Government Prepares KEK Financial Centre in Bali, Offering Tax Exemptions and Special Legal Framework
Through a press conference on the outcomes of the Periodic KSSK II Meeting for 2026, the Government of the Republic of Indonesia is preparing the establishment of a Special Economic Zone (KEK) Financial Centre in Bali as part of a strategy to deepen the domestic financial market while attracting more integrated global investment flows.
This explanation was provided by the Chair of the OJK Board of Commissioners, Friderica Widyasari Dewi, stating that the establishment of a Financial Centre in Indonesia is intended as an accelerator for market deepening and a hub for financial services innovation.
“Not only will it increase global investment flows into Indonesia, the development of the Financial Centre will also focus on strengthening the investment ecosystem, financial services, and international capital management. Through the development of a broader financial ecosystem, the Financial Centre is expected to provide space for pilot projects, business model testing, and the implementation of various new financial products and services,” Friderica explained.
During the press conference, the Minister of Finance of the Republic of Indonesia, Purbaya Yudhi Sadewa, explained that the KEK Financial Centre in Bali will be built on an area of approximately 100 hectares. The zone is designed as an international financial centre capable of enhancing investment attractiveness while strengthening Indonesia’s position in the global financial ecosystem.
To provide legal certainty and boost confidence among international investors, the government also plans to implement a special common law-based legal regime in the zone. In addition, the government is preparing several strategic fiscal incentives, including tax exemption facilities for foreign investments entering and placed within the Bali KEK Financial Centre.
“We are designing a zone with a concept similar to that in Dubai. The zone will later be designated as a KEK with the application of certain laws based on common law. When foreign investment enters the KEK, that investment will be utilised to invest in other strategic projects, including Danantara projects and other projects outside the KEK that have growth potential and promising returns,” Purbaya explained.
The establishment of the KEK Financial Centre in Bali is expected to have a positive impact on the national economy, particularly in expanding sources of cheaper, competitive, and sustainable development financing for both the government and the private sector. Furthermore, the increase in foreign exchange inflows through foreign capital is seen as potentially strengthening the stability of the Rupiah exchange rate and enhancing the resilience of the domestic financial sector.
Currently, the government is still refining the zone’s design, regulatory framework, and implementation scheme for the Bali KEK Financial Centre. The policy formulation is being carried out through intensive coordination between the Ministry of Finance, the Coordinating Ministry for Economic Affairs, Bank Indonesia, the Financial Services Authority (OJK), and BPI Danantara to ensure regulatory readiness, institutional preparedness, and global competitiveness of the zone.
For information, Indonesia currently has a Financial Centre located in IKN. The Financial Centre in question has offered limited tax incentives specifically for taxpayers making investments.
Referring to Minister of Finance Regulation Number 28 of 2024 (PMK 28/2024), the government provides a 100% and 85% maximum tax holiday facility for up to 25 years. A 100% tax holiday is given for banking, insurance, and Islamic finance in the IKN financial centre. The government also provides a withholding tax exemption facility for 10 years specifically for investors who are foreign tax subjects (SPLN).
Meanwhile, an 85% tax holiday is provided for the capital market sector, commodity exchanges, pension funds, financing, venture capital, fintech, guarantees, bullion, trusts, SPVs, financial holding companies, financial market infrastructure, money and forex markets, payment system service providers, and other financial services.