Jakarta. Chief Investment Minister Luhut Binsar Pandjaitan is preparing to establish family offices in Indonesia before President Joko "Jokowi" Widodo's term ends in October 2024.

"The establishment of family offices is still in its technical preparation, but it must be completed before October," Luhut said during a meeting at the Finance Ministry in Jakarta on Monday.

A family office is a private company that handles investment management and wealth management for wealthy families, typically those with investable assets of at least $50–100 million. The goal is to effectively grow and transfer wealth across generations.

Luhut noted that the process of establishing family offices in Indonesia is in the finalization stage. Currently, the government is conducting comparative studies with countries that have already implemented family offices, such as Abu Dhabi and Dubai in the United Arab Emirates (UAE).

Luhut mentioned that he had met with President Joko Widodo and President-elect Prabowo Subianto after returning from Abu Dhabi to discuss the plan for establishing family offices in Indonesia.

During these discussions, Luhut emphasized the need for legal certainty to build family offices in Indonesia. He suggested implementing an arbitration court with foreign judges.

"I reported to the President that we should adopt the legal systems used by Singapore, Abu Dhabi, or Hong Kong. By doing so, we provide legal certainty to those who invest here," he explained.

According to Luhut, many wealthy individuals and families worldwide are eager to invest their money in Indonesia. This interest is one of the reasons for the need to establish family offices and family businesses in the country.

"Why are we focusing on family offices and family businesses? Because there is a lot of money that wants to enter Indonesia," Luhut said.

Luhut believes that establishing family offices in Indonesia can bring significant benefits to the economy. He explained that funds from wealthy families would be integrated into the financial system, thereby strengthening foreign exchange reserves.

"Secondly, they need to invest, and with investment, Bu Ani (Finance Minister Sri Mulyani) can provide taxes, create jobs, and more. There are many modifications we can make," Luhut added.

Tourism and Creative Economy Minister Sandiaga Salahuddin Uno highlighted the potential for managed funds to reach $500 billion.

"With total family office funds reaching $11.7 trillion, capturing just 5 percent would mean $500 billion, significant over the next five years," Sandiaga said at the Presidential Palace.

Sandiaga, co-founder of Saratoga Investama Sedaya, a leading Indonesian investment firm, envisioned Indonesia competing with Singapore, Dubai, and Hong Kong in terms of attractiveness. "Bali garners strong global family office interest, despite regulatory reviews already in place like in Nusantara (Indonesia's new capital)," he concluded.