Could Bali Become the Next International Financial Centre?
What We Know About the Project and Whether Companies Will Really Benefit from a 0% Corporate Tax Rate
Indonesia continues to advance its ambitious International Financial Centre (IFC) project, which many have already dubbed the country’s future “Dubai.” Development of the concept began in 2023, and on 21 July 2026, the Indonesian Parliament passed legislation establishing the legal framework for the launch of the financial centre.
The project envisions the creation of a special financial district spanning more than 100 hectares, based on a model similar to the Dubai International Financial Centre (DIFC). One of its defining features will be the application of English common law to certain legal matters within the financial centre. This means that two distinct legal systems could effectively operate within a single country.
This approach was one of the key factors behind DIFC’s success in Dubai, enabling it to attract major international banks, investment funds, and financial institutions.
Who Will Be Eligible to Operate Within the IFC?
At this stage, International Financial Centre resident status is expected to be available primarily to:
Family offices;
Commercial banks;
Investment funds;
Other large international financial institutions that meet the applicable regulatory requirements.
It is important to understand that this is not intended to be a preferential regime for all foreign businesses or ordinary PT PMA companies operating in Indonesia.
Will the Corporate Income Tax Really Be 0%?
Public announcements have indeed referred to the possibility of a 0% Corporate Income Tax (CIT) for up to 50 years for companies that obtain IFC resident status.
However, this should not be interpreted as a complete exemption from all taxes.
Based on the information currently available, the proposed incentive would apply only to corporate income generated from activities conducted within the International Financial Centre. Companies would still remain subject to other tax obligations, including:
Value Added Tax (VAT);
Customs duties;
Taxation of income earned outside Indonesia;
Other taxes and levies that will be determined by future implementing regulations.
Therefore, claims that the IFC will become a completely tax-free jurisdiction are, at this stage, inaccurate.
The Legal Framework Is Still Under Development
Although the primary legislation has now been enacted, many of the practical aspects have yet to be finalized.
As of today:
Implementing regulations are still being drafted;
The final list of available tax incentives has not yet been approved;
Eligibility requirements for obtaining IFC resident status have not yet been published;
The final location of the financial centre has not yet been officially confirmed.
For this reason, it is still too early to speak about a fully operational company registration framework or guaranteed access to a 0% Corporate Income Tax regime.
What Is the Purpose of the Project?
According to Coordinating Minister for Economic Affairs Airlangga Hartarto, the new International Financial Centre is expected to become one of Indonesia’s largest investment initiatives and could potentially increase the country’s investment inflows to nearly double their current level.
The objective extends far beyond creating another special economic zone. The government’s vision is to establish a globally competitive financial hub capable of competing with Dubai, Singapore, and Hong Kong for international capital and financial services.
Conclusion
The project appears highly promising and has the potential to reshape Indonesia’s position within the global financial landscape. However, it remains in the regulatory development stage.
Until the implementing regulations are issued, it is premature to draw definitive conclusions regarding the available tax incentives, eligibility criteria, operating conditions for companies, or the practical advantages of obtaining IFC resident status.
Mayon Solutions is closely monitoring the development of this project. We analyze all legislative changes and are the first to inform our clients about new opportunities for international business.