Some reports say that Indonesia, based on an estimated capture of even 5 per cent of global wealth, could attract more than $500 billion.

National Economic Council chairman Luhut Binsar Pandjaitan has been quoted saying that Indonesia could potentially attract up to $500 billion in assets through the development of a family office ecosystem, highlighting how Asian jurisdictions continue to eye opportunities in this area.

According to Luhut, the initiative could generate substantial capital inflows while strengthening investor confidence and enhancing Indonesia's credibility as an international investment destination, a report in the Jakarta Globe, 14 June, said. 

Luhut made the comments ahead of an international forum scheduled to take place in Bali on 18 July, where the government plans to invite prominent global investors and business leaders to explore investment opportunities in Indonesia.

“Based on what I heard last night, there is potential for around $500 billion in funds to come in. Of course, they first want to see how Indonesia performs,” Luhut said.

Luhut said Indonesia had been relatively slow to pursue the concept compared with other jurisdictions that have successfully attracted global wealth, the report added.

At present, a significant amount of UHNW wealth, including via use of family offices, tends to take place offshore via Singapore and other hubs. Indonesia introduced a tax amnesty a decade ago, prompting thoughts that this might lead to a major flow out of Singapore and other places, although reports suggested that not as much money was repatriated to Indonesia as at first was hoped. 

Singapore and Hong Kong are the most significant family office bases, hosting about 1,500 and 1,400 offices, respectively. (Specific data can be hard to pin down, given that definitions of what a family office is can vary. Singapore has tightened rules on FOs in recent years as part of a compliance crackdown.)

According to a 22 August 2022 report by InvestinAsia, "Indonesia’s strong economic growth, stable political environment, and neutral geopolitical stance make it an attractive destination for global wealth management."

The article said that the family office market has "vast potential." Out of global wealth assets of $11.7 trillion, Indonesia could capture about $585 billion on the assumption that it captures even 5 per cent of this sum.

(Main picture shows Jakarta, the Indonesian capital. However, a new capital is being created: Nusantara, in East Kalimantan on the island of Borneo.)