Indonesia’s International Financial Centre (Pusat Finansial Internasional Indonesia, or PFII) is envisaged as a designated area with financial and administrative autonomy and specific legal arrangements. The new framework connects investment, financial activity, regulation, and commercial dispute resolution.
- A dedicated framework combines financial activities, investment management, supporting professions, and selected other activities.
- Licensing, domestic-market boundaries, dispute clauses, and continuing compliance require careful attention.
- The statutory framework is a starting point. Operational readiness depends on implementing rules, institutional arrangements, and eligibility conditions.
The statutory foundation
Law 4/2026 amends the Financial Sector Development and Strengthening framework and introduces Article 248A as the statutory basis for PFII. Law 6/2026 then provides a dedicated framework for its establishment, institutions, activities, and operation.
Under Article 3, the Central Government establishes a PFII through a Government Regulation proposed by the Minister of Finance. The proposal includes its location, capital, and feasibility study. More than one PFII may be established, with separate institutional structures; the proposed location must not be within a Special Economic Zone.
The policy objectives include stronger international competitiveness, financial deepening and innovation, investment attraction, and financing for the real economy and strategic projects. These objectives need to be translated into operating institutions and detailed rules.
Timeline reproduced from the 14 October 2026 edition. Implementation and subsequent regulations should be checked before relying on the framework.
Business activities and the ecosystem
Article 7 contemplates business entities, legal-person entities, special purpose vehicles, trusts, and other legal entities determined under PFII Council Regulations. This creates questions about the vehicle, licence, investor profile, and activities intended to be carried out within or from PFII.
| Layer | Activities described in the publication |
|---|---|
| Financial sector | Banking, insurance, Sharia finance, capital markets, derivatives and carbon exchanges, pension funds, financing, venture capital, financial technology, guarantees, international commodity trading, bullion, trusts, financial instruments, holding companies, money and FX markets, family offices, and investment management. |
| Supporting professions | Accountants, appraisers, notaries, legal and financial consultants, investment managers, tax consultants, actuaries, and Islamic financial services experts. |
| Other sectors | Transport, accommodation, healthcare, waste management, tourism, food and beverages, and activities determined by the Council. |
Article 6 also contemplates an international Sharia financial ecosystem and the adoption of internationally recognised Sharia principles, rules, and standards. Further rules will determine how these statutory categories operate in practice.
Governance, regulation, and market safeguards
The President delegates management authority to the Governor of PFII, who is directly accountable to the President. The Advisory Board, chaired by the Minister of Finance and including BI, OJK, LPS, and PPATK leadership, provides policy recommendations that the PFII Council must consider.
| Institution | Role |
|---|---|
| PFII Council | Strategic policies, Council Regulations, annual plans and budgets, and oversight of the management and supervisory institutions. |
| LP PFII | Operations and the regulation and supervision of other, non-financial business sectors. |
| LPJK PFII | Independent regulation and supervision of financial activities and supporting financial services, including licensing, examinations, consumer protection, sanctions, and financial stability. |
Coordination with domestic and international authorities remains part of the framework. Financial-sector permissions are also subject to domestic-market ring-fencing: restrictions address deposits from elsewhere in Indonesia, product sales to that market, rupiah accounts, and domestic lending, subject to the applicable approvals and exceptions. A PFII licence should therefore be assessed against the intended customer, currency, and territorial scope.
Key references: Articles 8–16, 18, 21, and 29–31 of Law 6/2026, as discussed in the publication.
A special legal framework within Indonesia
The publication describes English as the language used for PFII decisions, policies, contracts, and judicial proceedings. Indonesian law generally applies, with the statutory exceptions concerning civil and business law and the rules established through the PFII framework. Council Regulations may adopt or adapt international commercial principles, jurisprudence, standards, and financial-centre practices.
Article 68 distinguishes activities within PFII from activities elsewhere in Indonesia. A licence issued by a PFII authority does not, by itself, authorise operations outside PFII within Indonesia. Cross-border activities remain subject to the relevant PFII rules and generally applicable Indonesian law.
