Jakarta. Indonesia on Monday outlined an ambitious vision for a proposed International Financial Center, saying the planned financial hub would deepen domestic capital markets, attract investment, diversify funding sources, and strengthen the country's position in the global financial system.

Finance Minister Purbaya Yudhi Sadewa presented the government's objectives during a parliamentary hearing on a draft law establishing the Indonesia International Financial Center (IIFC), saying the project would serve not only as a financial services hub but also as a catalyst for long-term economic growth.

“The government shares Parliament's view that establishing the Indonesia International Financial Center is a strategic step to deepen financial markets, diversify financial instruments and funding sources, increase investment, and strengthen Indonesia's position as part of the global financial ecosystem,” Purbaya told lawmakers.

One of the center's primary objectives is to broaden Indonesia's capital markets by expanding investment instruments and financing options for the government, businesses, and the public.

Indonesia's development financing has long depended heavily on bank lending and the state budget. The government expects the new financial center to attract capital from both domestic and international investors, providing a broader range of funding sources for productive economic activities and supporting more sustainable long-term growth.

Purbaya said the initiative would also enhance Indonesia's competitiveness as an international financial center while reinforcing the country's economic sovereignty.

"The government expects capital raised through the center to support the real economy, including manufacturing, trade, infrastructure development, and other productive sectors, rather than merely increasing financial market activity," Purbaya said.

The proposed center is also expected to provide financing for national strategic projects, infrastructure development, climate finance, and sustainable finance, reducing reliance on conventional funding mechanisms.

In addition, the government plans to position the center as a hub for Islamic finance, green and blue finance, fintech, digital finance, and internationally recognized financial market infrastructure.

Officials also expect investment flowing through the center to generate employment, accelerate technology transfer, strengthen human capital, and expand economic opportunities.

To attract investors and global financial institutions, the draft law proposes a range of incentives, including tax and customs benefits, simplified licensing procedures, immigration and employment facilities, golden visas, and residency schemes.

The proposed institutional framework includes an advisory council, a governing council, a management authority, financial services supervisors, an arbitration body, and a dedicated court to ensure professional governance and provide legal certainty for businesses operating within the financial center.

The Finance Ministry has previously said it aims for the Indonesia International Financial Center to attract as much as Rp 500 trillion ($27.85 billion) in investment through tax incentives and other business-friendly policies.

However, achieving that target will depend on Indonesia's ability to compete with established regional financial centers such as Singapore and Dubai, according to Herman Saheruddin, Director General of Financial Sector Stability and Development at the Finance Ministry.