Indonesia just threw down the gauntlet at Singapore’s feet. The country is building an International Financial Centre designed to pull in between $16.7 billion and $27.8 billion in foreign investment, complete with the kind of tax sweeteners that make CFOs salivate.
Finance Ministry official Herman Saheruddin announced the initiative on July 8, putting a price tag of 300 trillion to 500 trillion Indonesian rupiah on the expected capital inflows. The target list reads like a who’s who of global finance: international banks, asset managers, fintech firms, and family offices.
Bali as the new Dubai
The proposed pilot location is the Kura Kura Special Economic Zone on Serangan Island in Bali, and the model they’re copying is the Dubai International Financial Centre.
The incentive package under consideration includes potential full corporate income tax exemptions and VAT relief for participants in the Indonesia International Financial Centre, or IIFC. The IIFC would also operate with administrative and regulatory independence, adopting global finance standards rather than relying solely on Indonesia’s existing regulatory framework.
