Indonesia’s introduction of a legal framework for commercial trust arrangements under the P2SK Law (enacted in 2023) marks a significant milestone in its financial regulatory landscape.

As a civil law jurisdiction, Indonesia previously did not recognize trusts. Now, companies and individuals can establish arrangements similar to common law trusts — by setting up securitization SPVs and managed trust funds — operated by licensed trustees.

Why is this landmark development important?

Commercial trust structures under the new P2SK Law allow individuals and businesses to place assets under the management of a professional trustee. As such, these structures support, among other things:

• flexibility in asset management;
• enhanced asset protection;
• risk mitigation and diversification;
• financial market participation;
• enhanced protection from creditor claims; and
• succession and estate planning.

As a result, clients can benefit from greater financial flexibility, confidentiality, and security — all within a framework that provides clearer legal recognition and regulatory oversight. These improvements enhance investor confidence and facilitate more effective wealth structuring.

What does this article discuss?

Drawing on their extensive experience in financial regulation and cross-border transactions, Erwin Kurnia Winenda (Partner) and Timothy Chow (Associate) explain the:

• key features of these trust-like structures,
• relevant regulatory and tax considerations;
• practical steps for establishing a commercial trust arrangement in Indonesia; and
• emphasize the importance of careful legal, tax, and regulatory compliance.

Read the full article here.

For further information about our legal services or how trust structures can assist your ventures, please contact the Partner (Erwin Kurnia Winenda) listed in the Key Contact section.