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1、INDONESIAINVESTMENTGUIDEBOOK20227INDONESIAINVESTMENTGUIDEBOOKForeword3FOREWORDimproved performance from the previous year.Data from BKPM shows the investment value in January-September 2022,both for Domestic Investment and Foreign Investment reached IDR892.4 trillion,or an increase of 35.3 percent c
2、ompared to the same period of the previous year.The confidence of investors to invest in Indonesia is definitely very exhilarating,considering that this is proof that this country has potential natural resources,competent human resources,and conducive government policies for investment.Therefore we
3、will try to maintain this trust so that investment in Indonesia can achieve impressive growth in the coming years especially in the next year where there are increasing challenges of inflation and recession.President Jokowi has emphasized that the competition to find investors will be tougher and ti
4、ghter.Other countries,including developed countries,will compete to attract investors into their country.So,investors trust in Indonesia,which has grown well so far,must be properly maintained by implementing policies that support the growth of the investment climate,including fiscal and monetary po
5、licies.Therefore,I hope that this guidebook can provide an overview to investors regarding incentives,opportunities,business licensing,and the tax system in Indonesia in relation to investment and ease of doing business,so that we can provide the best service and ensure that every investment that en
6、ters Indonesia can provide multiple benefits and effects that are not only beneficial for the investors but also beneficial for this nation.nvestment plays a significant important role for the economic growth of a country.In addition to creating jobs,investment also has a multiplier effect from one
7、economic sector to another.Realization of investment in Indonesia indicates an December 2022H.E.Bahlil LahadaliaMinister of Investment/the Head of the BKPMTable of Contents4FOREWORDTABLE OF CONTENTSI.INDONESIA AT A GLANCE 1.Regions in Indonesia 2.The State Capital City of Nusantara(Ibukota Negara Nu
8、santara/IKN)3.Demography 4.Economic Overview 4.1 General Overview 4.2 Vision of Indonesia 2045 4.3 The Economic Zone as a Strategic Investment Location 5.Political Overview 6.Business Culture 7.Investment Climate 7.1 Sovereign Credit Rating Indonesia 7.2 National Industrial Development Master Plan f
9、or 2015-2035 8.Payment System 9.Living in Indonesia 9.1 Housing and Living Cost 9.2 Health and Education Facilities 9.3 Communicating with Local CommunityII.INVESTMENT PROCEDURES 1.OSS RBA 1.1 The Risk Based Approach(RBA)Concept 1.2 About OSS RBA(Online Single Submission Risk Based Approach)1.3 Info
10、rmation Subsystem,Business Licensing and Supervision 2.Starting a Bussiness 2.1 Classification of Company Based on Capital 2.2 Categories of Business Scale and Business Actors 2.3 Explanation of Forms of Business for Non-UMK 2.4 Investment Limitations 2.5 Forms of Foreign Business in Indonesia 2.6 E
11、stablishment Process of a Foreign Investment Company34783363738384050555575864646769697380TABLE OF CONTENTSTable of Contents5 3.Getting a License 3.1 OSS RBA Access Rights 3.2 Processes Conducted at the OSS RBA System 3.3 Indonesian Standard Industrial Classification 3.4 Basic
12、Requirements for Risk-Based Business LicensingIII.LEGAL OVERVIEW FOR FOREIGN INVESTOR 1.Employment 1.1 Utilization of Foreign Workers 1.2 Fixed-Term Workers 1.3 Outsourcing 1.4 Working Hours 1.5 Termination of Employment 1.6 Regional Minimum Wage 1.7 Social Security Program 2.Immigration Process 2.1
13、 Types of Visa 2.2 Stay Permit 3.Land and the Environment 3.1 Land Rights 3.2 Conformity of Spatial Utilization Activities 3.3 Buildings 3.4 Environment 4.Logistics 4.1 National Logistic Ecosystem(NLE)Collaborative Platform 4.2 Seaports in Indonesia 5.Infrastructure 6.Trade 6.1 Trade Agreements 6.2
14、Exports and Imports 6.3 Distribution of Goods 7.Utilization of Domestic Products 7.1 Increasing the use of Domestic Products 7.2 Domestic Component Level(TKDN)7.3 Company Benefit Weight(BMP)8.Investment Protection84848587889293939697979807120120
15、121122Table of Contents6IV.TAXATION 1.Corporate Income Tax(CIT)1.1 Financial Statatement 1.2 Tax Rate 1.3 Tax Incentive a.Tax Holiday b.Tax Allowance c.R&D,Vocational Tax Facilities&Labor-Intensive Tax Facilities d.Import duty excemption 1.4 Withholding Taxes 1.5 Transfer Pricing 1.6 Tax Administrat
16、ion 2.Individual Income Tax 3.Dividend 4.VAT and Luxury-Goods Sales tax 4.1 Value-Added Tax 4.2 Luxury-Goods Sales Tax 5.Other Taxes 5.1 PBB 5.2 Stamp Duty 6.Statute of LimitationCONTACT US60703144146Indonesia at A Glance7Chapter 1Indonesia at a
17、 GlanceIndonesia at A Glance8SumatraJavaBali&Nusa TenggaraKalimantanSulawesiMaluku&Papua346243Nanggroe Aceh Darussalam North SumatraSouth SumatraWest SumatraBengkuluRiauRiau IslandsJambiLampungBangka BelitungBanda AcehMedanPalembangPadangBengkuluPekanbaruTanjung Pina
18、ngJambiBandar LampungPangkal Pinang1.2.3.4.5.6.7.8.9.10NoProvinceIslandCapital CitySumatraIndonesia is an archipelagic country which since July 2022 administratively consists of 38 provinces.The last three Provinces are the result of the expansion of the Papua Province,namely:Central Papua Province
19、with Timika as the capital,Highlands Papua Province with Wamena as the capital,and South Papua Province with Merauke as the capital.The 38 provinces of Indonesia,according to their distribution areas,as of July 2022,are as follows:1.REGIONS IN INDONESIAIndonesia at A Glance9BantenDKI JakartaWest Jav
20、aCentral JavaSpecial Region of YogyakartaEast JavaWest KalimantanEast KalimantanSouth KalimantanCentral KalimantanNorth KalimantanBaliEast Nusa TenggaraWest Nusa TenggaraGorontaloWest Sulawesi Central SulawesiNorth SulawesiSoutheast SulawesiSouth SulawesiNorth MalukuMalukuSouthwest PapuaWest PapuaPa
21、puaCentral PapuaHighland PapuaSouth PapuaSerangDKI JakartaBandungSemarangYogyakartaSurabayaPontianakSamarindaBanjarmasinPalangkarayaTanjung SelorDenpasarKupangMataramGorontaloMamujuPaluManadoKendariMakassarTernateAmbonSorongManokwariJayapuraTimikaWamenaMerauke1.2.3.4.5.6.1.2.3.4.5.1.2.3.1.2.3.4.5.6.
