Indonesia Accelerates International Financial Center Plan

Indonesia is fast-tracking the creation of the Indonesia International Financial Center (PFII) to seize opportunities presented by shifting global capital. The government views the PFII as a crucial tool to attract foreign investment, boost liquidity, and bolster national development financing, especially during times of global economic uncertainty.

The legislative groundwork for the PFII was solidified when the House of Representatives (DPR) passed the PFII bill into law on Tuesday, July 21, 2026. While the law is enacted, the PFII cannot commence operations immediately. The government must first finalize several implementing regulations, a process anticipated to take six months.

Finance Minister Purbaya Yudhi Sadewa expressed optimism that the PFII could become operational swiftly, ideally within the current year. He noted that heightened global uncertainty actually increases the demand for international financial hubs. "We will see what Presidential Decrees and other regulations still need to be drafted. We expect the implementing regulations within six months. We hope for operations as soon as possible. We can try for this year. Because uncertainty is higher. That is where the demand for financial centers increases," Purbaya stated at a press conference.

Addressing funding concerns, Purbaya clarified that the PFII's development would not be solely reliant on the state budget. Initial capital will come from investors, including the Indonesia Investment Authority (Danantara). "So it's not all from the state budget. Investors will provide the initial funds to build there, including Danantara. The amount of money is quite large, not from the state budget," he explained. The state budget will serve as a temporary backstop for operational expenses if needed, but Purbaya indicated this support would be limited, as Danantara's funds are deemed sufficient for the initial phase.

The government is also still evaluating potential locations for the PFII, with areas like North Bali, the Kura Kura Bali Special Economic Zone (KEK), and Sanur KEK under consideration. The final decision will hinge on factors such as infrastructure readiness, construction costs, and the location's appeal to foreign investors. "There are several names proposed, some in North Bali, some in Kura Kura, some in Sanur. But there is no final proposal yet. We will choose the most sensible, fastest to implement, cheapest for the country, and most capable of attracting foreign investors," Purbaya added.