The Indonesian government plans to establish a family office center in Bali.
"We encourage Bali to become a hub for family offices, like Hong Kong and Singapore," said Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan on Saturday (18/5/2024).
A family office is a private company that manages the assets of ultra-high-net-worth families.
These companies typically act as financial planners, tax managers, and investment managers for their clients.
Luhut stated that the Indonesian government plans to grant tax exemptions to family offices that keep their funds or invest in Indonesia.
The plan is that these "wealthy family offices" will only be taxed if their investments involve job creation.
Although they only manage family wealth, family offices hold very large assets under management (AUM).
Based on a Deloitte survey of 354 family offices from various parts of the world, they manage an average of US$2 billion, or approximately Rp32.8 trillion per company (assuming an exchange rate of Rp16,400 per US$).
Their clients, on average, have a total net worth of US$3.8 billion, or approximately Rp62.3 trillion per family.
Deloitte also found that family offices generally keep their assets under management in the stock markets of developed countries, direct investments in companies, and the real estate sector.