JAKARTA - Indonesia is exploring plans to establish a “special financial center,” with Bali emerging as a potential location, as President Prabowo Subianto said during the Government Working Meeting (RKP) on April 8 at the State Palace, Jakarta.

Prabowo said capital is moving out of the Middle East due to uncertainty around the Strait of Hormuz and the Iran–Israel–US proxy conflict, asking, “Where is the money from the Middle East going?” and adding, “which country isn’t at war right now?” 

“Now you go to Bali, and you see how many Russians and Ukrainians there are. Our plan is to build a special financial center; we're looking for a location,” Prabowo said. He also added that Indonesia is viewed as an attractive destination because it is not directly involved in major conflicts.

The idea of ​​a dedicated financial hub, he added, is not new. According to Prabowo, Luhut Binsar Pandjaitan has been pushing for such a concept “for a long time.” Still, he made it clear that no final decision had been taken, including on the location.

Foreigners can only run a revenue-generating business in Indonesia through a PT PMA under Law No. 25 of 2007 on Investment and Law No. 40 of 2007 on Limited Liability Companies, with sectors governed by Presidential Regulation No. 10 of 2021 (as amended by PR No. 49/2021). 

A PT PMA requires at least Rp2.5 billion in paid-up capital and over Rp10 billion in total investment per business line, and must be registered via the OSS system under the Investment Coordinating Board (BKPM), while representative offices (KPPA) are allowed but cannot generate revenue.

Elsewhere in the meeting, Prabowo Subianto also warned that global oil prices are heavily influenced by tensions around the Strait of Hormuz.

“The current war in the Middle East proves that one strait, the Strait of Hormuz, determines the lives of many nations and the price of oil. One strait, 33 miles, what’s that? Sixty kilometers. Now, the key to Hormuz is held by one country,” he said. 

No details were given on the structure, timeline, or regulatory setup of the proposed financial center.