Jakarta. Indonesia is planning to roll out tax exemptions for foreign investors who put their money in the Bali financial hub.

Indonesia is forging ahead with its ambitions to set up an international financial center at a special economic zone (SEZ) in the tourist haven of Bali. President Prabowo Subianto wants to capture the opportunity rising from the Iran war-induced uncertainties as investors look beyond the Middle East. The government is now finalizing the fiscal incentives aimed at luring global capital into the zone known as the Indonesia Financial Center (IFC). 

Finance Minister Purbaya Yudhi Sadewa revealed that the financial SEZ would not collect taxes from investors. However, the government expects whatever money the investors put in will go into national strategic projects, particularly those involving the sovereign wealth fund Danantara.

“Foreign money that flows [into the SEZ] won’t be subject to tax. We can use it to invest in Danantara’s projects with good returns or perhaps projects outside the SEZ that have great prospects,” Purbaya told a press conference in Jakarta on Thursday.

The tax exemptions only apply within the SEZ. In other words, investors conducting any economic activity outside the area will remain subject to regular tax regulations, according to Purbaya, as the government wants to keep the economy running.

Indonesia will also encourage investors within the SEZ to purchase government bonds. 

“This way, we can strengthen the financing sources for both the private sector and the government,” Purbaya said.

The government has repeatedly admitted that it had taken inspiration from Dubai, which has long run a financial center. Purbaya also revealed that the area would adopt common law, which could provide better legal certainty for investments. Purbaya said that the upcoming SEZ would span around 100 hectares.

Indonesia recorded Rp 250 trillion (nearly $14.4 billion) in the first quarter of 2026.

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