When people say they want to “incorporate a trust” in Indonesia, they usually mean they want to establish a legal structure that can hold, manage, and distribute assets for the benefit of other people. I should clarify one important point at the beginning: Indonesia does not traditionally recognize a private family trust in exactly the same way as England, Singapore, or other common-law jurisdictions. You do not simply register a trust in the same way you register a Perseroan Terbatas or PT.
However, Indonesia is moving toward a more developed legal framework for trust-like arrangements. Law No. 4 of 2023 on Financial Sector Development and Strengthening, commonly known as the P2SK Law, introduces the concepts of Special Purpose Vehicles and trustee or trust-management institutions. This creates an important foundation for regulated commercial trust arrangements in Indonesia.
So, why should you consider incorporating or establishing a trust-like structure in Indonesia? My answer is simple: because a properly designed structure can provide continuity, professional management, beneficiary protection, and clearer succession planning. But it must be established transparently and with advice from Indonesian legal, tax, and inheritance professionals.
A Trust Can Preserve Family Wealth
For a large family, wealth is rarely limited to cash. It may include shares in operating companies, land, apartments, plantations, intellectual property, investment portfolios, and businesses managed by several generations. Without a clear structure, these assets can become difficult to manage when the founder dies, becomes incapacitated, or no longer wishes to control daily affairs.
A trust-like arrangement allows the founder, sometimes called the settlor, to establish written rules for the management and use of assets. The assets can be managed by a trustee or another appointed manager for identified beneficiaries. Instead of requiring every family member to negotiate each decision, the structure provides a continuing framework.
This is especially valuable when beneficiaries are young, inexperienced, or not actively involved in the family business. You may want your children to receive financial support without giving them immediate control over valuable company shares. A carefully drafted arrangement can provide education expenses, housing support, medical payments, or regular distributions while preserving the underlying assets.
The P2SK Law Creates a Modern Legal Direction
The P2SK Law is important because it recognizes the need for modern financial instruments, including SPVs and trustees. The trustee model described in the developing framework is intended to involve the receipt and management of assets belonging to a settlor for the benefit of beneficiaries under a written agreement.
One of the most attractive features is the proposed separation between legal ownership and beneficial enjoyment. In practical terms, the trustee may hold or administer the assets while the beneficiaries receive the economic benefits according to the trust agreement.
The framework also refers to the principle of bankruptcy remoteness. This means that trust assets should be treated separately from the trustee’s own assets and, subject to the final implementing regulations and specific facts, should not automatically become part of the trustee’s bankruptcy estate.
That separation can create greater confidence for families, investors, and commercial parties. It can also help prevent the personal financial problems of one family member or manager from immediately disrupting assets that are intended for the wider family.
The framework is still developing. In 2025 and 2026, the Ministry of Finance continued preparing implementing regulations for SPV and trustee structures. Therefore, you should not assume that every feature of a foreign trust is already available in Indonesia. The P2SK Law provides a statutory direction, but the details of licensing, supervision, eligible assets, trustee duties, reporting, and enforcement remain critical.
Existing Bank Trust Rules Are More Limited
Indonesia already has a regulated form of trust activity under OJK Regulation No. 27/POJK.03/2015 concerning bank activities involving custody and management, known as penitipan dengan pengelolaan or Trust.
Under this regulation, the bank acts as trustee, the asset owner acts as settlor, and another person or entity receives the benefit. The arrangement must be based on a written agreement, and trust assets must be recorded and reported separately from the bank’s own assets.
However, this regulation is mainly designed for bank trust activities and financial assets. It should not automatically be treated as a complete legal basis for a broad private family trust holding every type of family property. That is why careful structuring is essential.
A PT May Be the Better Family Wealth Vehicle
For many Indonesian families, a PT remains the most practical structure. The 2007 Company Law, as amended by the 2023 Job Creation Law, provides a familiar legal framework for owning and operating businesses.
Article 53 of the Company Law allows a company’s articles of association to establish one or more classifications of shares. These may include shares with voting rights or no voting rights, shares with special rights to nominate directors or commissioners, redeemable or convertible shares, and shares with preferential dividend or liquidation rights.
This flexibility allows you to design a family holding company with different economic and governance rights. For example, one class of shares could retain voting control for the founder or a family council. Another class could provide dividend rights to children or grandchildren without giving them control over daily management. A third class could be held by a family investment vehicle.
The PT can then be supported by a shareholders’ agreement and a perjanjian pengelolaan, or management agreement. These documents can regulate voting, transfers, family employment, dividend policies, succession procedures, disputes, and the appointment of professional managers.
This structure is not the same as a trust. A PT is a separate legal entity whose ownership is represented by shares. A trust is based on the management of assets for beneficiaries according to a trust arrangement. Still, a PT with different share classes and strong contractual governance can perform several trust-like functions.
Transparency Is Not Optional
You should not establish a trust or PT structure to hide the true owner of assets. Minister of Law Regulation No. 2 of 2025 on the Verification and Supervision of Corporate Beneficial Owners requires corporations, including PTs, to identify and determine their beneficial owners.
The regulation covers individuals who control a corporation, can appoint or remove directors or commissioners, receive benefits from the corporation, or are the true owners of its funds or shares. This means that a trust-like structure must be designed with transparency, proper identification, and accurate reporting.
This is a positive development. A legitimate trust is not a secrecy device. Its purpose is organized ownership, responsible administration, and protection of beneficiaries. Trying to disguise ownership may create risks under anti-money laundering, tax, investment, and corporate regulations.
The Practical Conclusion
You should consider a trust or trust-like structure in Indonesia if your main goals are long-term asset management, family succession, professional administration, protection of vulnerable beneficiaries, and continuity across generations.
At the same time, you should not treat the word “trust” as a magic solution. Inheritance law, tax law, marital property rules, creditor rights, foreign ownership restrictions, and beneficial-owner reporting obligations still apply. A trust cannot lawfully be used to defeat legitimate creditors, avoid taxes, conceal ownership, or override mandatory inheritance rights.
My practical recommendation is to begin with a family asset map and a clear statement of your objectives. Then compare three possibilities: a regulated commercial trust or trustee arrangement, an Indonesian PT holding company with different share classes, or a combined structure using a PT, shareholders’ agreement, management agreement, will, and family governance rules.
You should have the final structure reviewed by an Indonesian notary, corporate lawyer, tax adviser, and inheritance specialist. The best solution is not necessarily the structure with the most sophisticated name. It is the one that is legally valid, transparent, tax-conscious, workable for the family, and strong enough to survive the founder’s retirement or death.
My name is Wijaya, writing for Wijaya & Co. We orchestrate to assist you navigate. Thank you for reading my posts.