Indonesia is developing a new international financial center designed to attract global capital and strengthen the country’s position in international financial services. On 21 July 2026, the House of Representatives approved the Law on the Pusat Finansial Internasional Indonesia (PFII).
August 2026 update: President Prabowo announced Jakarta as the initial PFII location on 14 August 2026, while confirming plans to develop PFII in Bali at a later stage. The exact Bali location has not yet been confirmed.
This article explains what the Indonesia International Financial Center is, what opportunities could emerge for foreign investors, and what businesses should prepare while the implementing regulations are still being finalized.
What Is Indonesia’s International Financial Center?
The Indonesia International Financial Center (PFII) is a dedicated financial zone created by law to attract global capital, broaden the country’s financing sources, and strengthen Indonesia’s competitiveness as an international financial hub.
The PFII Law sets a clear structure for the zone, including tax and customs incentives, streamlined licensing, robust dispute resolution, and strong supervision.
PFII is built to meet the needs of global businesses and financial institutions, while working alongside Indonesia’s existing financial system. It is intended to operate as a complementary ecosystem, not a substitute.
The government’s intention behind PFII rests on three pillars:
- Expanding access to global capital as a long-term source of development financing
- Building a modern financial services ecosystem supported by technology, cybersecurity, and internationally standardized governance
- Strengthening human capital competitiveness through job creation, technology transfer, and talent development in the financial sector
Indonesia is the largest economy in Southeast Asia and a G20 member, but it has long lacked a financial center that can compete with Singapore, Hong Kong, or Dubai. PFII aims to close this gap by providing a dedicated platform for international financial activity.
PFII will operate with its own authority, courts, and arbitration body for commercial disputes. Combined with targeted tax and non-fiscal incentives, this makes Indonesia a credible and practical alternative for global financial operations.
Why Is Bali Being Positioned as an International Financial Center?
The government has chosen Bali, and more specifically the KEK Kura Kura Bali special economic zone in Denpasar, as one of the planned sites for PFII.
Regulatory competitiveness and quality of life drive this choice, according to Coordinating Minister for Economic Affairs Airlangga Hartarto. Financial centers need environments free from major-city congestion.
Several factors support Bali’s positioning as an Indonesian financial center.
Bali’s International Reputation
Bali is already recognized worldwide as a business and tourism destination. Global name recognition is essential to attract investment. Few places in Indonesia match Bali’s international profile.
Why Kura Kura Bali Has Been Considered
The KEK Kura Kura Bali special economic zone is developing a Business Hub that connects the Global Blended Finance Alliance, a business school, and important investment channels.
By early 2026, the zone had attracted about IDR 1.62 trillion in investment and created more than 2,100 jobs. This strong track record puts KEK Kura Kura Bali in a leading position even before the PFII designation.
Infrastructure and Global Connections
Bali’s international airport, well-developed tourism infrastructure, and steady flow of global business travelers give the island a logistical edge over any undeveloped site.
The government is still finalizing the zoning and boundaries within Bali. PFII will be developed as a separate project from the Sanur Health Special Economic Zone.
What Opportunities Could Bali’s Financial Center Create for Foreign Investors?
If PFII in Bali moves forward as intended, investors will see new opportunities beyond the island’s established tourism, hospitality, and villa sectors.
The PFII framework will create more options for businesses and investors in financial services, investment management, regional operations, and cross-border activities.
Financial institutions, fund managers, private equity firms, multinational companies, family offices, and treasury teams will have new choices to explore. If your business considers investment holding or regional financial structures, this is a good time to see whether Indonesia could be a practical alternative to your current offshore setup.
PFII’s development will also increase demand in related sectors. A strong financial hub attracts professional services, corporate housing, international schools, and quality commercial real estate. Businesses operating in Bali or planning to enter the market can benefit from this wider ecosystem.
The full benefits and eligibility criteria depend on the final implementing regulations. Now is the right time for foreign investors to review and prepare their investment and business structures.
ILA Global Consulting is ready to help you assess your business structure and investment plans in Indonesia as the PFII framework develops.
What Should Foreign Investors Prepare Before PFII Becomes Operational?
Whether you invest in Bali through PFII or another route, you will need to apply the same core due diligence required for any Indonesian business structure.
Here is what you should review now to move forward with confidence.
Review Your Business Structure
Assess whether a PT PMA (foreign investment company) is the right vehicle for your plans, or if your existing Indonesian entity is already structured to benefit from PFII once it becomes operational.
Review your shareholding, capital requirements, and confirm that your entity type matches the business activity you plan to run in or alongside the zone.
