What are the benefits if a Family office is established in Indonesia?

Investasi5 Juli 2024

Family offices are increasingly highlighted as tools for management finance exclusive for the crazy rich. In a recent discussion, Coordinating Minister Field Indonesian Maritime Affairs and Investment Luhut Binsar Pandjaitan explained the mechanisms and benefits of the family office.

What is that Family Office?

Family Office

A family office is a firm advisor managing riches serving a person’s​ family with very high wealth. Different from the service of a traditional finance advisor, the family office offers a total solution for managing the finances and investments of individual or rich families. They provide services including management investment, tax planning, heritage, and philanthropy activities.

Luhut Pandjaitan Insights about the Family Office

Mr Luhut Pandjaittan recently highlighted profit strategies from the family office, especially for Indonesia’s rich elite. He noted that the family office provides flexibility in finances and possibly efficient but significant taxes.​ Following are several points from Mr. Luhut’s discussion:

  • Tax Benefits

The potency savings tax is one of the most interesting reasons for rich people to set up a family office. According to Luhut, the family office can do it legally to minimize​ obligation tax through various investment strategies and methods of planning tax. This makes it an interesting choice to conserve riches for cross-generation.

  • Holistic wealth management

The family office provides a holistic approach to wealth management. They integrate various financial services under​ one roof. This assures that all aspects of life’s finances are coordinated and managed effectively. This includes all matters from daily accountancy to complex investment strategies.​

  • Privacy and Control

Privacy is the main attention for the rich, and the family office offers a way​ to manage financial affairs discreetly. Luhut emphasizes that the family office provides a level of control and confidentiality that is almost impossible to achieve with institutional finance.

Are Family Offices Only for Rich People?

General criticism towards the family office is that they especially benefit the super-rich, leaving others in the dust of injustice. Luhut answers their worries by arguing that even though it’s a family office designed for the rich, the principle is that their finances​ can benefit all. He suggested that even those who don’t fulfill the condition for a full family office can adopt a similar strategy on a smaller scale​ to improve finances.

Impact of the Family Office

Family offices are not only profitable for rich families but also can have an impact economically. It drives investment strategies and philanthropy activities. This can contribute to the stability of the economy and the development of the community. Luhut shows that investment strategies carried out by family offices frequently support local businesses and infrastructure projects. This increases the growth of the economy.

The family office represents an advanced approach to managing wealth as it offers lots of benefits, including efficient taxes, privacy, and comprehensive financial services.​ Although they are especially used by the super-rich, the principles behind the operation can become a lesson for only those who want to improve their financial plans. As stated by Luhut, the family office is more than simply a tool for conserving wealth. It is a dynamic component of a modern economy.