22、1.2.3.4.5.6.7.8.NoProvinceIslandCapital CityJavaKalimantanNusa Tenggara and BaliSulawesiMaluku and PapuaIndonesia at A Glance10Top 10 Provinces by Regional GDP(PDRB)2016-2021(In IDR trillion)DKI JakartaEast JavaWest JavaCentral JavaNorth SumatraRiauEast KalimantanBantenSouth SulawesiSouth Sumatra2,1
23、59.1 1,855.7 1,653.2 1,087.3 626.1 681.7 508.9 517.9 377.1 353.92,365.4 2,012.9 1,788.1 1,172.8 684.6 704.7 591.9 563.6 415.6 382.92,592.6 2,188.8 1,960.6 1,268.3 741.3 752.3 635.5 613.8 461.8 419.42,768.2 2,299.8 2,084.6 1,347.9 811.2 728.6 607.6 626.0 504.1 456.62,914.6 2,454.5 2,209.8 1,420.8 859
24、.9 843.2 695.2 665.9 545.2 491.62,772.42,299.52,0881,348.6811.3729.2626.4607.3504.5458.4Province2001920202021Top 5 FDI by Location 2016-2021(In USD Billion excl.upstream oil,gas,and financial sectors)West JavaDKI JakartaBantenCentral JavaCentral Sulawesi5.5 3.4 2.9 1.0 1.65.14.632.41.55.6
25、4.92.82.41.35.94.11.92.71.84.83.62.11.41.85.2 3.3 2.2 1.5 2.7Province2001920212020Until now,the capital of the country is DKI Jakarta and the economic cycle is still centered on the island of Java.Nevertheless,the government continues to encourage the creation of equitable development for
26、 all regions of Indonesia.Infrastructure development in eastern Indonesia(Sulawesi,the Nusa Tenggara Islands,Bali,the Maluku Islands and Papua)is to be implemented more quickly.The transfer of the capital of the State named Nusantara to the Province of East Kalimantan.Source:Statistics Indonesia(BPS
27、)Source:Ministry of Investment(BKPM)Indonesia at A Glance11Around 57%of Indonesias population is currently concentrated in Java.The contribution of the Java Island economy is 59.0%of the National GDP.There is Water Availability Crisis in Java,Especially in DKI Jakarta and East Java.Very high urbaniz
28、ation growth is accompanied by high congestion and unhealthy air quality.Decrease in the carrying capacity of the environment of Jakarta,namely the decline in groundwater levels,heavily polluted reservoirs and rivers,and sea levels rise.Threats of flood,earthquake and land sink in Jakarta.The larges
29、t land conversion occurs in Java.2.THE STATE CAPITAL CITY OF NUSANTARA (IBUKOTA NEGARA NUSANTARA/IKN)Indonesia will have a new capital city based on Law Number 3 Year 2022 on IKN.Nusantara is the official name of the new state capital which will replace Jakarta starting in 2024.The state capital cit
30、y of Nusantara,abbreviated as IKN,is located on the east coast of the island of Kalimantan,namely North Penajam Paser Regency and Kutai Kartanegara Regency which is Sambo Tenggarong Metropolitan area.The transfer of the state capital is an urgent matter for the following reasons:IKN will be designed
31、 in such a way as to be the most sustainable city in the world,namely a safe and affordable city,designed in accordance with natural conditions,connected,active and accessible,circular and robust,as well as low in carbon emissions.IKN has become a symbol of the identity of the Indonesian people with
32、 a distinctively Indonesian diversity with the motto Bhinneka Tunggal Ika(Unity in Diversity).IKN is the driving force of Indonesias future economy with convenience and efficiency through technology and innovation,as well as providing strong economic opportunities for all.Indonesia at A Glance12The
33、province of East Kalimantan was chosen because there are already large areas of land which are owned by the government or by BUMN,thus reducing the cost of land procurement.Geographically,East Kalimantan is located in the middle of Indonesia.The population structure is heterogeneous and open,so that
34、 the potential for low-conflict and has a culture that is open to newcomers,representing justice.This province has the carrying capacity of raw land and water,close to the existing city which has been developed for the efficiency of initial infrastructure investment.East Kalimantan fulfills the peri
35、meter of defense and security,at least against natural disasters.Defense can be supported by the Tri Dimensions of Land,Sea and Air.Location accessibility is high,close to two major cities:Balikpapan and Samarinda.The main infrastructure of IKN is the Balikpapan-Samarinda and trans-Kalimantan toll r
36、oads;Airports in Balikpapan and Samarinda;Kariangau Container Terminal in Balikpapan and Semayang Port in Samarinda.IKN is located in the Indonesian Archipelagic Sea Lane II(Makassar Strait).IKN land is wide,with the status of Production Forest(Hutan Produksi/HP)and Plantation.Raw water comes from 3
37、 existing reservoirs,2 planned reservoirs,4 rivers and 4 watersheds.IKN consists of 3 areas,the first is IKN West Area which consists of offices,business areas,talent development centers,and universities.The second area is Central Government Core Area(Kawasan Inti Pusat Pemerintahan/KIPP)which consi
38、sts of national government,smart government and offices.And the third area is IKN East Area which consists of offices,business areas,talent development center,business hotels,and MICE(Meeting,Incentive,Convention and Exhibition).IKN has an area of 256,142.72 ha.75%of IKN Area will be planned to be a
39、 green open space of which 65%become a protected area and 10%for food production.IKN is developed with 100%clean energy.The 56,180.87 hectare of IKN area(Kawasan IKN/K-IKN)comprises various mixed-use zones and neighborhoods that support the“10-minute walk”concept and social connectivity.K-IKN are de
40、signed in harmony with nature,with a minimum of 50%green space.80%of trips are undertaken via public transportation or the active mobility of residents.100%green space turnover for each NorthKalimantanSamarindaBalikpapanWestKalimantanEastKalimantanSouthKalimantanCentralKalimantanIndonesia at A Glanc
41、e13Tariff Scheme/Availability PaymentDesign,Build,Finance and Maintenance(DBFM Holland)SchemeDesign,Build,Finance,Operate and Maintenance SchemeK-IKN is a city within a City within a forested area,the shade of green and blue which supports an active and healthy lifestyle.Housing for state civil serv
