PUBLISHED : 21 Jul 2026 at 15:46
A woman walks past the logo of Indonesia's sovereign wealth fund Danantara, which is displayed in front of its headquarters in Jakarta on June 11. (Photo: Reuters)
JAKARTA - Indonesia's parliament passed a law on Tuesday to enable the foundation of international financial centres designed to boost foreign investment in banking and wealth management, and bolster economic growth.
Southeast Asia's largest economy has long sought to develop its financial sector by creating investment products capable of attracting greater foreign capital inflows into the country, with the government pursuing an ambitious target to raise growth to 8% by 2029.
The new law is intended to attract investment from large global banks, including investment banks, wealth management services as well as aircraft and ship leasing companies, said Mohamad Hekal, deputy head of parliament's financial commission.
All parties in parliament passed the law in an acclamation led by house speaker Puan Maharani.
The full text of the law was not immediately made available to the public following Tuesday's approval. However, authorities and lawmakers have indicated that it will offer a broad range of tax benefits to qualifying investors, modeled on the incentives provided by established financial hubs such as Dubai. Among the tax incentives offered in the law is a half-a-century long corporate income tax holiday for investors that meet certain criteria, lawmakers said.
"It is estimated there is around $3.2 trillion of wealth of the world's richest families held in various family offices across global financial hubs. It is estimated about 65% is currently looking for a new home. That is what we're aiming to capture," Hekal said.
The government has yet to determine the location of its first financial centre, which is projected to attract up to 500 trillion rupiah ($27.89 billion) in investment. Officials have previously identified the holiday island of Bali as one potential site.
Following the enactment of the legislation, Jakarta will establish a supervisory board and a dedicated governmental body for the financial centres, both of which will report to the president and parliament. The government will also set up an arbitration body and a special court to handle and adjudicate disputes arising within the financial centres.
The law also provides exemptions allowing the use of foreign currencies for business conducted in IFCs, Hekal said. Previously,Indonesia's rupiah currency was the sole legal tender.
Indonesia's sovereign wealth fund Danantara is to provide the initial capital for the establishment of a company that will run such a financial centre, he said, without providing details.