“The Bill to create the Indonesia International Financial Center, discussed on July 6 at a public hearing between lawmakers and legal and economic experts, would offer a 100 per cent corporate income tax reduction for businesses operating in the zone, along with a full income tax break for foreign financial-sector experts.”
“Foreigners holding so-called Golden Visas in the zone may not be treated as domestic tax residents, while overseas investors earning dividends or other investment returns from the hub could be exempt from Indonesian withholding or collection tax.”
“The hub’s financing would draw on both public and private sources, including cash, state-owned assets, assets held by state-owned enterprises, business entities, the investment management arm of sovereign wealth fund Danantara, or other lawful channels.”
“The push would put Indonesia in competition for mobile capital, wealth managers and financial firms with established hubs such as Singapore and Hong Kong, as well as Dubai. Those centres appeal to investors not just through tax perks, but also through transport and connectivity infrastructure, as well as regulatory predictability, specialised legal systems and investor trust – areas Indonesia will need to improve amid deteriorating investor confidence in recent months.”