42、ants(Aparatur Sipil Negara/ASN)is designed in a sustainable manner,supports the concept of walkability and facilitates social relations.The central government core area(KIPP)which consists of the center of government and residential areas for ASN housing are designed with sustainable design,supporti
43、ng the concept of walkability and facilitating social relations,harmony with nature,supporting the concept of walkability,ease of accessibility,wind circulation,and vehicle-free area.The initial transfer from DKI Jakarta to IKN is to be carried out in 2020-2024.During this period,the main infrastruc
44、ture(the Presidential Palace,the MPR/DPR Building)and housing complexes will be constructed in the Primary KIKN area,the transfer of initial ASN(TNI,Polri,MPR),basic main infrastructure has finished construction and has operated(e.g.water,energy,rail)for 500 thousand residents in the initial stage.T
45、he President will transfer to the KIKN before 16 August 2024 and celebrate the Commemoration of Indonesian Independence Day at the KIKN on 17 August 2024.Then in 2025-2035 the IKN will be established as a formidable core area.During this period,the next phase of the city(innovation and economic cent
46、er)is developed,the transfer of the IKN government center is completed,the priority economic sectors are developed,and the incentive system is implemented for the priority economic sectors,so as to achieve the Sustainable Development Goals(SDGs).In addition to using the State Revenue and Expenditure
47、 Budget(Anggaran Pendapatan Belanja Negara/APBN),the development of IKN is also conducted through the Public-Private Partnership(PPP)scheme.The cooperation schemes are:Indonesia at A Glance14Turnkey Project and Maintenance Direct InvestmentSubscription Model(Subscription Model Masayoshi Softbank)Mod
48、el 1 with 50%government and Model 2 with 100%privateDirect Investment financed by the private sectors and National/Regional owned enterprises(Badan Usaha Milik Negara/Daerah/BUMN/D)The development is estimated to cost IDR 466 trillion,the majority of which is sourced from PPPs.State budget funds are
49、 to be used for:Construction of the State Palace and strategic Indonesian National Armed Forces(TNI)/Indonesian National Police(POLRI)buildings(military bases),procurement of land and basic infrastructure(access roads),Diplomatic Compound(land),Green open spaces(including cultural parks),Houses of A
50、SN/TNI/Officials POLRI.PPP funds are to be used for the construction of Executive,Legislative and Judicial Buildings,Connectivity improvement(airports,ports,and toll/non-toll roads),educational facilities,museums and health facilities,as well as basic infrastructure and utilities,as well as ASN/POLR
51、I housings that are not included in the state budget(APBN).Meanwhile,funds sourced from the private sector or BUMN/D are used to build public housing,universities and private educational institutions,Science-techno parks,private health facilities,shopping centers,and MICE.3.DEMOGRAPHYThe total popul
52、ation of Indonesia in 2022 is 275.8 million.Indonesias population has never been reduced,every year it always increases at a rate of about 1%.A large population reflects the amount of manpower resources.Despite the unequal population density.DKI Jakarta is the most populous province,far from the sta
53、te capital city of Nusantara,which will be located in East Kalimantan.Of the 35 provinces,DKI Jakarta has the highest population density,while East Kalimantan has the lowest rank of 35.Indonesia at A Glance15Figure 3.1.Population Density by Province(people/km2)DKI JakartaWest JavaBantenSpecial Regio
54、n of YogyakartaCentral JavaEast JavaBaliWest Nusa TenggaraLampungRiau IslandsNorth SumatraSouth SulawesiNorth SulawesiIndonesiaWest SumatraEast Nusa TenggaraSouth KalimantanGorontaloBengkuluSouth SumatraAcehBangka Belitung IslandsWest SulawesiRiauJambiSoutheast Sulawesi38750273
55、2442672000092939345678953274728626025220327908557552902622582053293929086757270RankProvince201920202021Indonesia at A Glance16Central S
56、ulawesiNorth MalukuMalukuWest KalimantanEast KalimantanCentral KalimantanPapuaWest papuaNorth Kalimantan493938342929303403937294037301814119RankProvince201920202021Source:Central Bureau of Statistics(2022)https:/www.bps.go.id/indicator/12/141/1/ketan-penduduk-mensura
57、t-provinsi.htmlIn 2021,69.28%of the population will be in the productive age group(15-64 years).Meanwhile,the percentage of toddlers and children is much higher than the elderly.Figure 3.2.Population Composition by Age Group 2021(in%)Toddlers 0-4 YearsChildren 5-9 years oldYouth 10-14 years oldProdu
58、ctive 15-64 YearsSeniors 65-75+Total8.18%8.16%8.26%69.36%6.03%100.00%7.99%7.99%7.95%69.20%6.87%100.00%8.08%8.08%8.11%69.28%6.45%100.00%Age GroupMaleFemaleTotalSource:Statistics Indonesia(BPS)Image source:The Jakarta PostIndonesia at A Glance17A large population is a large market potential.The averag
59、e expenditure per capita in 2021 is IDR971,445.Expenditures on food still dominate.Despite the decline in growth due to the COVID-19 pandemic,household expenses continue to increase each year.Figure 3.3.Average Expenditure per Capita(Rupiah Per Month)2013-2021In the future,Indonesias population is e
60、stimated to be above 300 million in 2033.The dependency ratio will be above 50%after 2037.The demographic bonus will be experienced until 2037.FoodNon-FoodTotalTotal Growth545,942 425,503971,4454.04%518,073 415,622 933,695 5.76%490,754 392,075 882,829 3.61%479,558 372,548 852,105 9.16%457,927 322,66
61、6 780,593 9.75%397,100 314,166 711,266 7.86%366,834 292,580 659,414 15.16%336,738 235,848 572,58613.28%299,112 206,349 505,461 Output TypeAverage expenditure per capita(Rupiah per month)20201520142013PopulationMaleFemaleTotalParameter2022202015(1)(9)(8)(7)
62、(6)(5)(4)(3)(2)Age Composition(%)0-1415-6665+Depency Ratio(%)128 483,4127 104,5255 587,926,068,35,746,3129 910,2128 586,3258 496,525,769,55,946,1131 310,6130 044,9261 355,525,468,66,145,9132 683,0131 478,7264 161,625,169,66,345,7134 025,6132 886,3266 911,924,868,76,545,6135 337,0134 266,4269 603,424
63、,568,76,745,5136 623,4135 625,0272 248,524,268,87,045,4137 891,0136 968,1274 859,124,068,87,345,4Source:Statistics Indonesia(BPS)Indonesia at A Glance18PopulationMaleFemaleTotalParameter20302029202820272026202520242023(1)(17)(16)(15)(14)(13)(12)(11)(10)Age Composition(%)0-1415-6665+Depency Ratio(%)1