If you already operate a PT PMA elsewhere in Indonesia, revisit your compliance and obligations before expanding into PFII-related activities.
ILA Global Consulting can review your PT PMA structure, shareholding, and compliance position to ensure you are ready for PFII opportunities.
Review Your Business Activities and KBLI
Every business activity in Indonesia is defined by a KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) code. This code determines what your foreign-owned company can legally do and which licenses you will need.
Before you commit to any PFII-linked activity, confirm that your planned business activity is open to foreign ownership and that the licensing pathway is clear. PFII’s specific business classifications are still being finalized, so clarity now will prevent delays later.
This is especially important in Bali, where recent restrictions on PT PMA registration already limit which activities foreign-owned companies can register under certain risk categories.
Assess Your Investment Structure
Setting up an investment structure in Indonesia involves more than just registering a company.
You need to decide how to structure your capital, allocate ownership, choose the right investment vehicle, and determine whether a holding company or direct PT PMA fits your goals. Plan how your Indonesian operations will connect with any parent or offshore entity.
Review Tax Implications
The PFII Law allows for tax and customs incentives, and lawmakers have discussed options such as a possible 0% tax rate for a set period. The exact criteria, rates, and duration will only be confirmed once the implementing regulations are issued.
Treat any current figures as indicative, not guaranteed. Plan your tax structuring based on confirmed options available in Indonesia today. We can help you review your current tax structure and manage your ongoing Indonesian tax filings and reporting as your business grows.
Assess Location and Licensing Requirements
If you plan to build operations in Bali, whether inside KEK Kura Kura Bali or elsewhere, you must verify zoning status, KEK designation, business licensing through Indonesia’s OSS system, and local government requirements for each location.
PFII’s special status does not remove the need for standard due diligence on land use, permits, and local compliance. You will still need building approvals such as PBG and SLF for any physical premises.
ILA Global Consulting can review your licensing and compliance requirements, including OSS, zoning, PBG, and SLF, to ensure your planned operations are fully compliant.
| Plazo | Definición |
|---|---|
|
OSS (Online Single Submission) |
Indonesia’s integrated electronic business licensing system used by businesses to obtain and manage business licences and fulfil regulatory requirements based on their activities and risk level. |
|
PBG (Persetujuan Bangunan Gedung/Building Approval) |
An approval required for the construction, alteration, expansion, or other development of a building, confirming that the proposed building complies with applicable technical and regulatory requirements. |
|
SLF (Sertifikat Laik Fungsi/Certificate of Proper Function) |
A certificate confirming that a completed building has been assessed as meeting the required technical and functional standards and is suitable to be used for its intended purpose. |
Preparing Your Investment Route in Bali
PFII has been enacted but is not yet operational. Implementing regulations will determine the location, supervisory authority, and tax and customs incentives.
Bali is positioned to become Indonesia’s international financial center, with KEK Kura Kura Bali as its core. The zone is designed for financial institutions, fund managers, family offices, and multinational treasury teams seeking a reliable Southeast Asian base outside Singapore or Dubai.
Investors who address entity structure, KBLI classification, investment vehicle, and location due diligence early will be ready to act when the zone opens. This avoids starting from scratch after the rules are finalized.
If you are considering how PFII fits with your investment plans in Bali, ILA Global Consulting can review your structure, activities, and licensing against current and expected regulations. Contact us to discuss your plans, or access our free guides for practical insights on investing and operating in Indonesia.
Preguntas frecuentes
No. The PFII Law was passed on July 21, 2026, but it only provides the legal framework. The government still needs to issue implementing regulations covering the exact zone boundaries, the supervisory authority’s structure, and the technical details of tax and customs incentives before the Bali financial center can begin operating.
The government has designated KEK Kura Kura Bali, in Denpasar, as the intended anchor location. However, discussions are ongoing about extending investment beyond Bali’s southern region toward the north, east, and west of the island, so the final boundaries are not yet fixed.
Not automatically. PFII is intended primarily for financial institutions, investment managers, private equity firms, multinational treasury operations, family offices, and related cross-border financial activities. Eligibility criteria and permitted business classifications will be defined through the implementing regulations.
No. PFII introduces a new regulatory zone with its own incentives and licensing pathway, but investors will still need an appropriate legal entity, whether a PT PMA or another structure, to operate legally in Indonesia. The right structure depends on the specific business activity and how it fits within PFII’s eventual scope.
Investors should use this period to review their business structure, confirm their intended activities against current KBLI classifications, assess their investment and holding structure, and monitor regulatory updates, rather than waiting until the zone is fully operational to start preparing. ILA Global Consulting can help you review your investment structure, business activities, and licensing position while the PFII framework is being developed.
