IIFC Draft Law to Be Ratified, Comprising 10 Chapters and 73 Articles

JAKARTA, DDTCNews - The working committee (panitia kerja/panja in Indonesian) tasked with drafting the Draft Law on the Indonesian International Financial Centre (IIFC) has completed a draft regulation comprising 10 chapters and 73 articles.

The substance and contents of the IIFC Draft Law have been agreed upon by the working committee and the government for adoption at Level I discussions and are to be formally enacted at Level II discussions during the plenary session.

"Based on the results of the working committee's efforts, together with those of the drafting and synchronisation teams, a Draft Law on the IIFC has been prepared, systematically arranged into 10 chapters and 73 articles," said Mohamad Hekal, Chairperson of the IIFC Draft Law Working Committee and Deputy Chairperson of House Commission XI, at a working meeting with government representatives on Monday (20/7/2026).

Hekal stated that during the IIFC Draft Law meetings, the working committee scrutinised, deliberated and conducted an in-depth examination of the entire issue inventory list (daftar inventarisasi masalah/DIM in Indonesian) together with the drafting and synchronisation teams. In line with this, the 10 chapters and 73 articles are set out as follows:

Chapter I governs general provisions, encompassing the definitions and principles of IIFC administration.

Chapter II governs the establishment, legal standing and objectives of the IIFC. This chapter comprises 2 regulatory sections: provisions on the establishment and legal standing of the IIFC and provisions on the objectives of IIFC administration.

Chapter III governs business activities within the IIFC, covering financial sector business activities, supporting financial sector business activities and other sector business activities.

Chapter IV governs the institutional framework of the IIFC, encompassing 6 regulatory sections. First, the delegation of IIFC management authority from the President to the IIFC Governor in the establishment of the IIFC Advisory Council.

Second, provisions on the IIFC Council, covering the status and standing of the IIFC Council, the organs of the IIFC Council, the appointment and dismissal of the IIFC Council, the duties and authority of the IIFC Council, including the establishment of committees to support the exercise of its duties and authority.

Third, provisions on the status and organs of the IIFC Management Institution (Lembaga Pengelola/LP in Indonesian), the duties and authority of the IIFC LP, the seed capital and business plan of the IIFC LP as well as the profits, losses, asset management and insolvency of the IIFC LP.

Fourth, provisions on the status and organs of the IIFC Financial Services Supervisory Institution (Lembaga Pengawas Jasa Keuangan/LPJK in Indonesian), the duties and authority of the IIFC LPJK and the seed capital of the IIFC LPJK.

Fifth, provisions on accountability for the submission of reports on IIFC administration responsibility to the President and reports on the exercise of IIFC duties and functions to the House, specifically, the council complementary organs (alat kelengkapan dewan/AKD in Indonesian) whose duties and authority fall within the field of finance.

Sixth, further provisions on the institutional framework of the IIFC Council, IIFC LP and IIFC LPJK in a presidential regulation.

Chapter V contains provisions on the IIFC arbitration institution, governing alternative dispute resolution (ADR) within the IIFC through the IIFC arbitration institution.

Chapter VI contains provisions on the IIFC court, comprising 6 regulatory sections. First, provisions on the status and standing of the IIFC court as a special court. Second, provisions on the jurisdiction of the IIFC court to examine, adjudicate and decide cases within the IIFC.

Third, the structure of the IIFC court. Fourth, the authority of the court chief justice. Fifth, the rules of procedure of the IIFC court. Sixth, provisions on the budget of the IIFC court, sourced from the IIFC LP.

Chapter VII governs the forms of support provided by the central government and local governments for the administration of the IIFC.

Chapter VIII covers tax facilities and other special facilities, comprising 9 regulatory sections. First, general provisions on the granting of tax facilities to certain parties and the forms of other facilities provided within the IIFC.

Second, income tax facilities, including the scheme or form of such facilities as well as the subjects to whom facilities are granted and the relevant criteria. Third, value added tax (VAT) and/or sales tax on luxury goods (STLGs) facilities, including the form of the facilities, the subjects to whom facilities are granted and the relevant criteria.

Fourth, the granting of customs facilities, including the form of the facilities, the subjects covered and the terms and conditions governing the utilisation of incentives. Fifth, the tax treatment of inheritances, concerning provisions on inheritance tax not applied within the IIFC.

Sixth, the tax treatment of IIFC seed capital funding. Seventh, provisions on the reporting rights and obligations, and administrative obligations of entrepreneurs or professionals in the financial sector and other parties conducting business or operational activities within the IIFC.

Eighth, provisions on penalties relating to tax facilities. Ninth, provisions on other special facilities for entrepreneurs, professionals or other parties within the IIFC territory.

Chapter IX governs the special characteristics of the IIFC, encompassing the use of language, law, permits for the use of foreign currency and financial transactions within the IIFC.

Chapter X governs the closing provisions, containing exclusions from the application of statutory laws and regulations, the mandate for the establishment of implementing regulations under the IIFC Law, the entry into force of the IIFC Law and its placement in the State Gazette of the Republic of Indonesia.

"We hope that with the promulgation of the IIFC Draft Law, it will be possible to promote sustainable economic growth, equitable construction, the expansion of employment opportunities as well as the deepening and diversification of the national economy, whilst at the same time, serving as an effective contribution to the financial sector in realising the welfare of all Indonesian people," Hekal concluded. (dik)