64、39 138,1138 294,3279 432,423,768,77,545,5140 363,2138 602,0279 965,223,568,77,845,6141 564,8140 889,7282 454,422,368,68,145,7142 740,7142 155,2284 895,923,168,58,445,9143 888,8143 396,5287 285,322,968,48,746,1145 007,9144 612,2289 620,222,768,39,046,4146 096,9145 801,0191 897,922,568,29,346,7147 154
65、,6146 961,5294 116,122,468,09,647,0PopulationMaleFemaleTotalParameter20382037203620352034203320322031(1)(25)(24)(23)(22)(21)(20)(19)(18)Age Composition(%)0-1415-6665+Depency Ratio(%)148 179,4148 091,9296 271,322,267,99,947,4149 169,7149 190,7298 360,422,167,710,247,7150 124,7150 256,6300 381,321,967
66、,510,648,1131 043,8151 288,4302 332,221,867,310,948,5151 926,6152 285,3204 211,921,767,111,249,0152 772,8153 246,4306 019,321,666,911,549,5153 582,2154 170,7307 752,921,566,711,950,0154 354,5155 057,4309 411,921,466,512,250,4Indonesia at A Glance194.ECONOMIC OVERVIEW 4.1 General Overview Gross Domes
67、tic Product(GDP)is the monetary market value of all final goods and services produced within a country during a given period.GDP gives an idea of the size of a countrys economy.If divid-ed by the total population,the GDP per capita indicates the level of welfare of the population.In 2022,Indonesia i
68、s ranked 16th out of 212 countries around the world.In ASEAN,Indonesia always ranks first.Indonesia has the largest area and population with the largest number,which makes Indonesia the largest economy in all of ASEAN.PopulationMaleFemaleTotalParameter2045204420432042204120402039(1)(32)(31)(30)(29)(
69、28)(27)(26)Age Composition(%)0-1415-6665+Depency Ratio(%)155 090,0155 906,2310 996,221,266,312,550,9155 788,8156 716,8312 505,621,166,112,851,3156 451,4157 489,3313 940,721,066,913,151,8157 078,5158 224,0315 302,520,965,713,352,2157 670,9158 921,3316 592,220,965,513,652,6158 229,5159 581,8317 811,32
70、0,865,413,953,0158 735,0160 206318 961,020,765,214,153,4Indonesia at A Glance20IndonesiaMalaysiaSingaporePhilippinesMyanmarVietnamThailandBrunei DarussalamCambodiaLao PDR1,016 319343 328 61 281 456 12 22 17 1,042 359 377 347 67 309 507 14 25 18 1,119 365 375 377 69 330 544 13 27 19 1,059 337 345362
71、79 343 500 12 26 19 1,186 373 397 394 65 363 506 14 27 19 ASEAN Country200202021Source:World Development IndicatorIndonesiaMalaysiaSingaporePhilippinesMyanmarVietnamThailandBrunei DarussalamCambodiaLao PDR5.075.814.666.935.756.944.181.337.006.895.174.843.666.346.407.204.220.057.476.255.02
72、4.441.106.126.757.152.153.877.055.46-2.07-5.65-4.14-9.523.172.94-6.201.13-3.100.503.693.137.615.70-17.982.591.57-1.613.032.53ASEAN Country200202021Source:World Development IndicatorGDP(current billion US$)Indonesias economic growth from year to year is relatively stable compared to other
73、ASEAN coun-tries.When the Covid-19 pandemic hit,Indonesia had experienced negative economic growth,but then it turned positive again in 2021.GDP growth(annual%)Indonesia at A Glance21The primary driving force of the economy is household consumption.The composition of GDP from the expenditure side is
74、 Household Consumption,Investment,Government Expenditure,and net export.Indonesias 2021 GDP shows that 55.6%comes from household consumption,9.1%government expenditure,32.5%investment and 2.7%net export.Indonesias Key Economic Outlook IndicatorsGross domestic product,current prices(Billions U.S.doll
75、ars)Gross domestic product per capita,current prices(U.S.dollars)Inflation,average consumer prices(%)Unemployment rate(Percent of total labor force)General government revenue(Percent of GDP)General government total expenditure(Percent of GDP)Current account balance(U.S.dollars)1.2.3.4.5.6.7.1,042.71
76、3,947.253.2925.2414.88116.631-30.6331,120.054,196.332.825.1814.15416.383-30.2791,059.903,922.602.0337.0712.46518.604-4.4331,186.074,356.561.566.4913.59418.2123.3261,289.304,690.753.29613.52717.49857.6611,410.755,085.023.3365.613.41416.366.571,518.455,423.702.9855.413.53816.399-16.5511,628.945,767.08
77、6.895.313.91616.485-19.483EconomicIndicatorsNo202520242023202220218Source:International Monetary Fund,World Economic Outlook Database,April 2022Note:Estimates Start After 2021.The Indonesian economy has undergone changes since the enactment of Law No.11 Year 2020 on Job Creation(Law No.11
78、 Year 2020)in October 2020.The Law reforms taxation and manpower regulations.The objective of the law is to reduce bureaucracy and to stimulate post-pandemic investment.In the recent development,Law No.11 Year 2020 has been revoked by Regulation of the Government in Lieu of Law No.22 Year 2022(“Regu
79、lation of the Government in Lieu of Law No.2 Year 2022).The Regulation of the Government in Lieu of Law signed by the President Jokowi on 30 December 2022.Therefore,all mentions in this investment book that quote or use reference from the Job Creation Law namely Law No.11 of 2020 and its implementin
80、g regulations,currently the reference is Regulation of the Government in Lieu of Law No.2 Year 2022.Indonesia at A Glance22Furthermore,in order to respond to the COVID-19 crisis,the government is implementing an emergency fiscal package equivalent to 3.8%of GDP(actual expenses)in 2020 and 4.2%of GDP
81、 in 2021,in order to deal with the health impacts,providing assistance to households and businesses,and supporting vaccine rollouts and economic recovery.In 2022,the allocation of national economic recovery funds amounted to IDR 455.62 trillion.As of 24 June 2022,the total realization of the COVID-1
82、9 Mitigation and National Economic Recovery(Penanganan COVID-19 dan Pemulihan Ekonomi Nasional/PC-PEN)budget reached IDR 118.2 trillion or 25.9%of the budget allocation.In 2023 this allocation will be discontinued.4.2 Vision of Indonesia 2045Vision of Indonesia 2045 was launched in 2015,as Indonesia
83、 celebrated its 70th year of independence.The target of economic development in 2045 is the realization of an innovative,modern and prosperous Indonesian economy as a basis for Indonesia to become a barometer and driving force of the world economy as well as to become an influential country in the A
