(Nov 24): Indonesia plans to issue rules next year to set up trustee institutions and special-purpose vehicles aimed at spurring investment — a move that will also allow state fund Danantara to create a trust fund for onshore capital.
The Southeast Asian nation aims to use the measures to attract more private and institutional funds — including local money parked offshore — to support economic growth, said Masyita Crystallin, director general of financial sector stability and development at the Finance Ministry, in an interview.
“This framework is something that investors have long wanted to see realised in Indonesia,” Masyita said, adding that it’s in line with President Prabowo Subianto’s focus on attracting inflows and making domestic investment more appealing.
The plan is part of Indonesia’s broader push to mobilise capital at home and deepen financial markets to support faster economic expansion, including by drawing back funds parked offshore — often in Singapore, where conglomerates and wealthy investors benefit from stronger legal protections and established trust structures.
Indonesia’s civil law system currently lacks a legal framework that allows assets to be held and managed by a trustee on behalf of others.
A coming regulation, derived from the 2023 financial sector law, will introduce concepts commonly used in common-law jurisdictions, Masyita said. Those include separating legal and beneficial ownership and ensuring “bankruptcy remoteness”, which keeps assets insulated from the insolvency risk of trustees or managers.
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The initiative could mark the first step in Indonesia’s ambition to develop a regional financial hub in Bali, planned to operate under a common-law framework to attract global fund managers and international financial institutions.
It would also pave the way for plans by the recently established Danantara sovereign wealth fund to set up a trust fund to manage about US$1 billion (RM4.14 billion) over the next five years. Danantara has said the fund could offer collaboration opportunities with the Gates Foundation in areas such as education, health and poverty alleviation.
Masyita, 44, is the only woman currently heading a directorate at the Finance Ministry. Her office, formed in June to oversee the stability and development of Indonesia’s financial system, is finalising dozens of regulations stemming from the sweeping financial sector law.
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Under her watch, the government is also drafting rules to demutualise the stock exchange, a step toward turning it into a corporation whose shares can be held by a wider group of investors.
“We oversee the entire financial sector chain at a macro level,” Masyita said. That includes ensuring there are sufficient financing resources and instruments, along with clear market regulations that can keep up with rapid global developments in the sector, she said.
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