ASIATODAY.ID, JAKARTA — Indonesia has taken a major step toward strengthening its position in the global financial landscape after the House of Representatives (DPR) officially passed the International Financial Center of Indonesia (PFII) Law, establishing a comprehensive legal foundation for the development of an internationally oriented financial center.
The landmark legislation, approved during the DPR plenary session in Jakarta on Tuesday, July 21, 2026, is expected to enhance Indonesia’s financial competitiveness, attract high-quality global investment, and expand long-term financing sources to support sustainable economic growth.
The establishment of PFII reflects Indonesia’s ambition to play a greater role in the international financial ecosystem by leveraging its position as Southeast Asia’s largest economy and a member of the G20.
Mohamad Hekal, Chair of the DPR Working Committee (Panja) on the PFII Bill and Deputy Chairman of Commission XI, said the legislation is not merely about creating a new financial zone, but about building a world-class financial ecosystem.
“This law is not simply intended to establish a new area, but to develop an international financial ecosystem capable of attracting quality investment, deepening the national financial market, while continuing to uphold Indonesia’s national interests and legal sovereignty,” Hekal said.
He added that PFII is expected to strengthen Indonesia’s financial services sector, diversify development financing sources, improve market competitiveness, and create more high-skilled employment opportunities.
Finance Minister Purbaya Yudhi Sadewa welcomed the parliamentary approval, describing the PFII Law as a strategic milestone in Indonesia’s economic transformation.
He said Indonesia’s growing economic capacity requires a credible, independent, integrated, and globally competitive financial center capable of supporting international capital flows and expanding access to long-term financing.
“As the largest economy in Southeast Asia and a member of the G20, Indonesia is ready to establish its own financial center that is credible, independent, integrated, and globally competitive,” Purbaya said.
The Finance Minister emphasized that PFII is designed to complement Indonesia’s existing financial system rather than replace it. The initiative will provide an internationally connected ecosystem to support investors, encourage financial innovation, and strengthen Indonesia’s role in global capital markets.
The development of PFII will be based on three strategic pillars:
– Expanding access to capital and investment to support economic development;
– Building an innovative financial ecosystem with internationally recognized governance standards; and
– Strengthening national competitiveness through technology transfer, human capital development, and the creation of high-value jobs.
The PFII Law regulates key elements of the financial center, including its establishment, objectives, institutional framework, business activities, governance mechanisms, arbitration institutions, specialized financial courts, government support, tax incentives, and other investment facilities.
The legislative process involved consultations with key stakeholders, including Bank Indonesia, the Financial Services Authority (OJK), the Deposit Insurance Corporation (LPS), the Supreme Court, relevant ministries, academics, industry associations, and financial sector representatives.
The government believes PFII will strengthen Indonesia’s ability to compete with established financial centers across Asia by providing greater legal certainty, investment facilitation, and a globally integrated financial ecosystem.
With the enactment of the PFII Law, Indonesia moves closer to its ambition of becoming a competitive international financial center in Asia, strengthening economic resilience while expanding its role in the Asia-Pacific financial landscape. (AT Network)
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