84、sia-Pacific region and the world.On average,the Indonesian economy is able to grow by 5.7 percent per year.Consumption will increase with an average growth rate of 5.3 percent per year.The level of trade openness is increased to 56.5 percent and the GDP share of investment to GDP increased to 38.1 p
85、ercent.Indonesia will enter the high-income country group around 2036.In 2036,Indonesia will emerge from the middle-income trap and become a high-income country.Windows of opportunity in which the number of productive age is relatively higher compared to the young and elderly population is utilized
86、as well as possible.Indonesias GDP per capita in 2036 is estimated to be around USD 13,045,then it will continue to increase until it becomes USD 23,199 in 2045.By 2045,Indonesia is projected to be the fifth-largest country in the world with a nominal Indonesian GDP of USD 7.4 trillion,after China(U
87、SD 40.1 trillion),the United States(USD 31.1 trillion),India(USD 19,3 trillion)and Japan(USD 7.5 trillion).High and inclusive economic growth will increase Indonesias middle-income class.Using the definition of the consuming class by McKinsey,Indonesian people who are categorized into middle-income
88、class in 2020 is estimated to reach 85 million of(31 percent of the population),while in 2030,145 million people(49 percent of the population)in 2040,187 million people(60 percent of the population),and in 2045,223 million people(70 percent of the population).The middle-income class is defined as re
89、sidents with an income of USD 3600 per year;while others USD 3600 per year.Indonesia at A Glance2319 Special Economic Zones(15 existing and 4 new)127 Industrial Zones4 Free Trade Zones1,360 Bonded Zones91 Bonded Logistic Centers across 131 location4.3 The Economic Zone as a Strategic Investment Loca
90、tion Under Law No.3 Year 2014 on Industry as amended by Law No.11 Year 2020,and Government Regulation No.28 Year 2021 on the Organization of the Industrial Sector,it is stated that any industrial company which engages in industrial activities must be located within an Industrial Estate.This regulati
91、on specifically addresses the companies within an industrial zone.Within industrial zones,various facilities are available for companies,such as tax incentives,infrastructure and logistics,proximity to resources,lower labor costs and higher skill levels.Currently,there are:Industrial Area Indonesia
92、is focusing on its program to localize investments into economic zones which are dotted across Indonesias islands.Currently,there are 118 industrial zones spread across Indonesia,consisting of 70 industrial zones in Java,33 industrial areas in Sumatra,10 industrial zones in Kalimantan and 5 industri
93、al zones in Sulawesi.820101317191,360 BZs(Bonded Zones)91 BLCs(Bonded Logistic Centers)10 New Bali(Priority Tourism Destinations)19 SEZs(Special Economic Zones)Total Area:19,766.974 Ha4 FTZs(Free Trade Zones)Total Area:127,472 Ha127 IEs(Industrial Estate)large scaleTotal Area:6
94、3,161.12 Ha48 IEsAs location for Direct Construction Facility/KUKTotal Area:15,201.65 Ha,in 12 provincesIndonesia at A Glance24List of Indonesia Industrial EstatesFor detail location see the maps of Indonesia Economic Zone(page 23)12AcehNorth SumatraWest SumatraAceh Ladong Industrial EstateBangka Be
95、litung IslandsSadai Industrial EstateRiauPadang Industrial ParkRiau IslandsLampung Sei Mangkei Industrial Estate(KEK)Medan Star Industrial Estate Medan Industrial Estate Sei Mangkei Industrial EstateBanten Nikomas Gemilang Industrial Estate Modern Cikande Industrial Estate MGM Cikande Integrated Ind
96、ustrial Estate SBS Industrial Estate Wilmar Integrated Industrial Estate Sumber Bina Sukses Industrial Estate Millenium Industrial Estate Pasar Kemis Industrial Estate Cikupamas Industrial Estate and Warehouse Purati Kencana Alam Industrial Estate Griya Idola Industrial Park Sumber Rezeki Industrial
97、 Estate Krakatau Industrial Estate Cilegon Pancapuri Industrial Estate Tekno BSD Park Industrial Estate and Warehouse Lampung Industrial Estate KI Waylaga Bizpark Jakarta Industrial Estate Pulogadung Berikat Nusantar Industrial Estatea Tanjung Buton Industrial Estate Dumai Industrial Estate Tenayan
98、Industrial Estate Bintan Inti Industrial Estate Wiraraja Industrial Estate Batamindo Industrial Park Panbil Industrial Estate Bintang Industrial Park Latrade Industrial Park Puri Industrial Park 2000 Tunas Industrial Estate Union Industrial Park Kabil Integrated Industrial Park West Point Maritime I
99、ndustrial Park Executive Industrial Park Sarana Industrial Point Sekupang Makmur Abadi Industrial Estate Cammo Industrial Park Citra Buana Industrial Park I Citra Buana Industrial Park II Citra Buana Industrial Park III Hijrah Industrial Park Indah Industrial Park Kara Industrial Park Malindo Cipta
100、Perkasa Industrial Estate Mega Cipta Industrial Park Taiwan International Park Tunas Industri Kabil4536South SumatraTanjung Enim Industrial Estate879DKI Jakarta10Indonesia at A Glance25West Java Indonesia China Integrated Industrial Estate Bekasi International Industrial Estate MM2100 Industrial Tow
101、n BFIE MM2100 Industrial Town MMID Jababeka Industrial Estate East Jakarta Industrial Park Gobel Industrial Estate Kawasan Industri Marunda Center Greenland International Industrial Center(GIIC)Lippo Cikarang Industrial Estate Pura Delta IE Industrial Estate Cibinong Center Industrial Estate Sentul
102、Industrial Estate Indotaisei(Kota Bukit Indah)Industrial Estate Kujang Cikampek Industrial Estate Mitrakarawang Industrial Estate Karawang International Industrial City Suryacipta IE Industrial Estate Mandalapratama Permai Industrial Estate Podomoro Industrial Park Kawasan Industri Artha Industrial
103、Hill GT Tech Park Industrial Estate Karawang New Industrial City Pertiwi Lestari Industrial Estate Karawang Jabar Industrial Estate Kertajati Industrial Estate Majalengka Kota Bukit Indah Industrial City Lion Industrial Estate SKI Industrial Estate MOS Industrial Estate/Jatiluhur Industrial Smart Ci
104、ty Suryacipta Subang Smartpolitan Taifa Industrial Estate Sukabumi Industrial Estate Bogorindo Sukabumi Industrial Estate Rancaekek Industrial EstateSouth tSulawesiMakasar Industrial EstateEast Java Gresik Industrial Estate Maspion Industrial Estate Java Integrated Industrial and Port Estate Ngoro I
