Government Explains Rationale Behind Indonesia International Financial Centre (PFII)
The government, together with the House of Representatives (DPR), has officially commenced discussions on the Draft Law concerning the Indonesia International Financial Centre (PFII). The bill’s introduction is mandated by Article 248A of Law No. 4 of 2026, which amends Law No. 4 of 2023 on Financial Sector Development and Strengthening (P2SK). It represents a strategic move by the government to build a modern, competitive, and internationally standardised financial ecosystem to strengthen the national economy’s competitiveness amidst global economic dynamics.
Finance Minister Purbaya Yudhi Sadewa stated that the establishment of the PFII is part of the government’s efforts to realise a stronger, more inclusive, sustainable, and globally competitive national economy, as mandated by the Asta Cita programme. This policy also implements the national development goals enshrined in the 1945 Constitution of the Republic of Indonesia, namely to achieve the welfare and prosperity of all Indonesian people.
“The establishment of the Indonesia International Financial Centre is intended to enhance Indonesia’s competitiveness as an international financial hub. The PFII is expected to be a catalyst for deepening the national financial sector, developing financial service innovation, increasing investment, facilitating financing for priority sectors and national strategic projects, promoting sustainable financing, and strengthening the financial sector’s contribution to Indonesia’s economic growth,” Purbaya said in a written statement on Friday (3/7/2026).
Purbaya explained that global economic developments show international financial centres have become important instruments for many countries in attracting investment, expanding financing access, accelerating financial service innovation, and strengthening their position in the world economic value chain. The existence of an international financial centre also enables more efficient global capital mobilisation and creates high-value-added employment.
According to Purbaya, Indonesia possesses strong capital to assume a greater role in the global financial ecosystem. The large national economy, vast domestic market, strategic geographical position, abundant natural resources, and long-term economic growth prospects provide a solid foundation for developing an international-standard financial activity hub. However, Indonesia currently lacks an international financial zone specifically designed with governance standards, institutional frameworks, legal certainty, and competitiveness comparable to other global financial centres.
On this basis, the government deems it necessary to establish the PFII as a zone with specific characteristics to accommodate the needs of the global business and financial services industry. To ensure the zone operates effectively, the government proposes the formation of institutions responsible for administration, management, supervision, and dispute resolution. These institutions are designed based on the principles of professionalism, independence, transparency, and accountability, while maintaining close coordination with the government.
In addition to providing space for the development of various modern, internationally standardised financial products and services, the PFII Bill also regulates a number of business facilitation measures to enhance investment attractiveness. These facilities include immigration, employment, residency, and licensing conveniences, as well as carefully calibrated incentives designed to attract long-term investment and encourage high-value-added economic activities.
Regarding legal certainty, the government proposes the establishment of a PFII Court with special authority to examine, hear, and adjudicate disputes related to business activities within the PFII zone, as well as international commercial disputes connected to the zone. The presence of a fast, professional, and credible dispute resolution mechanism is expected to further boost investor confidence in Indonesia as a global investment destination. The bill also opens the door for the adoption of international best practices through the incorporation or adaptation of international commercial law principles and global standards proven to enhance efficiency and certainty in international business activities.
Purbaya stressed that this policy is not intended to diminish national legal sovereignty, but rather to strengthen Indonesia’s competitiveness in attracting global investment and economic activity. The formulation of these provisions was also conducted through dialogue and coordination with the Supreme Court. “The government hopes that the discussion of the PFII Bill will produce regulations capable of addressing Indonesia’s future economic development needs, while still observing the mandate of the Financial Sector Development and Strengthening Law,” Purbaya concluded.