ASIATODAY.ID, JAKARTA — Indonesia is moving to strengthen its position in global finance as the government and the House of Representatives began deliberations on landmark legislation to establish the International Financial Center of Indonesia (PFII). The proposed bill forms part of the government’s long-term strategy to deepen domestic financial markets, attract international investment, and enhance the global competitiveness of Southeast Asia’s largest economy.
The PFII Bill would establish a dedicated international financial center operating under a globally competitive regulatory framework designed to attract international financial institutions, multinational corporations, investment funds, and other cross-border financial service providers, while reinforcing Indonesia’s domestic financial ecosystem.
Finance Minister Purbaya Yudhi Sadewa said the legislation is a key pillar of the government’s long-term economic transformation agenda, aimed at building a stronger, more resilient, and internationally competitive economy.
“Indonesia possesses the fundamental strengths to play a much larger role in the global financial ecosystem,” Purbaya told lawmakers during Thursday’s parliamentary hearing.
As Southeast Asia’s largest economy, Indonesia combines a domestic market of more than 280 million people, abundant natural resources, a strategic location along major global shipping routes, and solid long-term economic fundamentals. Despite these advantages, the country has yet to establish an international financial center supported by globally competitive regulations, legal certainty, and institutional capacity comparable to leading financial jurisdictions.
The PFII initiative is intended to address that gap by creating a dedicated ecosystem for international financial services while supporting the continued development of Indonesia’s domestic financial sector.
Under the proposed legislation, the international financial center would operate as a special jurisdiction within Indonesia, supporting global financial services, related industries, and other high-value economic activities while remaining fully under the sovereignty and constitutional framework of the Republic of Indonesia.
To enhance international competitiveness, the bill proposes a package of investment-friendly measures, including streamlined immigration procedures, residency facilities for foreign professionals, flexible employment regulations, simplified business licensing, and competitive tax incentives designed to encourage long-term investment.
A key provision of the legislation is the establishment of a dedicated commercial court to resolve disputes arising from business activities within the PFII, including international commercial cases connected to the financial center. The government argues that efficient dispute resolution and strong legal certainty are essential to attracting global financial institutions and institutional investors.
Beyond attracting international capital, policymakers expect the PFII to deepen Indonesia’s financial markets, expand financing for strategic national projects, accelerate sustainable finance, promote financial innovation, and strengthen the country’s integration into global capital markets. The initiative is also expected to generate broader economic benefits through increased foreign direct investment, high-skilled employment, technology transfer, and human capital development.
The PFII Bill is mandated under Indonesia’s amended Law on Financial Sector Development and Strengthening, providing the legal foundation for one of the country’s most significant financial sector reform initiatives in recent years.
If approved by Parliament, the legislation could mark an important milestone in Indonesia’s financial sector development, reinforcing the country’s long-term ambition to deepen its capital markets, strengthen investor confidence, and expand its role within Asia’s evolving financial landscape. (AT Network)
Follow Us at Google News, WA Channel, and LinkedIn