Business activities use foreign currencies, with rupiah permitted for supporting operational and daily transactions. The framework provides for capital movement and repatriation, subject to Council Regulations. These arrangements do not remove obligations concerning anti-money laundering, counter-terrorism and proliferation financing, beneficial ownership, access to tax information, and international information exchange.
Article 70 addresses financial instruments, derivatives, investment management, exchanges, OTC markets, and other regulated mechanisms. Product and platform design therefore needs to be considered together with the applicable licence and supervisory rules.
Arbitration and the PFII Court
The framework provides for a PFII Arbitration Institution handling arbitration, mediation, conciliation, expert determination, and other alternative dispute resolution. Party agreement matters: the choice of arbitration affects the PFII Court’s jurisdiction over the dispute.
The PFII Court is a special court within Indonesia’s general court system, with first-instance and appellate levels and independent non-judicial administration. Its jurisdiction covers specified business, contract, transaction, tax-facility, insolvency, institutional, and other civil matters connected to PFII, together with matters parties agree to submit.
Appellate decisions generally have no further cassation or judicial-review route. A specific cassation exception concerns refusal to recognise and enforce international arbitral awards involving national interests. Criminal matters remain with district courts under the applicable framework.
Judicial arrangements contemplate Supreme Court justices and qualified ad hoc judges, including foreign nationals under specified conditions. First-instance panels have three judges; appeals use three or five, with at least one Supreme Court justice on each panel. Procedural rules may address expedited and ordinary cases, interim measures, evidence, electronic case management, remote hearings, and confidentiality.
Court decisions and recognised awards may be enforced across Indonesia. Judicial cooperation, protective measures, and enforcement arrangements are therefore part of the contract and dispute-planning exercise, rather than matters to leave until a dispute arises.
Tax, customs, and non-fiscal facilities
Articles 47–62 describe facilities for qualifying business actors, professionals, judges, non-resident investors, and designated institutions. The categories and conditions should be assessed individually.
| Area | What needs to be tested |
|---|---|
| Income tax | Potential long-term facilities for qualifying financial activities and non-resident investment; corporate reductions; foreign-income exemptions; and specified final-tax treatment for eligible professionals or judges. Income source, period, taxpayer status, and international tax commitments matter. |
| VAT, luxury goods tax & customs | Non-collection, exemptions, and import-duty facilities for qualifying transactions, goods, services, property, and development activities. |
| Family offices & residency | Specific conditions may apply to qualifying foreign individuals, Golden Visas, family-office arrangements, inheritances, and tax residency. |
| Non-fiscal facilities | Immigration, residency, employment, and licensing facilities, with detail to be established by the Council in coordination with relevant institutions. |
Bookkeeping, reporting, tax and customs administration, and continuing eligibility remain relevant. Loss of eligibility may lead to revocation, repayment of benefits, and sanctions. An incentive should be evaluated through its conditions and implementation, rather than its headline rate alone.
Implementation and the decisions ahead
The publication describes an implementation phase in which institutions, locations, detailed licences, financial regulation, incentives, and court procedures need to be established. Reported location proposals and investment projections are not treated here as confirmed operating arrangements.
Bring the proposed activity and the legal framework into one decision record.
- Define the activity, counterparties, markets, currencies, and proposed vehicle.
- Map the licence, domestic-market boundaries, and supervisory requirements.
- Assess contractual law, dispute clauses, enforcement, and continuing compliance.
- Test incentive eligibility alongside tax residency and cross-border obligations.
- Monitor implementing regulations and confirm operational readiness before execution.
The commercial opportunity, legal permissions, and tax treatment need to support the same arrangement. The appropriate structure will depend on the implementing rules and the facts of the proposed activity.
Sources & further reading
Arthadaya The Brief, Legal — 14 October 2026 (public PDF edition)Law 4/2026 — official text (BPK)Continue the conversation.
Wildan Hasbiawildan.hasbia@arthadaya.coJeff Nolan Lintangjeff.lintang@arthadaya.coWulan Eka Wardhanilegal@arthadaya.coWebsite adaptation of the dated Arthadaya publication. References to legislation reflect that edition; subsequent rules and developments should be checked. This perspective provides general information and does not constitute legal or tax advice. The facts and applicable requirements need to be assessed for each arrangement.
