The Ministry of Finance sees an opportunity for the Indonesia International Financial Center (Pusat Finansial Internasional Indonesia/PFII) to adopt a financial hub plus concept, setting it apart from established international financial centers in other countries.
Director General of Financial Sector Stability and Development at the Ministry of Finance Herman Saheruddin said one of Indonesia’s key advantages is its abundant natural resources. He noted that this represents an added value not shared by neighboring countries, including Singapore.
Herman explained that Singapore has long been known primarily as a financial center, while Indonesia has a more diversified economic base. PFII is therefore not only intended to develop an ecosystem of financial instruments but also to connect it with Indonesia’s natural resource potential, particularly through the downstreaming agenda.
“While Singapore is purely a financial center, Indonesia has a broader concept, namely a financial hub plus. The financial ecosystem being developed can create new instruments while being supported by Indonesia’s natural resource strength through downstreaming,” Herman said at an event organized by the Financial Services Authority (Otoritas Jasa Keuangan/OJK) in Jakarta on Thursday (Aug. 27, 2026).
Another advantage that PFII can develop lies in Islamic finance. With its large Muslim population, Indonesia is considered to have a strong foundation for developing an international-scale Islamic finance industry.
Herman said the ecosystem could be developed to produce a range of Islamic financial instruments with cross-border reach. As a result, PFII would not only serve as a financial transaction center but also become one of the drivers of global Islamic finance development.
Beyond its natural resource strength and Islamic finance potential, the government sees several other factors that could enhance PFII’s attractiveness. Indonesia’s strategic location is one consideration, particularly in attracting high-net-worth individuals (HNWIs). The government is also preparing various tax incentive schemes to support the development of the financial center.
On the regulatory front, Herman said PFII would have an independent regulatory framework aligned with international standards. The framework is expected to provide certainty and facilitate foreign investors seeking to invest and expand their capital in Indonesia.
According to Herman, foreign investment entering through conventional channels must comply with various domestic requirements and procedures. Through PFII, however, investors would operate under a regulatory framework designed with reference to international practices, allowing investment processes to become more competitive.
He added that capital raised through PFII is ultimately expected to benefit the national economy. The funds could be channeled to finance various productive projects and activities in the country.
Herman emphasized that PFII’s development would be guided by at least two key principles. First, the financial center’s operations would adopt internationally recognized practices. Second, all activities would remain subject to oversight by the relevant authorities.
The plan to develop PFII was previously announced by President Prabowo Subianto. The government has designated Jakarta and Bali as locations for the development of the international financial center.
The President described PFII as part of an effort to create a new face for Indonesia’s financial sector with a global orientation. The financial center will not only cover investment activities but also encompass financial technology development, arbitration, and commercial dispute resolution mechanisms based on international standards.
The scope of activities that can be developed within PFII is also broad. The government is opening opportunities for a range of financial services, including banking, insurance, capital markets, derivatives, carbon exchanges, and bullion activities. Fintech, Islamic finance, family offices, treasury centers, and investment management will also be among the sectors that can be developed.
To strengthen PFII’s competitiveness among global investors, the government is preparing a number of supporting facilities. These include certainty over the transfer and repatriation of capital and profits, tax facilities for eligible activities, the issuance of golden visas, and competitive licensing services.
Despite offering various investment conveniences, PFII’s development will continue to be accompanied by strict compliance standards. By combining investment facilitation, international-standard regulations, natural resource strength, and Islamic finance potential, the government hopes PFII can become a financial center capable of attracting more international capital while supporting development financing in Indonesia.
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