Jakarta. Indonesia is plotting an ambitious addition to Bali’s beaches and boutique resorts: an international financial center meant to lure the world’s wealthy away from Singapore, Dubai, and Hong Kong.

This time, Indonesian officials believe the timing may finally favor them. Turmoil in the Middle East, rising geopolitical fragmentation, and intensifying competition among financial hubs are encouraging investors and family offices to diversify where they park their wealth. Indonesia, Southeast Asia’s largest economy, sees an opportunity.

President Prabowo Subianto has openly floated the idea of establishing a “special financial center,” while senior ministers are now fleshing out the legal and institutional framework needed to support it. Bali, specifically the Kura Kura Bali Special Economic Zone, has emerged as the leading candidate.

Finance Minister Purbaya Yudhi Sadewa said on Thursday the zone will span around 100 hectares and operate under special regulations, including a common law-based legal framework, easier cross-border capital flows, and potential tax incentives for foreign investors.

“We will have a new source of financing that could be cheaper than what we currently have, making our financing more sustainable. And if more funds flow in from overseas, the rupiah will also become more stable,” he said.

Investment Minister and CEO of sovereign wealth fund Danantara, Rosan Roeslani, on Tuesday confirmed that the proposed Indonesia Financial Center (IFC) would have its own dedicated authority body.

“We plan to review several potential locations in Bali. We will also compare it with financial centers in Dubai, Abu Dhabi, Singapore, and others,” he said.

Bali offers little of Jakarta’s corporate heft but plenty of lifestyle appeal. Indonesia is effectively betting that wealthy investors increasingly care about both spreadsheets and sunsets. Officials hope the island can attract family offices — private firms managing the fortunes of ultrawealthy families — as well as hedge funds, global asset managers, and digital nomads.

Singapore’s success rests not simply on low taxes but on reliable courts, efficient bureaucracy, and regulatory credibility built over decades. The Dubai International Financial Centre achieved similar success by creating a semi-autonomous jurisdiction based largely on common law, reassuring investors wary of unfamiliar legal systems.

Trust is a Must
Indonesia, by contrast, still struggles with legal unpredictability, regulatory overlap, and bureaucratic friction. Investors frequently complain about inconsistent policymaking and weak contract enforcement.

Nafan Aji Gusta Utama, senior market analyst at Mirae Asset Sekuritas Indonesia, argues that attracting capital requires more than generous incentives. Global investors, especially family offices and financial institutions, will prioritize regulatory credibility and legal certainty above all else.

“The key factor is trust. Legal certainty must be strong if Indonesia wants to attract global capital into a new financial center,” he said.

Nafan suggested Indonesia could adopt elements of a common-law framework for international financial transactions within the zone, mirroring Dubai’s model. He also argued that the authority overseeing the financial center must be independent, professional, and insulated from political interference.

“The authority must be credible. Financial activities move quickly, so decision-making also needs to be fast,” he said.

Modern finance also depends on digital speed. Nafan said Bali would require world-class information technology infrastructure and low-latency networks capable of supporting high-frequency transactions and cross-border financial flows. The ecosystem would also need skilled lawyers, consultants, accountants, and financial professionals, potentially requiring Indonesia to initially rely on foreign expertise while building domestic talent.

Then comes the question of incentives. Investors are likely to demand what Nafan called “red carpet” treatment: tax holidays, exemptions from value-added taxes, simplified regulations, and flexible foreign exchange rules. They will also want easier repatriation of profits and long-term visas tailored to wealthy investors and digital professionals.

Local Concerns on Bali’s Identity
Still, skepticism persists. Members of parliament have already warned that the proposal appears premature. Evita Nursanty, deputy chairwoman of House Commission VII, recently complained that lawmakers had yet to see a coherent master plan. Bali, she argued, should focus on fixing tourism infrastructure and preserving its cultural identity rather than attempting to imitate Dubai.

“Our main task right now is not to turn Bali into a financial center. We still face many problems in tourism infrastructure development, spatial planning, and other areas that need improvement, so the question is whether this plan addresses those issues,” Evita said.

Bali Regional Secretary Dewa Made Indra admitted that local officials are still trying to understand the government’s latest proposal, adding that earlier discussions had focused more on establishing family offices in Bali rather than a full-fledged international financial center.

Luhut Binsar Pandjaitan, chairman of the National Economic Council, proposed in 2024 setting up family offices in Bali. The former chief investment minister has previously held talks with Ray Dalio as well as members of the Porsche family to establish family offices in Indonesia.