105、ndustrial Park Pasuruan Industrial Estate Rembang Sidoarjo Industrial Estate Berbek Safe N Lock Industrial Estate SiRIE Industrial Estate Tuban Industrial Estate Surabaya Industrial Estate Rungkut1120North Maluku Teluk Weda Industrial Estate EFI Industrial Estate21Central Java KITB Industrial Estate
106、 Batang Industrial Park Cilacap Industrial Estate Jawa Tengah Land Industrial Park Sayung Kendal Industrial Estate Wijayakusuma Industrial Estate Tanjung Emas Export Processing Zone BSB Industrial Park Terboyo Semarang Industrial Estate1214West Kalimantan15 Ketapang Ecology and Agriculture Forestery
107、 Industrial Park KBS Industrial EstateCentral Kalimantan16Surya Borneo Industrial EstateSouth Kalimantan17Batu Licin Industrial EstateEast Kalimantan18 Batuta/BCIP Industrial Estate Kariangau Industrial Estate Kaltim Industrial EstateCentral Sulawesi19 Qingdao Indonesia Industrial Park ATI Industria
108、l Estate ESKI(Enam Sembilan Industrial Estate)VDNI Industrial Estate Morowali Industrial Estate Stardust Industrial Estate Palu Industrial EstateSpecial Region of YogyakartaPiyungan Creative Economy Park13Source:Kemenperin.go.idIndonesia at A Glance26Special Economic Zones(Kawasan Ekonomi Khusus/KEK
109、)51810131.Arun Lhokseumawe SEZ(Industry)North Aceh&Kota Lhokseumawe,Aceh(2,622.5 Ha)Government Regulation No.05/2017 February 2017PT Patriot Nusantara AcehPrimary Activities:Oil and Gas Industry;Petrochemical Industry;Agro Industry;Paper IndustryOperating in December 2018Bintan
110、,Riau Islands(2,333.6 ha)Government Regulation No.42/2017-October 2017PT GBKEK Industrial ParkPrimary activities:Bauxite industry;Logistic Operating in December 20182.Sei Mangkei SEZ(Industry)Simalungun,North Sumatra(2,022.8 Ha)Government Regulation No.29/2012 February 2012PT Kawasan Industri Nusant
111、ara(KINRA)Primary Activities:Rubber Industry;Palm Oil IndustryOperating in January 20155.Galang Batang SEZ(Industry)Belitung,Bangka Belitung(2,333.6 ha)Government Regulation No.6/2016-March 2016PT Belitung Pantai IntanPrimary activities:TourismOperating in March 20196.Tanjung Kelayang SEZ(Tourism)3.
112、Batam Aero Technic(Industry)Batam,Riau Islands(30 Ha)Government Regulation No.67/2021 June 2021PT Batam Teknik(BAT)Primary Activities:MRO Industry(Maintenance,Repair,Overhaul)4.Nongsa SEZ(Tourism)Batam,Riau Islands(166,5 Ha)Government Regulation No.68/2021 June 2021PT Taman Resor Internet(Tamarin)Pr
113、imary Activities:Tourism;Digital TechnologyPandeglang,Banten(1,500 Ha)Government Regulation No.26/2012-February 2012PT.Banten West Java TDCPrimary activities:TourismOperating in February 20157.Tanjung Lesung SEZ(Tourism)Bogor,West Java(1,040 Ha)Government Regulation No.69/2021-June 2021PT MNC Land L
114、idoPrimary activities:Tourism and creative Industry8.Lido SEZ(Tourism)Indonesia at A Glance279.Kendal SEZ(Industry)Kendal,Central Java(1,000 Ha)Government Regulation No.85/2019 December 2019PT.Kendal Industrial Park(KIP)Primary activities:Textile and Clothing;Furniture;Food and Beverage;Automotive;E
115、lectronicEast Kutai,East Kalimantan(557.3 Ha)Government Regulation No.85/2014 October 2014PT Maloy Batuta Trans KalimantanPrimary activities:Palm Oil Industry;Logging IndustryOperating in April 201910.Gresik SEZ(Industry)Gresik,East Java(2,167 Ha)Government Regulation No.7/2021 June 2021PT Berkah Ka
116、wasan Manyar SejahteraPrimary activities:Metal Industry;Electronic Industry;Chemical Industry;Energy Industry;Logistic14.Maloy Batuta Trans Kalimantan SEZ(Industry)North Minahasa,North Sulawesi(197.4 Ha)Government Regulation No.84/2019 December 2019 PT.Minahasa Permai Resort Development(MPRD)Primary
117、 activities:Tourism15.Palu SEZ(Industry)Palu,Central Sulawesi(1,500 Ha)Government Regulation No.31/2014 May 2014PT.Bangun Palu Sulawesi TengahPrimary activities:Nickel and Iron Ore Industry;Caco Industry;Seaweed Industry;Rattan Processing IndustryOperating in September 201711.Singahasari SEZ(Tourism
118、)Malang,East Java(120.3 Ha)Government Regulation No.68/2019 September 2019PT Intelegensia GrahatamaPrimary activities:Tourism and Digital Technology12.Sanur SEZ(Tourism)Denpasar,Bali(41,3 Ha)Government Regulation No.41/2022 November 2022PT Hotel Indonesia NatourPrimary activities:Tourism and Healthy
119、Not Operated13.Mandalika SEZ(Tourism)Central Lombok,West Nusa Tenggara(1,035.7 Ha)Government Regulation No.52/2014 June 2014PT.Indonesia Tourism Development Center(ITDC)Primary activities:TourismOperating in October 2017Bitung,North Sulawesi(534 Ha)Government Regulation No.32/2014 May 2014PT.Membang
120、un Sulut HebatPrimary activities:Coconut Processing Industry;Fishery Industry;Herbal Pharmacy Industry17.Bitung SEZ(Industry)16.Likupang SEZ(Tourism)Indonesia at A Glance2819.Sorong SEZ(Industry)Sorong,West Papua Barat(523.7 Ha)Government Regulation No.31/2016 August 2016PT.Malamoi Olom WobokPrimary
121、 activities:Nickel Industry;Forestery(Sago);Palm Oil Industry;LogisticOperating in October 2019Morotai Islands,North Maluku(1,101.8 Ha)Government Regulation No.50/2014 May 2014PT.Jabebeka MorotaiPrimary activities:Tourism;Logistic;FisheryOperating in April 201918.Morotai SEZ(Tourism)Special Economic
122、 Zones are prepared to accelerate the achievement of national economic development.These areas maximize industrial activities,exports,imports and other economic activities that have high economic value.The government shall develop KEK through gradual transformation.The orientation of generation 1 KE
123、K is the realization of KEK for regional economic growth acceleration and equitable development nationally.Meanwhile,Generation 2 KEK is oriented towards encouraging the realization of KEK that are capable of developing added value for the mastery of technology and human resources,as manifested by t
124、he development of KEK for Health,KEK for Education,KEK for Digital Economy and KEK for Maintenance Repair and Overhaul.Special Economic Zones consist of one or several business activities,namely:Production andprocessingLogistics anddistributionResearch,digital economyand technologicaldevelopmentTour
