Danantara Becomes PFII Financier, Focusing on Risk and Governance
Danantara’s investment in the Indonesian International Financial Center does not automatically carry lower risks than direct investment in the real sector.
KOMPAS/DAHONO FITRIANTO
By Dimas Waraditya Nugraha
14 Jul 2026 08:00 WIB · Ekonomi & Bisnis
JAKARTA, KOMPAS — The government’s plan to establish the Danantara Investment Management Agency as one of the initial capital sources for the formation of the Indonesia International Financial Center (PFII) needs to be accompanied by strong governance and risk management. It is essential to ensure that the PFII has a clear institutional design and strategy to attract global investors.
Syafruddin Karimi, a Professor at the Faculty of Economics and Business of Andalas University, stated that Danantara’s investment in PFII does not automatically carry lower risks compared to direct investments in the real sector, such as industrial downstreaming.
Investments in PFII have different risk characteristics because they are related to market confidence in the credibility of a financial center.
“The Draft Law (RUU) on PFII states that the initial capital of the PFII Management Agency can come from business entities, Danantara, or other legitimate sources. This makes PFII not only a regulatory project but also an institutional investment project that can affect the balance sheet and reputation of Danantara,” said Syafruddin when contacted on Monday (13/7/2026).
According to him, PFII will face a number of risks, ranging from regulatory risks, reputational risks, money laundering, tax revenue risks, institutional risks, litigation, and failure to attract anchor investors. These risks differ from investments in the real sector, which are more influenced by project, commodity, technology, land, energy, and market factors.
Therefore, he assessed that Danantara’s involvement needs to be supported by an independent feasibility study, clear exposure limits, public audits, financial and economic return schemes, a prohibition on conflicts of interest, and a measurable exit strategy (exit mechanism).
Syafruddin said that if the market views PFII as a cheap tax space, a round tripping channel (a practice of back-and-forth transactions), or an area with weak supervision, Danantara’s reputation will also be affected.
“Global private capital must also bear the risks. If the entire initial burden rests on Danantara, this project could actually shift policy risks onto the balance sheet of state investment institutions,” he said.
Round tripping is a fraudulent practice involving simultaneous sales and repurchases. The goal is to manipulate financial statements, create the illusion of trading volume, and conceal illegal funds from investors, making them appear to be legitimate investments.
The provisions regarding the initial capital source of PFII have been outlined in the draft of the PFII Bill, which is currently under discussion in the DPR. Article 5 of the draft states that the initial capital of the Management Institution (LP) PFII may consist of cash funds, state-owned assets, assets owned by state-owned enterprises (BUMN), and/or other legitimate assets.
The initial capital source for LP PFII may come from business entities, the Danantara Investment Management Agency, and/or other legitimate sources in accordance with the provisions of the legislation.
The draft also stipulates that no later than 30 calendar days after receiving the initial capital, the Head of LP PFII is required to submit a work plan and budget for the use of that capital to the Governor of PFII for approval.
The government is currently expediting the preparation of the legal basis for the establishment of PFII. Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the PFII Law is targeted to be completed by July 21, 2026. After the law is enacted, the government will issue government regulations (PP) as implementing rules before the submission of the Financial Note and the 2027 State Budget Draft on August 16, 2026.
“This is parallel; we are also waiting for the law. We just need to wait for the government regulation, which will be issued after the law. Hopefully, everything will be ready before August 16,” said Airlangga last weekend.
Airlangga stated that the government is preparing Bali as the location for PFII. According to him, Bali has an international reputation, ease in attracting investors and business actors, and is supported by economic and infrastructure development, including the Special Economic Zone (KEK) of Sanur. However, the decision on the location is still being discussed with the DPR and will be further regulated both in the law and in the government regulation on PFII.
Through Law Number 4 of 2026 concerning Amendments to Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector, the government has previously regulated the establishment policy of PFII. This area is designed to have legal, administrative, and financial governance specificities that adopt international principles and standards.
In addition to regulating institutions, the PFII Bill also prepares a number of facilities, including tax incentives in the form of Income Tax (PPh), Value Added Tax (PPN), and Luxury Goods Sales Tax (PPnBM), as well as customs facilities.
The establishment of PFII will also bring changes to the institutional architecture of the national financial sector. Through the P2SK Law, the government has expanded the roles of several financial sector regulators, ranging from Bank Indonesia (BI), the Financial Services Authority (OJK), to the Deposit Insurance Corporation (LPS).
The regulation also expands the scope of banking business activities, not only collecting funds and distributing credit but also encompassing various other financial services.
Meanwhile, more detailed regulations regarding PFII are still being discussed through the PFII Bill. Based on the draft of the Bill, the operation of the area will be carried out by the PFII LP, which is