HARIANEXPRESS – Indonesia is actively moving forward with plans to transform its renowned resort island of Bali into an International Financial Centre. This initiative aims to establish Bali as a significant competitor to established global financial hubs such as Singapore and Hong Kong. Senior adviser Luhut Pandjaitan, who chairs Indonesia’s National Economic Council, is advocating for Bali as a secure destination for global investors.
Pandjaitan highlighted a growing interest among investors seeking new options amidst escalating geopolitical tensions, particularly those stemming from the conflict in the Middle East. He noted that many investors express a desire to relocate their assets and reside in Bali due to its tranquil environment.
Strategic Vision and Economic Goals
The proposed financial hub is a key component of President Prabowo Subianto’s broader economic strategy. This plan seeks to attract increased investment and elevate Indonesia’s economic growth from its current approximate 5 percent to 8 percent by 2029.
Luhut Pandjaitan, aged 78, stressed that Indonesia must significantly enhance its transparency and effectively address corruption to foster investor confidence. He emphasized that gaining trust and credibility is essential for the success of this ambitious project.
“They said ‘We’d like to move our assets, we’d love very much to stay away from here and live in Bali, because it’s so peaceful in Bali’,” Pandjaitan was quoted as saying.
“Without this, it’s very hard to gain trust and credibility,” he added.
Legal Framework and Operational Model
Indonesia’s parliament recently approved legislation that paves the way for the creation of this financial centre. The government is expected to release further details, including the exact location and specific incentives, in the near future.
Pandjaitan indicated that the hub could operate under International Commercial Law rather than Indonesia’s civil code, drawing a parallel to the legal framework employed in Hong Kong. He described this operational model as being “like one country, two systems.”
The blueprint for Bali’s International Financial Center (IFC) is inspired by highly autonomous global hubs such as the Dubai International Financial Centre (DIFC). This model envisions an independent operation with its own civil and commercial frameworks based on English common law, an autonomous judicial system, and a dedicated regulatory body.
The legal foundation for this shift is rooted in the 2026 amendments to Law No. 4 of 2023 on Financial Sector Development and Reinforcement, also known as the P2SK Law. This legislative update grants the government the authority to establish international financial zones across Indonesia, with Bali designated as the initial pilot location.
Addressing Investor Concerns and Future Growth
Indonesia has been grappling with investor apprehensions concerning transparency and market governance. Global index provider MSCI has even issued a warning about a potential downgrade of the country’s status from an emerging to a frontier market.
Luhut Pandjaitan affirmed the government’s unwavering commitment to implementing reforms aimed at bolstering investor trust and strengthening Indonesia’s economic standing. He emphasized the government’s dedication to greater transparency, efficiency, and reduced corruption.
“We’re going to be very transparent. We’re going to be more efficient, there’s going to be less corruption,” Pandjaitan told a Hong Kong-based news outlet.
Pandjaitan also dismissed skepticism from economists regarding the ambitious 8 percent growth target. He cited Indonesia’s robust digital infrastructure, advancements in artificial intelligence development, and a **young, dynamic workforce** as key factors that will propel this growth.
Key Locations and Participants
The financial center is planned to be anchored within the Kura Kura Bali Special Economic Zone (SEZ) in Denpasar. This zone spans 498 hectares on Serangan Island and was initially conceived for tourism and creative industries under Government Regulation No. 23 of 2023.
The focus on Bali was recently confirmed by Coordinating Minister for Economic Affairs Airlangga Hartarto. Bali already hosts two established Special Economic Zones: the medical and wellness-focused Sanur SEZ, and the Kura Kura Bali SEZ.
The concept of the financial centre was a central topic at the inaugural Nusa Dua Forum in Bali on July 17. The event was organized by the South China Morning Post in partnership with Danantara Indonesia.
Minister of Investment and Downstream Industry Rosan Roeslani, who also heads the state-owned sovereign wealth fund Danantara Indonesia, stated that the financial centre is part of Jakarta’s efforts to establish itself as a dependable long-term investment destination. Rosan outlined that the financial centre would feature an independent court system, an independent financial authority system, and independent corporations.
