Academia
The rushed push to turn Bali into an international financial hub risks turning the island into a speculative tax haven unless policymakers fix critical legal loopholes and money-laundering blind spots.
Tourists visit Ulun Danu Beratan in Tabanan, Bali, on May 15, 2026. (Antara/Nyoman Hendra Wibowo)
The ambition to revolutionize Indonesia's financial sector and position the country as an epicenter of capital accumulation in the Asia-Pacific, first proposed in May 2024, has rapidly transformed into a top-tier legislative priority.The government and the House of Representatives agreed to accelerate deliberations on the Indonesia International Financial Center (PFII) bill within a razor-thin 20-day timeframe, culminating in endorsement on July 21. The legislative rush stems from the government’s belief that global volatility, fueled by geopolitical conflicts, offers a rare window to capture a surge of international liquidity searching for a safe haven.
Legally, the PFII is designed as a special territory endowed with financial autonomy, administrative independence and a legal framework tailored to international standards. Its governance is structured hierarchically: a PFII council, accountable directly to the president, sits at the top, supported by a management agency, a financial services supervisory agency and a specialized commercial court.
