Why Is Indonesia (Not) the Preferred Destination for Family Offices?: Comparison with Singapore

Rangga Yudhisna, Gatot Soepriyanto

Abstract

This research analyzes the role of family offices in wealth management in Singapore and Indonesia. Family offices have played a crucial role in managing the wealth accumulated by wealthy families in capitalist countries. The concept of family offices originated in the United States in the 1980s and has evolved into tailored wealth management solutions for high-net-worth individuals (HNWIs). Using Singapore as a benchmark, this study analyzes the advantages and disadvantages of setting up family offices in Indonesia, focusing on political, economic, legal, and tax perspectives. In addition, it sheds light on the potential development of family offices in Indonesia, considering its proximity to Singapore and the growing interest in wealth management in the region. The research methodology involves interview and questionnaire surveys targeting HNWIs who have established family offices in Singapore or Indonesia and other parties involved in the family office, such as wealth managers, private bankers, fund managers, finance, and business consultants. The results show that most respondents prefer to establish a family office in Singapore rather than Indonesia from the perspective of tax. Other reasons are that Singapore’s political, economic, and social conditions are more stable and secure than in Indonesia. The findings of this study will contribute to a deeper understanding of the dynamics of family offices and their impact on the wealth management landscape in Singapore and Indonesia. Furthermore, the findings of this study can be used to inform strategic decisions regarding the establishment and management of family offices in these two countries. This study provides new perspectives and knowledge that Indonesia as a developing country can become an investment destination country mainly due to the growing development of economic, political, social, and technological conditions, although not as advanced as Singapore.

 

Keywords: family office, Singapore, Indonesia, tax, wealth management.

 

DOI: https://doi.org/10.55463/hkjss.issn.1021-3619.61.68


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