PFII Draft Bill Proposes Legal Decoupling for Business to Attract Global Investors

The government and Commission XI of the Indonesian House of Representatives have agreed to advance the Draft Bill on the Indonesian International Financial Center (“PFII Draft Bill”) to the Second Reading in the Plenary Session. Interestingly, the PFII Draft Bill contains provisions for decoupling, or separating, the national civil and business legal systems specifically for the PFII area.

“In principle, this will be a financial free zone. So, the most important thing is legal certainty,” said Herman Saheruddin, Acting Director-General of Financial Sector Stability and Development (“DJSPSK”) at the Ministry of Finance, to Hukumonline. 

Based on the draft obtained by Hukumonline, the provisions of Article 48(1) of this bill grant the PFII the legal mandate to adopt, incorporate, and adapt the principles of common law and equity, as well as to implement the practices of international financial centers. Thus, PFII and all its activities are exempt from the provisions of Indonesian civil and business law, provided they comply with certain regulations and requirements to be established by the PFII Board.

“We’re offering a competitive package of incentives while still complying with international standards,” he added.