An Indonesian parliamentary panel has agreed with the government on key provisions for a bill establishing international financial centres, aiming to attract foreign investment with tax incentives and specialized legal frameworks.
The bill represents a significant effort by Indonesia to boost its financial sector and attract foreign capital, potentially positioning the country as a major financial hub in Southeast Asia and challenging established players like Singapore.
An Indonesian parliamentary panel has given its approval to key provisions of a bill designed to establish international financial centres within the country. The legislation aims to draw in significant foreign financial investment by offering competitive incentives, including tax holidays and exemptions, similar to those found in global financial hubs like Dubai. Bali is among the potential locations being considered for these centres.
The bill, which has undergone fast-tracked deliberation, also outlines the establishment of a dedicated governmental body reporting to the president and parliament, alongside an arbitration body and a special court to handle cases within these financial zones. Lawmakers have indicated that incentives could include a 50-year tax holiday for investors meeting specific criteria and exemptions on income generated outside Indonesia. The finance ministry estimates that these centres could attract between 300 trillion and 500 trillion rupiah ($16.7 billion to $27.82 billion) in investments.
Indonesia has long sought to bolster its financial sector and compete with regional rivals like Singapore in wealth management services. Wider approval of the bill is anticipated during a parliamentary vote scheduled for Tuesday, which typically follows the recommendations of such panels.