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Bali to become family office hub, says minister

Jakarta Post - May 21, 2024

Yohana Belinda, Jakarta – Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan has pitched Bali as an alternative hub for wealthy individuals of the region from where to run their family's business affairs, pitting the island against the popular locations of Hong Kong and Singapore.The number of Singapore-registered family offices, which manage tens of billions of dollars in private wealth, has skyrocketed from 50 in 2018 to 1,100 by the end of 2022, according to the Monetary Authority of Singapore, as reported by the Financial Times.

Most of the family offices in Singapore were set up during the pandemic, and a long line of businesspeople are still looking to make the city-state their base, according to the same article, published in November last year, prompting increased scrutiny from local authorities to prevent money laundering.

"There has been a discussion about urging Bali to become a hub for family offices like Hong Kong and Singapore," Luhut said on Saturday, as reported by CNBC Indonesia.

The vast majority of businesses in Indonesia are family-owned. According to PwC data from 2014, this applied to 95 percent of all businesses in the country at the time.

The senior minister said he had met with 20 delegations from various countries and major companies, who had shown interest in Bali and were willing to invest through family offices there.

"We will report the results of the discussion to President Joko "Jokowi" Widodo as early as June. Later, if a family office is established in Bali, the investors have requested that it serve as the hub linking Singapore, Hong Kong and Dubai, among others," Luhut said.

He said the delegations had pointed out several advantages of Bali, including good hospitals and legal provisions. Furthermore, Luhut suggested that Bali also lent itself as a location for family offices in the context of Global South collaboration.

"There are a lot of projects being discussed with family offices, because they invest significant amounts of money and are looking for places to invest," Luhut said.

Aside from family offices, he mentioned that other topics were being discussed, including investment in seaweed.

"Seaweed is now going to be a prime commodity, like nickel, then there's carbon capture storage and many others, including mangrove [forests for] carbon [sequestration]," Luhut said.

Bali's development as a globally renowned tourism hub has contributed to a gradual decrease in agricultural land from 78,626 hectares in 2017 to 74,657 ha in 2021.

While the influx of millions of foreign visitors per year drives a major chunk of economic activity on the island, mass tourism has also led to some resentment among residents.

Source: https://asianews.network/bali-to-become-family-office-hub-says-minister