Government Explores Adoption of Common Law for Indonesia’s Financial Center

The government is currently accelerating the drafting of the Draft Bill on the Indonesia International Financial Center (“PFII”) as mandated by Law No. 4 of 2026 (“Law 4/2026”) on the Amendment to Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“P2SK Law”). One of the most significant breakthroughs is the plan to implement a “common law” legal system within the PFII zone to attract global investors.

“We are collaborating with the Supreme Court (“MA”) to examine best practices in adopting common law without conflicting with the national legal system. So we’re still figuring out the best way forward,” said Herman Saheruddin, Acting Director-General of Financial Sector Stability and Development (“DJSPSK”) at the Ministry of Finance.

Furthermore, the PFII will be designed as a region with financial and administrative autonomy, as well as specific legal provisions aligned with international standards. This Draft Bill will include expedited civil dispute resolution methods to provide certainty for financial services institutions, such as family offices, banks, insurance companies, and venture capital firms, operating within the zone.