrificing the quality of the workforce. These lower costs allow family offices to enhance profitability without compromising service quality.
The region boasts a highly educated, multilingual workforce, particularly strong in technology and engineering sectors. Countries like Hungary and the Czech Republic have a growing talent base in outsourcing, IT and innovation, making them attractive for tech-driven investments.
Favorable Tax Regimes
Several countries in the region have implemented tax policies aimed at attracting foreign capital, offering significant incentives for family offices and wealth holders. Corporate tax rates are highly competitive; for example, Hungary and Bulgaria offer flat corporate tax rates as low as 9% and 10%, respectively. Special economic zones and tax holidays further sweeten the deal for foreign investors, particularly in manufacturing, renewable energy, and technology industries.
Navigating Complexity, Tax and Regulatory Landscapes
While the region offers significant rewards, the tax and regulatory environments can be complex. Each country has its own tax codes, requiring family offices to engage in meticulous planning and seek local expertise. This complexity is heightened when operating across both EU and non-EU countries. Political and economic transitions in these emerging markets can lead to sudden changes in tax policies or regulatory frameworks, necessitating flexible and proactive strategies.
EU vs. Non-EU Dynamics
Family offices must carefully consider the regulatory environments of EU member states versus non-EU countries. EU members like Poland, Slovakia & Slovenia offer the benefit of regulatory consistency and easier cross-border transactions. In contrast, non-EU countries such as Serbia and Montenegro may present additional compliance hurdles and potential trade barriers. For this reason, many wealthy individuals in these non-EU countries would also hold accounts in neighbouring EU states.
Developing Financial Infrastructure
In some parts of Central and Southeastern Europe, the financial infrastructure remains underdeveloped, limiting access to sophisticated investment products and banking services. Smaller capital markets and fewer advanced financial products can constrain investment strategies, especially for family offices accustomed to operating in more mature financial centers.
Local banks may offer different levels of expertise, services or investment products than those in Western Europe, making it crucial for family offices to build strong relationships with local financial institutions while also looking for alternative sources of opportunities beyond regional borders.
Political Stability and Corruption Risks
Varying degrees of political stability and perceived corruption can impact investor confidence. While many countries have significantly improved governance and transparency, many countries still pose a risk. For locals, instability means they must look beyond the borders for structuring options to help protect their wealth. Family offices outside the region looking to invest or partner with local family offices must conduct thorough due diligence and risk assessments when entering these markets.
Recent geopolitical tensions have also influenced investment decisions. “In terms of investment, many are looking towards the U.S., as even Western Europe is considered too close to Russia,” notes David Grammig. This shift underscores the need for family offices to stay informed about regional developments and adjust their strategies accordingly.
One for all or all for one?
The Case for Single-Family Offices
In these entrepreneurial economies, where first-generation wealth holders are accustomed to controlling their assets directly, Single Family Offices (SFOs) offer an attractive option.
Grammig concurs “The further south in Central and Eastern Europe you go, the less sophisticated the single-family office structures tend to be, especially in non-EU countries.”
Direct oversight ensures that decisions reflect the family’s vision and services designed for the principal’s needs without external influence. It also offers enhanced confidentiality—an essential consideration for families seeking discretion. However, establishing an SFO requires significant capital and resources, including hiring in-house specialists across various fields.
The Role of Multi-Family Offices
For families that lack the scale to justify an SFO, Multi-Family Offices (MFOs) provide a cost-effective alternative, offering access to a wider range of services and expertise. MFOs pool resources across multiple families, reducing individual costs and increasing access to sophisticated financial services. They can compensate for gaps in local banking services by providing more advanced financial structuring and advice and help with sourcing global investment opportunities. Collaboration between families within an MFO structure can also lead to joint ventures and shared investment opportunities.
Arhipov, continues, “The region’s traditional multi-family offices, which primarily serve legacy wealth, have left a clear opportunity for modern wealth management solutions tailored to the unique needs of technology professionals. Given the Baltics’ track record of successful fintech ventures, we are well-positioned to drive the next disruption here.”
Where to from here?
As twilight casts a golden hue over the spires of Budapest and the cobblestone streets of Belgrade, a new chapter in wealth management unfolds across Central and Eastern Europe. These regions, rich in history and cultural tapestry, are rapidly transforming into vibrant hubs of economic opportunity. The allure is undeniable: robust growth rates, strategic positions bridging East and West, and competitive advantages that beckon the world’s most discerning family offices.
Yet, navigating this landscape has its intricacies. The mosaic of tax regimes resembles a complex puzzle; financial infrastructures are still blossoming, and political undercurrents require astute attention. Success here demands more than capital—it calls for a nuanced understanding of local markets, the forging of genuine relationships, and the agility to adapt to ever-evolving conditions.
Whether families choose the bespoke autonomy of a Single Family Office, resonating with the region’s entrepreneurial spirit, or the shared expertise of a Multi-Family Office to compensate for gaps in banking services, one truth remains. Those who step beyond familiar territories to embrace the unique dynamics of these emerging wealth centres may find rewards as profound as the Danube’s depths and as expansive as the Carpathian horizon. In the fusion of old-world charm and modern ambition, the future of wealth is being reimagined—and it’s a story waiting to be written by those bold enough to turn the page.