125、ismEnergydevelopmentEducationHealthSportsFinancialservicesCreativeindustriesDevelopment andmanagement of KEKsProvision of KEKinfrastructureOther economicactivitiesIndonesia at A Glance29Deferred import duties and import tax not collected for tenants who have completed construction/developmentA tarif
126、f of 0%import duty is applied for finished goods which have 40%of local content(TKDN)d.Sales Tax on Luxury GoodsDelivery of Taxable Goods and/or Taxable service originating from maintenance,repair,and overhaul(MRO)Tenants not collected.f.Local TaxReduction of Local,Tax and/or Local Retribution by 50
127、%-100%.e.Deffered Import Dutiesb.Value Added TaxVAT is not collected on:VATDelivery of Tangible Taxable Goods From Other places within the Customs Area(TLDDP),FTZ,and bonded zone(TPB)Import of Tangible Taxable GoodsImport of Consumer Goods to Tourism SEZDelivery of Taxable Services(JKP)and/or Taxabl
128、e Goods(BKP)in the same SEZ or other SEZs Exempt from import Duty and not collected Tax in the Context of import(PDRI)for the import of capital goods and consumption goods in the Tourism SEZExempt from excise for raw materials or auxiliary materials that are used to produced finished goods which are
129、 not excisable goodsc.Customs and Excisea.Corporate Income Tax(PPH)Facilities granted to SEZ are fiscal and non-fiscal facilities.FISCAL facilities include:Investment provisions for tenants:Tax Holiday 100%for Primary Activities,subject to the amount of the investmentTax Allowance for other than pri
130、mary activities and for Primary Activities that is not eligible to get Tax Holiday facilityIDR 100 billion investment IDR 500 billion10yearsIDR 500 billion investment IDR 1 trillion15yearsIDR 1 trillion 20yearsIndonesia at A Glance30Free Trade Areas and Free Ports(Kawasan Perdagangan dan Pelabuhan B
131、ebas/KPPB)Free Trade Areas and Ports(KPPB)are regulated under Government Regulation(Peraturan Pemerintah/PP)No.41 Year 2021.The definition of a KPBPB is an area within the jurisdiction of the Unitary State of the Republic of Indonesia which is separated from the customs area and therefore free from
132、the imposition of import duty,value-added tax,sales tax on luxury goods,and excise duty.Government Regulation No.41 Year 2021 addresses the entry and exit of goods to and from the KPBPB,which are required to be undertaken at designated ports.The port referred to in this case is a port that has obtai
133、ned a permit from the minister who organizes government affairs in the transportation sector and has obtained a stipulation as a Customs Area.And NON FISCAL facilities include:Currently,there are 19 SEZs(4 new SEZs numbered 16 to 20 below)with a total area of 19,766,974 Ha.Ease Of Doing Business For
134、 Permit&LicensingForeign Property Ownership In Tourism SEZSpecial Regulation For Labour and EmploymentSimple Immigration FormalitiesEasiness For Land Titling ProceduresIntegrated Infrastructure Support From GovermentEnvironment ConvenienceOther Incentives and FacilitiesStores that are located inside
135、 Tourism SEZ can participate in the VAT refund scheme for foreign passport holdersExemption of Sales Tax on Luxury Goods for the purchase of a residential home or residence in the Tourism SEZProhibited goods are applied for export/importImport limitation is not appliedg.Goods Traffich.Special Facili
136、ties for Tourism SEZSIndonesia at A Glance31In Indonesia,there are 4(four)KPPB with a total area of 127,472 ha which are oriented for export activities.National Tourism Strategic Areas and Super Priority DestinationsThe development of priority destinations is a form of realization of the national to
137、urism development master plan for 2010-2025 which is regulated in Government Regulation no.50 Year 2011 serves as the basis for tourism development in order to improve the quality and quantity of destinations and to realize a tourism industry capable of driving the national economy.In 2015,the gover
138、nment for the first time initiated a more focused tourism development,specifically on 10 priority Indonesian tourism destinations outside of Bali.The ten priority tourism destinations outside of Bali are:Of the 10 Priority Destinations,the Government has selected five Super Priority Destinations(Des
139、tinasi Super Prioritas/DSP),namely Lake Toba,Borobudur,Manado-Likupang-Bitung,Mandalika and Labuan Bajo.All five of them have their own natural beauty,rich culture and local wisdom.BorobudurCentral JavaWakatobiNorth SulawesiLake TobaNorth SumatraTanjung KelayangBangka Belitung IslandsMorotaiNorth Ma
140、lukuTanjung LesungBantenMandalikaWest Nusa TenggaraBromo TenggerSemeruEast JavaThe ThousandIslandsDKI JakartaLabuan BajoEast Nusa TenggaraImage source:,id.wikipedia.org,goodnewsfromindonesia.id,pulauseribu.co.id,detiksport,indonesia.travelThe development of the DSP of Borobudur located in Central Ja
141、va Province focuses on the development of tourism infrastructure and ecosystem in Central Java and Special Region of Yogyakarta(Daerah Istimewa Yogyakarta/DIY)with Borobudur as its main icon.The integrated development of the DSP of Borobudur will coordinately encompass Borobudur-Yogyakarta,Solo-Sang
142、iran,Semarang-Karimunjawa.1.BorobudurIndonesia at A Glance32The development of infrastructure and tourism in the DSP Labuan Bajo,East Nusa Tenggara,was initiated in 2019 in order to support Labuan Bajo into a world-class premium natural and marine tourism destination.The construction of various faci
143、lities in Labuan Bajo,as well as the improvement of connectivity within and to this area have become the focus of the integrated infrastructure development of this DSP.The Ministry of PUPR has completed the construction of a number of facilities at Puncak Waringin,which is known as the best viewpoin
144、t for viewing the Labuan Bajo area from a height.The government also organizes and develops the waterfront area(Kawasan Beach Marina-Bukit Pramuka),the Rinca Island area and the Batumirror area.In order to ensure connectivity in Labuan Bajo,the construction of inner-city roads,which encompass roadwo
