Government Reveals Grand Concept for Indonesia International Financial Centre
The government and the House of Representatives (DPR) have commenced discussions on the Draft Law concerning the Indonesia International Financial Centre (PFII) at the working committee level, involving Commission XI of the DPR, the Ministry of Finance, the Ministry of Law, the Ministry of State Secretariat, and the Ministry of Investment/BKPM. Both the legislative and executive bodies have agreed that the PFII bill will be completed within 20 days, specifically by 20 July 2026, so it can be enacted into law during the DPR plenary session on 21 July 2026. This agreement was reached after the 23rd DPR Plenary Session of the 5th Sitting Period of the 2025-2026 Session Year approved the government’s proposal to include the PFII bill in the 2026 Priority National Legislation Programme on Thursday (2/7/2026).
Finance Minister Purbaya Yudhi Sadewa, during a preliminary meeting with Commission XI, explained the rationale behind the plan to establish the International Financial Centre (IFC). He stated that the formation of the PFII is necessary to enhance Indonesia’s competitiveness as an international financial hub, noting that countries with such centres have seen significant improvements in their competitiveness. “The establishment of the PFII is intended to increase Indonesia’s competitiveness as an international financial centre,” Purbaya said while delivering the government’s statement during the meeting with DPR Commission XI in Jakarta, as quoted on Friday (5/7/2026).
The PFII is expected to serve as 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. 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 global economic value chain. “The existence of an international financial centre also enables more efficient mobilisation of global capital and creates high value-added employment,” Purbaya added.
Purbaya admitted that Indonesia does not yet have a specially designed international financial zone with governance standards, institutional frameworks, legal certainty, and competitiveness on par with various international financial centres in other countries. Therefore, he considers the PFII bill crucial as a regulatory foundation. “We deem it necessary to establish the PFII as an area with specific characteristics to accommodate the needs of the global business and financial services industry,” he explained. Purbaya expressed confidence that the benefits of establishing the PFII will be felt widely, not only by business actors in the area but also by the national economy through increased investment, job creation, knowledge and technology transfer, human resource development, and the strengthening of Indonesia’s global competitiveness. “We hope that the discussion of the Bill on the Indonesia International Financial Centre will produce regulations capable of addressing Indonesia’s future economic development needs while still considering the mandate of the Law on Financial Sector Development and Strengthening,” he concluded.
The government already has a location plan for the PFII, with three potential sites in Bali. However, Purbaya could not reveal detailed locations as the bill is still under discussion by the government and the DPR. “Yes, it is still being discussed, there are alternatives, maybe several in Bali, maybe several points. But what is clear is that we will look for the most comfortable place for international investors,” Purbaya said when met by reporters at the DPR Building on Thursday (2/7/2026). When asked by reporters whether the PFII location would also be on Java Island, Purbaya could not confirm. Similarly, when asked if it would be in the Nusantara Capital City (IKN), Purbaya stressed that there are currently no plans for that. “If it’s on Java Island, I don’t know yet. As for IKN, there are no plans so far,” he clarified.
Purbaya emphasised that the PFII will have various facilities to attract global investment. These facilities will be specifically regulated in the PFII bill. “This bill also regulates various facilities and ease of doing business, including immigration, employment, residency, licensing facilities, and measured extension facilities designed to attract long-term investment and encourage high value-added economic activities in Indonesia,” Purbaya said during a working meeting with DPR Commission XI on Thursday (2/7/2026). With the regulatory certainty provided by these facilities, the government hopes the presence of the PFII can enhance Indonesia’s attractiveness as a global investment destination. Moreover, he continued, Indonesia currently lacks a specially designed international financial zone with governance standards, institutional frameworks, legal certainty, and competitiveness comparable to various international financial centres that have developed in other countries. “This policy is expected to increase Indonesia’s attractiveness as a global investment destination, while also maximising the economic benefits received by the public and the national business community,” Purbaya added.
Purbaya further stated that the success of the PFII will also be measured by global investors based on its ability to create legal certainty and a swift dispute resolution mechanism. Therefore, legal certainty is crucial and one of the main facilities that the PFII must provide. Consequently, the bill regulates the establishment of a PFII court with special authority to examine, adjudicate, and decide on disputes.