Draft Bill on PFII Grants the Council Authority to Establish Regulations for International Financial Zones

Draft Bill on the Indonesian International Financial Center (“PFII”) not only proposes the establishment of an international financial center, but also introduces an institutional framework that enables the creation of a separate regulatory regime through regulations issued by the PFII Council and the PFII Services Institution. This framework serves as a key attraction for an international financial center by providing legal certainty, regulatory independence, and dispute resolution mechanisms trusted by international business actors.

“Further provisions regarding business activities, including special tax treatment and other special facilities within the PFII, will be regulated under the PFII Council Regulations,” stated Professor Paripurna P. Sugarda, Professor of Commercial Law at Universitas Gadjah Mada (“UGM”), as well as a member of the expert team and drafting team for the PFII Bill.

According to him, the PFII Council is not only responsible for managing the zone but is also granted the authority to issue Council Regulations governing various operational aspects of the zone. Nevertheless, he emphasized that such Council Regulations would not be formulated unilaterally, ensuring that the independence of the zone remains within the framework of the national legal system.

“In issuing Council Regulations, the PFII Council shall coordinate with the Government,” he added.