As Indonesia navigates the complexities of global economic competition, the government is turning its attention to a unique strategy aimed at attracting investments from the world’s ultra-wealthy families. This innovative approach involves the creation of family offices to Indonesia, specialized entities designed to manage the wealth of affluent individuals and families, with enticing tax exemptions as a key incentive.
Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, recently revealed the government’s plan to establish a task force dedicated to family offices within the next month.
“Family offices are a strategic effort to draw wealth from other countries, fostering national economic growth,” Luhut announced on his social media platform.
By facilitating the establishment of family offices in Indonesia, the government hopes to boost domestic capital circulation significantly. “Not only will this initiative increase the flow of capital within the country, but it also holds the potential to enhance GDP and create job opportunities through local investment and consumption,” Luhut elaborated.
The concept of family offices isn’t new; these entities are tailored to manage the assets and investments of a small, elite group of ultra-wealthy individuals or families. Unlike conventional asset management firms, family offices provide a holistic suite of services, including investment strategies, financial and tax planning, family succession and estate planning, philanthropic activities, and even personal concierge services.
Luhut emphasized the government’s ongoing efforts to refine policies that will support the establishment of family offices in Indonesia. “We are carefully reviewing our policies to ensure they are conducive to the creation of family offices here,” he stated.
Citing data from The Wealth Report, Luhut highlighted the rapid growth of ultra-wealthy populations in Asia. “The number of ultra-wealthy individuals in Asia is projected to grow by 38.3% from 2023 to 2028,” he noted. This surge presents a golden opportunity for Indonesia to attract substantial investments from family offices worldwide.
“The global trend of increasing financial assets being invested outside their home countries is clear. We see this as a chance for Indonesia to tap into these funds,” Luhut said, underscoring the potential economic benefits of this initiative.
Moreover, Luhut pointed out the competitive advantage Indonesia could gain due to the current challenges faced by neighboring countries, Hong Kong and Singapore, which are traditional hubs for the ultra-wealthy. “This situation presents a unique opportunity for Indonesia to position itself as a favorable destination for family offices,” he observed.
In preparation for this strategic move, the government will form a dedicated task force within the next month to address necessary policy adjustments. “We are committed to revising our policies to make them more competitive in the current global landscape,” Luhut asserted. This includes enhancing the ease of doing business, providing attractive tax incentives, adjusting the financial system, and refining the legal framework to support the establishment and operation of family offices in Indonesia.
By embracing this forward-thinking approach, Indonesia aims to attract significant investments from the world’s ultra-wealthy families, fostering economic growth and enhancing the nation’s global economic standing.
