Luhut Reveals Legal Certainty and Tax Incentives for Family Offices

JAKARTA, DDTCNews - The government is seeking to strengthen legal certainty to attract investment into Indonesia's international financial centre (PFII) and family offices.

One proposal that has emerged is to clarify the boundaries of state financial losses and the elements constituting a corruption crime. The Chairperson of the National Economic Council (Dewan Ekonomi Nasional/DEN in Indonesian), Luhut Binsar Pandjaitan, said this measure is expected to provide legal certainty for investors conducting business and investing through the PFII and family offices.

"We are actually linking this directly to the International Financial Centre, which the President has already directed us to establish, possibly in Bali in the near future, perhaps within the next few months. There will also be family offices there, and these likewise require a great deal of legal certainty," he said, as quoted on Wednesday (28/10/2026).

When asked whether the proposed redefinition of state financial losses and corruption could ensure that the PFII and family offices do not become tax havens used as means of tax avoidance, Luhut did not respond directly.

He stated only that the development of the PFII and family offices, including the provision of tax facilities, is already aligned with international best practice drawn from 8 jurisdictions, such as Abu Dhabi, Dubai, Gujarat and Singapore.

"We have already examined international best practice. So we have studied what happens in Singapore, what happens in Abu Dhabi, Dubai, Gujarat. We studied 8 countries. Thereafter, we formulated which approach suits us best and must also suit investors," he said.

Luhut believes the government needs to offer attractive tax facilities to increase the interest of foreign investors in placing their stated capital in the PFII and family offices. However, that investment competitiveness must also be balanced with sound governance of tax facilities.

"We must observe the equilibrium. We cannot simply have things our way. If we cannot accommodate their wishes, they will not come to us either," he said. (dik)