Indonesia's financial hub to focus on financial, real sectors: Purbaya - ANTARA News Jawa Timur

Jakarta (ANTARA) - The proposed Indonesian International Financial Center (PFII) will operate as a dual engine for the national economy, targeting both aggressive financial sector activities and strengthening real sector financing, Finance Minister Purbaya Yudhi Sadewa noted.

Speaking at a House of Representatives (DPR RI) Commission XI working committee meeting on the PFII Bill in Jakarta, the Finance Minister emphasized that the mega-project is expected to drive productive investments that create jobs and bolster national economic growth.

"The establishment of the Indonesian International Financial Center aims to elevate Indonesia’s global competitiveness and firmly strengthen our national economic sovereignty,” Purbaya remarked.

Furthermore, he explained that the PFII aims to encourage deepening and innovation within the financial sector while attracting both domestic and global investments and business actors.

The financial hub will facilitate financing for the real sector, national strategic projects, sustainable and climate initiatives, infrastructure development, and other critical sectors to maximize the financial industry's contribution to the national economy.

Purbaya noted that the center also aims to promote equal economic opportunities, facilitate technology transfer, generate employment, and enhance the capacity of Indonesia's human resources.

In addition, the PFII is designed to strengthen the contribution of Islamic finance, the green economy, the blue economy, and industrial transformation, while developing internationally competitive capital markets, financial technology, digital finance, and robust market infrastructure.

To achieve these goals, the government and the DPR have focused the PFII Bill on key structural regulations. These include defining the PFII’s authority and institutional framework, as well as outlining its strategic direction as a competitive international hub capable of attracting foreign capital.

The legislation also regulates the scope of business activities within the PFII's jurisdiction, covering the financial sector, supporting financial services, and related businesses in other sectors.

Structurally, the bill mandates the formation of several dedicated bodies, including the PFII Advisory Council, the PFII Board, the PFII Management Institute, and the PFII Financial Services Supervisory Agency.

To ensure efficient dispute resolution, an independent PFII Arbitration Institute and a specialized PFII court will also be established.

Purbaya further explained that the bill includes provisions for competitive tax incentives and administrative facilities to attract global investors.

The fiscal incentives will encompass relief on income tax (PPh), value added tax (VAT), sales tax on luxury goods (PPnBM), and customs duties. Meanwhile, non-fiscal facilities will include the provision of golden visas, streamlined immigration, flexible employment regulations, and simplified business licensing and residency permits.

To align with global financial hub practices, specific provisions dictate that English will be used and business operations within the PFII will be transacted in foreign currencies.

Furthermore, the legal framework applicable within the zone allows PFII regulations to adopt, incorporate, or adapt principles of foreign jurisprudence, international commercial law, standard international financial center practices, and global benchmarks based on propriety and reasonableness.

"On behalf of the government, we accept the results of the discussions on the draft law at the Working Committee level, which served as the basis for the decision-making process for today's Level I discussions," Purbaya concluded.

Following the successful conclusion of the Level I committee talks, the executive branch has formally accepted the draft. The PFII Bill will now advance to a Level II vote during an upcoming plenary session of the Indonesian parliament to be passed into law.

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