The geopolitical tensions in the Middle East are prompting investors to seek safer investment destinations, and Indonesia is accelerating the establishment of a financial special zone to attract global capital.
According to the Jakarta Globe, Indonesia's Coordinating Minister for Economic Affairs, Airlangga, said at the Investor Daily roundtable held in Jakarta on the 28th that this plan aims to turn Indonesia into a financial center with international credibility, on par with competitors such as Singapore, Hong Kong, and Dubai.
“The situation in the Middle East is unpredictable, which brings new opportunities for other countries. If we are not prepared, the beneficiaries will be our neighboring countries. Indonesia will provide alternative options for investors through family offices and financial centers.”
Airlangga said that the plan to set up the financial special zone is currently in its finalization stage. Authorities are reviewing key supporting mechanisms needed by global investors, including trustee systems, foundations, and other legal entities, as well as dispute resolution mechanisms in line with international common law standards.
He added that all of this work is underway and the government is also considering potential locations.
Previously, in 2024, the chairman of Indonesia's National Economic Committee, Luhut, proposed setting up a family office in Bali to attract foreign investment. According to the incentive tax policies proposed by the authorities, no tax will be charged when initial funds enter through family office investments, and profits can be taxed later depending on different circumstances.
Luhut has already held talks with Ray Dalio, founder of Bridgewater Associates in the US, and the Porsche family, both of whom have expressed interest in establishing family offices in Indonesia. Indonesia's former Minister of Tourism and Creative Economy, Sandiaga, previously estimated that if successful, Indonesia could attract up to US$500 billion (RM1.97 trillion) in managed funds.