Key Points of the Indonesian Financial Center (PFII) Bill Passed by the House of Representatives Today The House of Representatives (DPR) passed the PFII Bill, establishing an international financial center in Indonesia to attract global investment, increase competitiveness, and deepen financial markets.

The House of Representatives ( DPR ) officially ratified the Draft Law on the Indonesian International Financial Center ( RUU PFII ) into law during a DPR Plenary Session on Tuesday (July 21, 2026). This ratification marks a new milestone in the establishment of an Indonesian financial center , which is targeted to attract global investment and deepen the national financial market. Approval was granted after all DPR factions expressed their agreement with the results of the level I discussions previously agreed upon with the government in Commission XI. DPR Speaker Puan Maharani then sought the approval of all council members before ratifying the bill. "Now is the time to ask all session participants again whether the bill on the Indonesian International Financial Center (PFII) can be approved for enactment into law. Agree? Thank you," Puan said in the plenary session on Tuesday (July 21, 2026) at 10:39 a.m. WIB. The government submitted the draft to the House of Representatives in early July 2026 as a legal basis for establishing the first international financial center in Indonesia.

Deliberations on the PFII Bill proceeded swiftly. After being included in the 2026 Priority National Legislation Program (Prolegnas), Commission XI of the House of Representatives (DPR) formed a Working Committee (Panja) to discuss the substance with the government, industry players, regulators, academics, and financial services associations. On July 20, 2026, Commission XI and the government agreed to bring the bill to second-level deliberations before being passed the following day. The government believes the establishment of PFII is necessary to increase Indonesia's competitiveness in the face of competition from regional financial centers like Singapore, Hong Kong, and Dubai. In addition to attracting global capital flows, this region is expected to be a catalyst for financial market deepening, innovation in financial services products, and financing of national strategic projects.

Finance Minister Purbaya Yudhi Sadewa previously stated that the establishment of PFII was a strategic step to ensure Indonesia had an internationally recognized financial ecosystem without compromising the stability of the national financial system. He stated that the existence of a financial center would strengthen Indonesia's position in the global financial chain. Based on the results of the Working Committee's discussions, the law consists of 10 chapters and 73 articles that regulate institutions, incentives, governance, supervision, and dispute resolution mechanisms. Global Standard Financial Center The government emphasized that PFII is not just a new economic zone, but rather a center for international financial activity designed using global governance standards. In his explanation, Finance Minister Purbaya Yudhi Sadewa stated that the establishment of PFII aims to increase Indonesia's competitiveness as an international financial center, deepen the domestic financial sector, expand access to financing, and attract global investment. PFII Authority Has Special Authority The PFII Law regulates the establishment of a special authority responsible for managing the area, issuing permits, coordinating services, and ensuring that all financial activities are carried out in accordance with international standards. In discussions with Commission XI of the House of Representatives (DPR), the government emphasized that the institution was designed to speed up investment services without reducing the supervisory function of financial sector regulators. Tax and Customs Incentives to Attract Investors One of the main substances of the PFII Law is the provision of various fiscal and non-fiscal incentives to increase regional competitiveness. The government's discussion document states that the facilities include various forms of tax incentives, customs clearance, and administrative facilities for businesses that meet certain requirements so that Indonesia can compete with other international financial centers. Based on the academic text of the Draft Law (RUU) on PFII prepared by the government, the special tax regime in this special enclave will target income tax, value added tax (VAT), luxury goods sales tax (PPnBM), and import duties. Chairman of Commission XI of the House of Representatives, Mukhamad Misbakhun, revealed that the incentives to be offered to PFII will reach 100% for 50 years. "We will offer many incentives. The government will provide 0% tax for up to 50 years. Personally, I think it should be in place for as long as PFII exists. But the government wants 50 years," Misbakhun explained at the CNBC Investment Forum in Jakarta on Wednesday (July 15, 2026). Integrated Licensing and Ease of Doing Business The PFII Law also regulates an integrated service system to accelerate the investment process. The government considers bureaucratic simplification to be a crucial factor in attracting global investors to Indonesia as a base for regional financial activities. Legal Protection and Regulatory Certainty In discussing the bill, the DPR and the government emphasized the importance of legal certainty as the main foundation of financial centers. Therefore, the law regulates dispute resolution mechanisms, investor protection, and cross-regulatory coordination to ensure a credible and predictable business climate. The PFII will be a special region with distinct courts and a financial regime that differs from other regions in Indonesia. The PFII is said to provide legal certainty because it will have a special court with a common law system. For the record, common law is not the legal system adopted in Indonesia, as it is based on previous court decisions; while Indonesia adheres to a civil law system, which places written laws as the highest source of law. Supervision Continues to Involve OJK, BI, and Related Institutions Despite having regional authority, supervision of financial services activities is still carried out in accordance with the authority of each regulator. The government emphasized that the existence of PFII does not reduce the function of Bank Indonesia, the Financial Services Authority, the Deposit Insurance Corporation, or other authorities in maintaining the stability of the national financial system. Focus on Encouraging Deepening of the National Financial Market In addition to pursuing foreign investment, PFII is expected to accelerate the deepening of Indonesia's financial markets. Purbaya said the financial center would be an instrument to expand financing instruments, increase innovation in financial services, and increase the financial sector's contribution to national economic growth. The Ministry of Finance (Kemenkeu) estimates that up to IDR 500 trillion in foreign capital could potentially enter Indonesia thanks to the Indonesian International Financial Center. "At the very least, if we estimate it from a moderate perspective, it's probably around Rp300 trillion to Rp500 trillion. But again, this all depends on assumptions. We're competing with Singapore, Dubai, and others," explained Herman Saheruddin, Director General of Financial Sector Stability and Development at the Ministry of Finance, to reporters at the Senayan Parliament Complex, Jakarta, Wednesday (July 8, 2026). Target to Become a Regional Financial Hub The government hopes that the existence of PFII will make Indonesia one of the centers of financial activity in the Asian region. In various discussions in the House of Representatives (DPR), the government stated that Indonesia currently has the largest economy in Southeast Asia, but lacks an international financial center capable of competing globally. The presence of PFII is expected to bridge this gap.