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What is PFII? A Brief Guide to Understanding Law Number 6 of 2026.

November 13, 2026

Indonesia officially competes for global capital. Through Law Number 6 of 2026 concerning the Indonesian International Financial Center (PFII Law), the government has prepared a region with its own legal rules, supervisory institutions, and courts, complete with tax incentives whose term can reach 50 years. Such a large incentive certainly attracts attention, but it does not automatically apply to all parties. This article summarizes the contents of the PFII Law point by point so that it is easy to understand, both by business actors and the general public.

Overview of the PFII Law

The House of Representatives approved the PFII Bill in the Plenary Meeting on July 21, 2026, then this Law was passed and promulgated on August 19, 2026. This Law has been in effect since the date it was promulgated (Article 73), the PFII Law is currently in effect. This Law implements the mandate of Article 248A paragraph (7) of Law Number 4 of 2026 concerning Amendments to the Law on the Development and Strengthening of the Financial Sector (P2SK Law). This Law consists of 10 chapters and 73 articles.

What is PFII?

Article 1 number 1 defines PFII as an area that has financial and administrative independence as well as certain legal specificities that can adopt or adjust to international principles and standards. Simply put, PFII is an area with familiar rules of the game for global investors and financial institutions, but remains under Indonesian sovereignty. PFII was established by the central government through a government regulation (PP) at the proposal of the Minister of Finance, and the proposal contains at least location, capital, and feasibility studies (Article 3). The location must not be in a special economic zone (SEZ), so PFII is a regime different from SEZs.

What was PFII formed for?

PFII is expected to enhance Indonesia’s competitiveness as an international financial center, attract investment and global financial institutions, as well as finance the real sector, national strategic projects, infrastructure, and climate finance. PFII is also aimed at creating jobs, increasing the capacity of Indonesia’s human resources, and developing Islamic finance and a green and blue economy.

What business activities can be done at PFII?

Article 5 divides business activities at PFII into three groups.

• The first group is the financial sector, including banking, insurance, Islamic finance, capital markets and carbon exchanges, pension funds, financial technology, international commodity trading, bullion, trust funds, family offices, and investment management.
• The second group is financial sector supporters, such as public accountants, appraisers, notaries, legal consultants, tax consultants, and actuaries.
• The third group is other sectors, such as transportation, accommodation, health, tourism, and food and beverages.

Who manages PFII?

The President delegates the management of the PFII to the Governor of the PFII, who is directly responsible to the President (Article 10). The Governor chairs the PFII Board and the members of the PFII Board consist of:

• Head of the PFII Supervisory Agency (LP PFII);
• Head of the Financial Services Supervisory Institution of PFII (LPJK PFII); and
• At most four people from community elements.

In addition, PFII is managed by the PFII Advisory Board chaired by the Minister of Finance who is also a member, as well as other members, namely:

• Governor of Bank Indonesia,
• Chairman of the Board of Commissioners of the Financial Services Authority,
• Chairman of the Board of Commissioners of the Deposit Insurance Corporation; and
• Head of the Financial Transaction Reporting and Analysis Center,

How is a dispute resolved?

If a Company established in the PFII Region has a dispute, the dispute resolution is resolved in two ways:

• The first way of dispute resolution is the PPII Arbitration Institution, which organizes arbitration, mediation, conciliation, and expert determination based on the agreement of the parties.
• The second way is the PPII Court, a special court within the general judiciary that has exclusive jurisdiction over cases of business activities and contracts at PFII, cases arising from the provision of tax facilities, bankruptcy of PPII business actors, and cases related to the decision of the PPII authority.

What makes PFII different from other regions?

PFII is a territory located in Indonesia that is adjusted to the applicable international rules and uses English in operational activities. The applicable laws in the PFII area are those that are subject to Indonesian law, except civil and business law and certain provisions set by the PFII Board. The PFII Board in determining its regulations may adopt international commercial law, international financial center practices, international standards, and propriety and fairness.

Business activities are carried out in foreign exchange, while the rupiah is only used for supporting operational transactions and daily needs. Business actors are guaranteed to be able to transfer and repatriate (bring back to their home countries) capital, profits, and dividends without delay (Article 69).

Conclusion

The PFII Law lays down a complete framework for international financial centers in Indonesia, with its own institutions, laws, languages, currencies, and courts as well as tax facilities for up to 50 years for the core sector. However, these facilities do not apply automatically. Qualification requirements, global minimum taxes, and unpublished implementing rules will determine the amount of benefits that businesses actually enjoy.

Andersen in Indonesia team is ready to help your company understand the opportunities and obligations in PFII, from assessing the feasibility of tax facilities, analyzing the impact of the global minimum tax, to planning a business structure and documentation of transfer pricing. Contact us to map out the right steps now.

By Tommy Hendharto Oetomo – Managing Partner