Jakarta. Indonesia is drafting a regulation dedicated to the upcoming international financial center in Bali, according to a senior official, as the government stays optimistic that it will be on par with Dubai.

In recent months, Southeast Asia’s biggest economy has been fast-tracking its plan to set up a global financial center. The rationale behind this ambition is to capture global capital as investors flee the conflict-struck Middle East to safe havens. The government has also picked Bali—a global tourist destination—as the location.

Chief Economic Affairs Minister Airlangga Hartarto confirmed that a new regulation was in the works as talks began with the Constitutional Court.

“We have discussed the legal structure of the financial center. We are still drafting the law,” Airlangga spoke to reporters in Jakarta on Monday evening.

He raised the possibility of Indonesia expanding the financial centers to other locations, but “chose to focus on Bali for now”. 

The government is now trying to identify the best incentives to offer its investors. The minister added: “We will give special incentives, just like what we do with the other special economic zones [SEZs]. We are still finalizing the incentives, but we will make it in a way that our financial center is on Dubai’s caliber”.

Past government statements had indicated that the special treatment would include tax exemptions.

Airlangga had previously signaled that Indonesia would adopt a “common law”—à la Singapore—for the financial SEZ. 

Reports show that common law tends to provide better certainty as it puts strong emphasis on letting judges follow previously decided cases. This way, investors can easily predict their legal outcomes. The civil law applied in Indonesia, on the other hand, has the judges making their decisions strictly based on written laws.

“We are consulting with the Constitutional Court on whether we should adopt common law in our [financial] SEZ,” Airlangga said in his office earlier this month. 

He stated that the government would “take advantage of the newly approved financial law” that had revised tons of existing regulations.

A copy of the document showed that Indonesia had opened up the possibilities of having more than one financial center. It will also roll out another law expanding on the technical details by September. The law also states that a “council” will oversee the center.

The United Arab Emirates has turned into a global investment hub, mainly thanks to its Dubai International Financial Center (DIFC). It has also facilitated trade and investment flows across the Middle East, Africa, and South Asia. 

Bhima Yudhistira of the economic think-tank Celios had urged the government to copy DIFC’s moves on having an independent regulator for transactions in and from the zone if it wants to gain investors’ trust.

“If we take a look at the DIFC, the key lies in the independent and professional authority. Indonesia must have an authoritative body dedicated to making a financial center that has a good track record and of integrity,” Bhima told the Jakarta Globe, not long ago.