The Indonesian government is implementing strategic initiatives to establish family offices, private entities aimed at managing the business affairs of affluent families. This move will enable ultra-high-net-worth individuals from various countries to make investments without incurring tax liabilities.
Indonesian President Joko Widodo has directed the formation of a special team under the leadership of Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, involving some ministries and the World Bank, to assess the family office investment scheme and prepare the necessary regulations and infrastructure.
“Some foreign investors have already shown initial interest as the first registrants. We will provide more detailed information in the next two or three weeks,” Luhut said on Friday.
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The family office is set to be located in Bali, an island resort that draws tourists from around the world, as well as in Nusantara, the country’s new capital.
About 11 trillion U.S. dollars of global financial assets are presently invested outside their native economies, said Luhut, adding that this amount is expected to rise. The United Arab Emirates, Singapore and China’s Hong Kong are the main locations for these funds.
Luhut referenced The Wealth Report, which projects that the number of ultra-high-net-worth persons in Asia will rise by 38.34 percent between 2023 and 2028, with a 34 percent increase predicted for Indonesia.
He also emphasized how the United Arab Emirates, with more than 400 family offices in Dubai handling trillions of dollars, was a pioneer in the establishment of wealth management centres.
“Indonesia, with its strong economic growth, vast investment prospects, and neutral geopolitical policies, has the opportunity to attract foreign investment and become an alternative destination for capital placement,” he said.
In addition to benefiting ultra-high-net-worth individuals, investment funds will be used for domestic projects, thereby boosting national economic growth. Jobs are expected to become more available as domestic capital circulation increases, helping boost local consumption and increase the gross domestic product, Luhut added.
Source: Xinhua
