• News & Article
• Indonesia Prepares New Foundation to Attract Onshore Capital

Indonesia Prepares New Foundation to Attract Onshore Capital

 

 

The government is preparing one of the largest financial market reforms in recent years.
Starting in 2026, Indonesia will introduce new regulations that enable the establishment of trustee institutions and special-purpose vehicles (SPV) — a long-awaited step by investors to deepen the domestic financial market.

New Framework for Managing Assets Separately
With the introduction of trustees and SPVs, Indonesia will finally provide a legal structure that enables:
- Separation of legal and beneficial ownership,
- Asset protection through bankruptcy remoteness,
- As well as more flexible and professional asset management.

This model has already become standard in many global financial centres.
Without such structures, many institutional investors choose to place their funds abroad, particularly in Singapore, to access safer and more efficient investment vehicles.

Driving Onshore Capital Repatriation
This reform opens the opportunity for Indonesian funds held overseas to return to the domestic market.
With legally recognised SPVs and trustees:
- Assets can be deposited, managed, and separated from the operational risk of the managing party,
- Institutional investors gain comfort equivalent to regional standards,
- More complex investment structures can be built without needing to leave Indonesian jurisdiction.

For regulators, this strengthens market deepening, increases liquidity, and enhances confidence in local legal infrastructure.

Support for Danantara, Indonesia's New Sovereign Wealth Fund
Danantara — Indonesia's newly launched SWF — becomes one of the primary beneficiaries.
With this new framework, Danantara can:
- Establish dedicated trust funds,
- Manage a portfolio of around USD 1 billion over five years,
- As well as attract more co-investment funds with more modern and protected structures.

This becomes a crucial element in Indonesia's effort to build an internationally credible national asset management institution.

Strengthening the Foundation for Bali Financial Hub
This reform is also linked to the long-term vision of building the Bali Financial Hub, which will adopt common-law principles to be more attractive to global investors.
The trustee–SPV framework becomes a minimum prerequisite for:
- Attracting regional fund managers,
- Providing a platform for private equity, venture capital, and wealth structuring,
- And creating a more competitive financial ecosystem than other Asian financial centres.

This is an institutional foundation that can strengthen legal infrastructure, drive capital repatriation, and accelerate the deepening of Indonesia's financial market.

With implementation in 2026, Indonesia is moving towards a more modern investment ecosystem, while also paving the way for long-term ambitions as a regional financial centre.