Indonesia has officially established a new legal framework to build the ‘Indonesia International Financial Center’ (let’s call it ‘The Center’), with Bali chosen as the specific location.
This move signals a major shift. The goal is simple: bring global financial leaders to Indonesia, build a stronger local market, and fund major projects across the country.
Here are the key takeaways from the new law:
1. Bali is the Spot.
Despite concerns about local rules, like building height restrictions, the government decided the international financial center stays in Bali as the initial plan.
As Coordinating Minister for Economic Affairs Airlangga Hartarto explained, a world-class financial hub needs more than just office buildings. It requires top-tier healthcare, high-end housing, and an attractive lifestyle to draw global talent.
Bali offers those perks, supported by existing developments like the KEK Sanur medical zone, mirroring successful international models like the Dubai International Financial Centre.
2. USD19–31 Billion Investment Target
Indonesia is aiming high, targeting between Rp300 trillion and Rp500 trillion (approx. USD 19–31 billion) in incoming capital. Achieving this will depend on Indonesia’s ability to compete with established hubs like Singapore and Dubai. The goal is to get international companies and foreign banks to set up actual entities and branches in Indonesia.
3. Up to 50 Years of 0% Tax
To compete head-on with Singapore, Dubai, and other regional low-tax jurisdictions, Indonesia is offering tax incentives at a 0% rate for up to 50 years.
This special tax regime for The Center will target income tax, VAT, luxury goods tax, and import duties. The government is also promising smoother customs processes and simplified administration for eligible businesses.
More detailed provisions regarding the types, recipients and conditions of incentives still require regulation through derivative regulations.
4. Special Authority and Faster Approvals.
The Center will be managed by a dedicated authority responsible for the area’s administration, business licensing, and coordinating investments. Think of it as a specialized fast-track team for financial investors and players.
It will be led by a Board of Governors appointed directly by the President. Beyond just managing the space, this authority will ensure all financial activities meet international standards.
A fully integrated licensing system is also in the works to slash red tape. The government knows that ease of doing business is critical to attracting global corporations.
5. Separate Financial Services Supervision.
Supervision in The Center will involve a specialized Financial Services Supervisory Body, which will function differently from the traditional regulatory institutions like Central Bank or Financial Services Authority/OJK.
6. Dedicated Courts with Final Decisions.
The law also establishes a special court within The Center to handle disputes related to its business activities. Decisions from this special court will be final and binding. This means no appeals, no Supreme Court reviews, nothing.
This represents a different legal mechanism from the rest of Indonesia. The special court will actually use a common law approach, whereas the broader Indonesian legal system is rooted in the civil law tradition. This is specifically designed to give international investors certainty that disputes can be resolved predictably.
7. Capital Directed Toward Local Growth
Funds coming into The Center won’t just stay in a bubble. The fund can be used to back profitable Indonesian business initiatives and infrastructure projects.
Finance Minister Purbaya Yudhi Sadewa noted that investors can choose between private projects, government developments, or government bonds. Investment decisions will remain completely profit-driven and market-led.
8. Built for Global Trust, Not Tax Evasion
The government stressed that The Center is meant to be a legitimate global hub, not a tax shelter. Full compliance with international anti-money laundering laws and global tax transparency standards will be strictly enforced.
Indonesia is stepping forward to join Asia’s leading financial hubs. By blending Bali’s global lifestyle magnetism with powerful tax breaks, streamlined licensing, and common‑law protections, the country is drawing international financial activity that once flowed elsewhere.