Indonesia Passes Financial Centers Law, Offering 50-Year Tax Holidays to Chase 8% Growth
Updated
Updated · Nikkei Asia · Jul 21
Indonesia Passes Financial Centers Law, Offering 50-Year Tax Holidays to Chase 8% Growth
3 articles · Updated · Nikkei Asia · Jul 21
Summary
Indonesia's parliament unanimously approved a law creating international financial centers, a key step in Jakarta's push to lift economic growth to 8% by 2029.
The law is designed to draw foreign capital with incentives modeled on hubs such as Dubai, including 50-year tax holidays, exemptions on overseas income and selective VAT breaks.
Officials have not named the first site, but the initial center is projected to attract up to 500 trillion rupiah ($27.89 billion) in investment; Bali has previously been floated.
Jakarta will now set up a supervisory board, a dedicated government body, an arbitration body and a special court, all aimed at governing disputes and operations in the new centers.
As Bali builds its financial hub, what will stop it from becoming a paradise for money launderers instead of investors?
Can Indonesia's '50-year tax holiday' still lure investors now that a global minimum tax has been implemented?
Indonesia’s $3.2 Trillion Financial Center Ambition: Law, Strategy, and the Race for Global Wealth in Bali
Overview
Indonesia has passed a new law to establish international financial centers, aiming to attract global wealth—especially from family offices—by offering incentives like a potential zero-percent tax rate. While the initial plan was to base the center in the new capital Nusantara, this was abandoned due to insufficient economic activity, and Bali is now the primary location under consideration. The government’s strategy focuses not only on fiscal inducements but also on building a predictable and robust regulatory environment, recognizing that long-term success depends on strong institutions and investor trust rather than just tax breaks.