Indonesia unveils zero-tax incentives for proposed international financial center

(ECNS) -- Indonesia's parliament held a public hearing on Monday, convening legal and economic experts to review a landmark draft bill that would establish a new international financial center.

The legislation unveils aggressive tax incentives designed to siphon in global mobile capital and foreign talent.

Under the draft law, qualified enterprises within the special financial zone will enjoy a 100% corporate tax holiday, while expatriate professionals will see their personal income tax zeroed out.

The bill also exempts foreign investors from dividend taxes, permits unrestricted profit repatriation, and waives value-added tax, luxury sales tax, and import duties. Furthermore, foreign golden visa holders within the hub will not be deemed Indonesian tax residents.

To ringfence the domestic economy and ensure financial stability, the bill implements a strict firewall: zone-based institutions are barred from tapping domestic public funds or serving local Indonesian consumers.

Instead, the hub will focus on offshore banking, insurance, capital markets, precious metals, family offices, and wealth management consulting.

Backed by public-private capital and Indonesia’s sovereign wealth fund, Danantara, the center will boast high financial and administrative autonomy, complete with its own dedicated courts and commercial arbitration bodies. A presidentially appointed committee will oversee operations and licensing.

As Jakarta chases an ambitious 8% economic growth rate, the government hopes this hub—with Bali as the frontrunner candidate—will unlock critical off-budget financing.