Indonesia Fast-Tracks Financial Center Law Amid Global Competition

Indonesia's House of Representatives has rapidly approved the Indonesian International Financial Center (IIFC) bill, a move that has drawn attention for its speed. The bill, which began deliberations on July 2, 2026, was ratified in just 18 days, significantly ahead of its initial inclusion in the 2026 National Legislation Program on June 23, 2026.

According to Deputy Speaker of Commission XI of the House, Mohamad Hekal, the bill's accelerated process aligns with the mandate of the Law on the Development and Strengthening of the Financial Sector (P2SK), which required the IIFC bill to be completed within three months. However, Hekal acknowledged a specific urgency that necessitated prioritizing this bill.

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We wanted to include it all in the P2SK Law, but this is rather large (the discussion of the P2SK Law as a whole), so we need time. But this has become a program that we are prioritizing because the spirit is that with the uncertain global conditions, there is a huge opportunity for money transfers that we must seize.

"We wanted to include it all in the P2SK Law, but this is rather large (the discussion of the P2SK Law as a whole), so we need time. But this has become a program that we are prioritizing because the spirit is that with the uncertain global conditions, there is a huge opportunity for money transfers that we must seize," Hekal told reporters after the plenary session ratifying the IIFC Law in Jakarta on Tuesday (July 21, 2026).

Hekal explained that the IIFC is expected to direct global fund flows toward Indonesia, emphasizing the government's current focus on attracting foreign capital. "Our hope is that if we don't do it in a hurry, other countries will capture it. Because many countries have also recently launched new financial centers. We heard Uzbekistan just launched one, and Vietnam even launched two at once. So we are indeed in a bit of a race," he elaborated.

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Our hope is that if we don't do it in a hurry, other countries will capture it. Because many countries have also recently launched new financial centers. We heard Uzbekistan just launched one, and Vietnam even launched two at once. So we are indeed in a bit of a race.

The urgency stems from Indonesia's critical need for substantial investment to stimulate economic growth. The establishment of the IIFC is anticipated to be a significant catalyst. "We hope they come here, the investment opportunities are right outside the fence of the IIFC," he stated.

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We hope they come here, the investment opportunities are right outside the fence of the IIFC.

Hekal also highlighted Bali as a primary destination for the IIFC, citing the significant number of foreign residents there whose assets have not yet been fully integrated into Indonesia's economy. "The hope is that they are here, their money follows, the investment opportunities are right in front of them. So it's not too difficult for them to move in and out," he said.

He added that tax regulations and other aspects outside the IIFC zone would remain unchanged. "So we hope it becomes an extraordinary additional liquidity, especially in the form of foreign exchange. This will also strengthen the rupiah's position, and later liquidity will be abundant for us to carry out the growth programs we expect," Hekal concluded.

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The hope is that they are here, their money follows, the investment opportunities are right in front of them. So it's not too difficult for them to move in and out.