PFII Law Seen as Key to Strengthening Long-Term Financing and Economic Resilience
The ratification of the International Financial Centre (PFII) Law is considered a strategic step to strengthen the national financial system while expanding access to financing for development amid global economic uncertainty. The existence of the PFII is expected to attract international capital without diminishing the authority of national financial authorities.
Josua Pardede, Chief Economist of PT Bank Permata Tbk, assessed that Indonesia needs an international financial centre with governance standards, legal certainty, and competitiveness on par with global financial hubs. According to him, the PFII is a medium- and long-term agenda to support investment financing, infrastructure development, green financing, climate financing, and financial market development.
“From an economic perspective, the PFII is important because Indonesia does not yet have a financial area specifically built with governance standards, institutional strength, legal certainty, and competitiveness equal to world financial centres,” Josua said on Wednesday (22/7/2026).
The House of Representatives (DPR) passed the PFII Bill into law during a plenary session on Tuesday (21/7/2026). The regulation is a mandate of Article 248A of Law Number 4 of 2026 concerning the Amendment to Law Number 4 of 2023 on Financial Sector Development and Strengthening (P2SK). Through this regulation, the government will regulate the establishment and institutional framework of the PFII, business activities in the financial sector and its supporting sectors, the formation of arbitration institutions and special courts, as well as central and regional government support.
From a monetary perspective, Josua assessed that the PFII has the potential to increase a more stable supply of capital and foreign exchange. However, he stressed that the implementation of this financial zone must remain within the national legal framework. According to him, the application of special rules in the PFII area does not mean creating a separate legal sovereignty. Several countries also implement special regulations in their international financial centres to enhance global competitiveness.
“The boundaries must be clear. The PFII is reasonably treated as a special regulation for international financial transactions that require certainty, speed, and global standards,” he said.
Josua reminded that there are several aspects that need attention in the implementation of the PFII. First, governance must be strengthened through the establishment of management institutions, supervisors, advisory boards, and clear accountability and reporting mechanisms. Second, the existence of the PFII must not reduce the authority of Bank Indonesia, the Financial Services Authority (OJK), the Deposit Insurance Corporation (LPS), the Ministry of Finance, or the Supreme Court. Inter-agency coordination must be clarified, especially in the supervision of banking, capital markets, foreign exchange, payment systems, consumer protection, taxation, and the prevention of money laundering crimes.
Third, Bank Indonesia must ensure that activities in the PFII do not trigger pressure on the rupiah exchange rate, the development of a parallel foreign exchange market, or the transfer of domestic funds from the rupiah system to foreign currencies. In addition, fiscal incentive policies must be applied in a measured manner. Josua stated that tax facilities can be provided to attract global financial institutions and high-value-added activities, but must be accompanied by time limits, economic requirements, reporting obligations, and sanctions for misuse.
He also emphasised that the PFII must be directed towards strengthening real sector financing, not merely becoming a registration location for financial service companies. “Fifth, the PFII must be directed towards real sector financing, not just a place for financial company registration,” he said.
Josua believes that if designed and implemented properly, the PFII can become an important instrument to deepen the national financial market, attract global investment, strengthen long-term financing, and reduce dependence on conventional financing sources. The government itself views the establishment of the PFII as part of a strategy to strengthen national economic resilience and enhance Indonesia’s competitiveness as a G20 member in attracting international financial activity amid global economic dynamics.