Indonesian conglomerates eye Hong Kong for strategic expansion

22nd April 2024 – (Hong Kong) Representatives from some of Indonesia’s prominent family conglomerates have expressed a keen interest in establishing family offices in Hong Kong. This move, facilitated by the Indonesian Employers Association (APINDO), marks a strategic pivot towards leveraging Hong Kong’s unique position as a gateway to mainland China’s burgeoning markets.

The delegation’s visit, which represents APINDO’s first organised tour to Hong Kong, highlights the city’s appeal as a strategic hub for international business and finance. Kennedy Wong, the chairman of the DAB Business and Professional Affairs Committee and a member of the Legislative Council, emphasized that the establishment of family offices in Hong Kong is not a novel trend but a well-established practice that has seen steady growth over the years. Prominent families from mainland China, Hong Kong, and abroad have long favoured the city for its business-friendly environment.

Hong Kong offers a host of advantages that are particularly attractive to wealthy families looking to manage and grow their assets. These include the absence of foreign exchange controls, low tax rates, and the stability offered by the ‘One Country, Two Systems’ framework. Unlike Singapore, where family offices must obtain licenses, Hong Kong provides a more streamlined and less regulated setup process.

During their visit, the Indonesian delegation responded positively to Hong Kong’s National Security Law, viewing it as a stabilizing factor that could enhance business confidence. Shinta W. Kamdani, the chairperson of APINDO, noted that the legislation contributes to a more stable and secure environment for investors.

The delegation’s interest was not limited to setting up family offices; they also explored potential investments in high-tech and artificial intelligence sectors, aiming to bring these advanced technologies from the Greater Bay Area to Indonesia. This aligns with APINDO’s broader strategy to foster collaboration between Indonesian businesses and their Hong Kong counterparts, facilitating the transfer of knowledge and technology.

Looking ahead, Kennedy Wong plans to revisit Indonesia in July to meet with local conglomerates and further discussions on potential collaborations. The DAB Business and Professional Affairs Committee, under Wong’s leadership, seeks to align more closely with national policies and the special administrative region’s strategies to play a pivotal role in promoting Hong Kong’s economic development.

The committee, a part of the broader Democratic Alliance for the Betterment and Progress of Hong Kong (DAB), reflects the party’s commitment to engaging more deeply with the business and professional sectors. By leveraging Hong Kong’s strategic position and fostering international partnerships, the committee aims to enhance Hong Kong’s role as a global financial hub.