Key facts
- Indonesia's parliament passed a law to establish international financial centers.
- The law aims to attract foreign investment and boost economic growth.
- Incentives include a potential 50-year tax holiday and exemptions on foreign-sourced income.
- The centers are projected to attract up to 500 trillion rupiah ($27.89 billion) in investment.
- A supervisory board, governmental body, arbitration body, and special court will be established.
Indonesia's parliament has passed a law to enable the establishment of international financial centers, a move designed to attract foreign investment and stimulate economic growth. The legislation, approved by all parties, aims to bolster the country's financial sector and compete with regional hubs like Dubai. Potential investors may benefit from incentives such as a 50-year tax holiday for those meeting specific criteria, exemptions on income generated outside Indonesia, and selective value-added tax exemptions. The government plans to establish a supervisory board, a dedicated governmental body, an arbitration body, and a special court to manage and adjudicate matters within these centers. The holiday island of Bali is being considered as a potential location for the first financial hub, which is projected to attract up to 500 trillion rupiah ($27.89 billion) in investment. The government has an ambitious target to raise economic growth to 8% by 2029.