Indonesia wants to turn a small island in Bali into a global financial hub, and it’s bringing the one incentive that tends to get capital moving faster than anything else: a zero percent tax rate.
The country’s proposed International Financial Center, anchored in the Kura Kura Special Economic Zone on Serangan Island, would exempt foreign-sourced capital from income tax entirely. Finance Minister Purbaya Yudhi Sadewa put it plainly: money entering the zone from overseas won’t be taxed.
The Bali play
This isn’t just a tax holiday dressed up in a press release. Indonesia is building an entire regulatory architecture around the IFC, rooted in amendments to Law No. 4 of 2023, known as the P2SK/PPSK Law, which explicitly allows for the creation of special international financial zones.
The government is targeting legislative approval of the PFII Bill by August 2026. That bill would formalize the tax exemptions, operational guidelines, and the broader legal framework governing the zone.
