Despite this, only 30% survive into the second generation and a mere 10% reach the third, PwC's 2022 Asia-Pacific Family Business Survey reveals.
The challenges - reluctant heirs, governance gaps and wealth transfer complexities - affect not just the individual firms but also the wider economy.
A major hurdle is the declining interest among heirs in taking over the family business. PwC's survey also finds that 58% of next-gen leaders in Singapore and Hong Kong prefer careers in tech, finance or start-ups rather than joining traditional family firms.
This reluctance is compounded by generational clashes over strategy. While younger generations push for digital transformation and global expansion, the founders often resist change, fearing a loss of control. The resulting stalemate leaves businesses vulnerable to nimbler competitors.
See also: Micro-Mechanics: A blueprint for leadership
Even when successors are willing, not all transitions are smooth for one reason or another, such as proper governance frameworks that have fallen short. According to KPMG, only 23% of Apac family businesses have a formal succession plan.
The absence of clear structures leads to infighting. PwC found that 45% of disputes stem from succession conflicts, sometimes irreparably fracturing businesses. Singapore business families are not immune.
Many local firms rely on informal family consensus rather than independent boards, increasing the risk of messy transitions when emotions override logic.
See also: Karin Group: Pragmatic evolution in a changing tech landscape
Beyond leadership, transferring wealth efficiently is another stumbling block. KPMG notes that Asia's ultra-wealthy families will pass down US$1.9 trillion ($2.5 trillion) in assets over the next decade, yet few have robust succession plans.
In markets like Thailand and Indonesia, unclear inheritance laws lead to fragmented assets, weakening business continuity. Singapore fares better with its family office incentives, but cultural taboos around discussing succession often delay critical financial planning.
Some firms are adapting, with KPMG highlighting the rise of "next-gen councils" in Singapore, where younger family members drive innovation while respecting legacy values.
External advisors are also gaining traction. PwC reports that 41% of family businesses now use consultants for succession planning, up from 27% in 2020. Governments are stepping in, too. For example, the Monetary Authority of Singapore is refining family office frameworks to make transitions easier.
With these, business families are probably more aware of the risks of succession than others and are taking action to buck the broader trends.
