Indonesia has made inroads towards establishing an international financial centre after the necessary legislation was passed last month.
It is hoped the IFC will boost foreign investment in banking and wealth management and boost economic growth, with a projected 500 trillion rupiah ($27.89bn) in investment anticipated.
Authorities and lawmakers have suggested the new law will include a range of tax benefits to qualifying investors, mirroring the incentives provided by established financial hubs such as Dubai, Reuters reports, including a 50-year corporate income tax holiday for investors that meet certain criteria.
Mohamad Hekal, deputy head of parliament's financial commission, said: "It is estimated there is around $3.2trn of wealth of the world's richest families held in various family offices across global financial hubs. It is estimated about 65% is currently looking for a new home. That is what we're aiming to capture.”
While the location of the IFC has not yet been decided, Bali has been touted as a potential site.
Indonesian law firm SSEK said: “The ultimate success of the PFII will depend on the forthcoming implementing regulations and, more importantly, how the new framework functions in practice.
“Nevertheless, the establishment of the PFII represents one of Indonesia's most significant financial-sector reforms in recent years and has the potential to reshape how international investors structure their investment and financial activities in Indonesia.”
