What is Indonesia International Financial Centre?
On July 21, the Indonesian International Financial Centre Act was officially signed into law and has become the primary legal framework.
Indonesia International Financial Centre (IIFC) was first regulated through Law No. 4 of 2026 regarding Amendment Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector. According to the regulation, IIFC is an area that has financial and administrative autonomy as well as specific legal provisions that adopt, incorporate, implement and/or align with international principles and/or standards.
Why Does it Matter to Indonesia?
IIFC is important for Indonesia to strengthen national economic resilience, attract long-term global capital and investment, and enhance Indonesia’s financial competitiveness on the international level. Furthermore, Minister of Finance, Mr. Purbaya Yudhi Sadewa said, the IIFC is compiled to strengthen a national economy that is inclusive, sustainable, and globally competitive. In essence, IIFC designed to boost Indonesia’s economy.
What Does the Indonesian International Financial Centre Act Regulate?
In this regard, we must refer to the previous rules. According to article 248A (4), IIFC covers the following business sectors:
• Business activities in the financial sector;
• Business activities supporting the financial sector; and
• Business activities in other sectors.
However, that regulation was not explain the exact business activities that IIFC covers. According to Kontan.co.id, the IIFC Act expand the following business sectors:
Business activities in the financial sector have expanded as follows:
- Banking
- Insurance
- Islamic finance
- Capital market, derivatives, and carbon markets
- Pension funds
- Financing
- Venture capital
- Technological innovation in the financial sector
- Guarantees
- International commodity trading
- Bullion
- Trust and fund management
- Financial instrument management
- Financial holding company
- Money markets, foreign exchange markets, and related derivative transactions
- Family offices
- Investment management
- Other financial sector business activities
Business activities supporting the financial sector have expanded as follows:
- Public accountants
- Appraisers
- Notary
- Legal consultant
- Financial consultant
- Investment managers
- Tax consultant
- Actuaries
- Sharia financial services expert
- Other business activities
Lastly, the Business activities in other sectors sector have expanded as follows:
- Transportation
- Accommodation
- Health
- Waste management
- Tourism
- Food and beverages
- Other business activities as determined by the IIFC Council.
IIFC Introducing New Legal Systems to Indonesia
Not only expanding business activities, the IIFC also introduce a new legal system. According to Hukumonline, the IIFC Act also provides for alternative dispute resolution and special court under IIFC. This special court within the IIFC has the authority to examine, hear, and adjudicate cases. Basically, the establishment of a special court is intended to uphold legal certainty and provide a mechanism for dispute resolution that is swift, professional, and trustworthy.
Stay Updated on the IIFC Developments!
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