145、rks and sidewalks,is being carried out.Then to open up the accessibility of Labuan Bajo from outside,the development of Komodo Airport with terminal expansion and runway extension is also carried out.Developments within the DSP Labuan Bajo area also In order to improve connectivity at the Borobudur
146、DSP and the Joglosemar area(JogjaSolo Semarang),the Ministry of Public Works and Public Housing(Pekerjaan Umum Perumahan Rakyat/PUPR)has undertaken the construction of roads and bridges with a total length of 72.93 km with a total budget of IDR 357.06 billion for 2020.The development projects are th
147、e widening of Sentolo-Nanggulan-Dekso Road(15.6 km),the preservation of Yogyakarta-Tempel-Pakem-Prambanan Road(2.4 km),the preservation of Keprekan-Muntilan-Salam(8.59 km),the rehabilitation of the DSP Borobudur Roads,until the construction of the Kali Progo bridge(160 m),and the handling of the Kal
148、i Elo Mendut Bridge in Magelang(40 m).The projects under the Tourism Housing Facilities(Sarana Hunian Pariwisata/SHP)program arethe arrangement of the Kujon Art Village in Borobudur,the construction of 4 entrance gates for the DSP Borobudur,and the improvement of the quality of homestays in villages
149、 around the Borobudur Temple.The master plan for the development of the DSP Borobudur also develop an authoritative zone of 309 hectares in the Menoreh hills,in Purworejo,Central Java,by the Borobudur Authority Agency.This area will be turned into a resort-based tourism destination with the concept
150、of culture and adventure.the Borobudur Highland will be developed into five zones,namely the Extreme Tourism Zone,the Cultural Tourism Zone,the Entrance Gate Zone,the Exclusive Resort Zone and the Adventure Tourism Zone.Borobudur Highland is planned to have various facilities ranging from outbound c
151、enters,eco-resorts,fine dining restaurants,orchid gardens,meeting incentive convention exhibition(MICE)venues,to hotels with a total capacity of 1,050 rooms.The construction of Borobudur Highland began in 2022 with a gradual construction and is estimated to be completed in 2024.Image source:P BajoIn
152、donesia at A Glance33district and wildlife district.In cultural district,for example,the Labuan Bajo Cultural Center and the Bajo Gallery Village will be built.Meanwhile,in the adventure area,there will be a lot of adventure tourism and unique natural activities that tourists can try.In the leisure
153、and entertainment districts,sunset view points,event venues,and spa and fitness facilities will be constructed.Developments within the DSP Labuan Bajo area also encompass the construction of a 400-hectare authority zone in the Nggorang Bowosie Forest by the Executive Agency of the Labuan Bajo Flores
154、 Authority(Badan Pelaksana Otorita Labuan Bajo Flores/BPOLBF).The government plans to build tourism facilities to fulfill the total requirement of 2,000 hotel rooms in Labuan Bajo area.Authority zones will be divided into four categories:cultural district,leisure and entertainment districts,adventur
155、e addition,the DSP Lake Toba also includes the development of an authoritative zone of 386.76 hectares,which is dubbed as the Toba 3.The development of this authoritative area is carried out by the Lake Toba Authority Agency(Badan Otorita Danau Toba/BODT).Under the general development master plan,th
156、e DSP Lake Toba area will continue to be developed gradually over a period of 25 years(2020-2045).For the development of destination areas in Lake Toba and its surrounding areas,there are six sub-districts that will become main tourism areas(Kawasan Wisata Utama/KWIKWI Parapat will be developed as a
157、 MICE and recreation center,KWI Simanindo for culture,KWI Pangurpan for geotourism,KWI Balige with an urban heritage theme,KWI Muara with a cultural and geological theme,and KWI Brand with an eco-natural theme.3.Lake TobaImage source:Image source:Wikimedia CommonsThe development of the DSP Lake Toba
158、 area in North Sumatra is aimed at maximizing the huge potential of Lake Toba with its surrounding natural and cultural richness.It is planned that this DSP area will utilize new,environmentally friendly renewable energy in the future,such as the use of electric buses in tourism areas.The DSP Lake T
159、oba encompasses 8 regencies around the lake,namely Simalungun,Samosir,Toba,Humbang Hasundutan,North Tapanuli,Dairi,Karo and West Pakpak regencies.In Indonesia at A Glance34Indonesia Tourism Development Corporation(ITDC)holds the role of developer and manager of Mandalika KEK.KEK Mandalika will also
160、be equipped with world-class sports facilities,namely an international circuit and a golf course.In general,the mapping of the Mandalika KEK development is divided into 3 zones with different icons in each zone.West Zone with Kuta Beach Park as the icon,Central Zone with Pertamina International Circ
161、uit as the icon and East Zone with MICE destination DSP Mandalika in West Nusa Tenggara(Nusa Tenggara Barat/NTB)is a Special Economic Zone(KEK)which has been established by the government as a Tourism KEK since 2014 through Government Regulation No.52/2014.The master plan for the development of the
162、Mandalika KEK encompasses the development of an area of 1,175 hectares on undulating hilly land along the coast in Mandalika.The location of the Mandalika KEK also extends for 16 kilometers along the coasts of the region,which makes this DSP special in terms of location.4.MandalikaThe Lake Toba auth
163、ority zone,the Caldera Resort in Sibisa,will also be developed as a new destination with various facilities for tourists ranging from glamping sites,hotels and other facilities.A number of infrastructure developments have already been undertaken,such as the widening and preservation of the Samosir R
164、ing Road,the construction of the Balige Bypass Road in the Toba Regency,and the structuring of Ulos Huta Raja and Huta Siallagan Villages in Samosir Regency,which are villages that are frequently visited by tourists.The government has also organized the arrangement of the Free Parapat beach in Simal
165、ungun Regency,the construction of the Sidikalang Waste TPA in Dairi Regency to the construction of a drinking water treatment plant in Karo Regency.Supporting all of this,the Ministry of PUPR has also improved the quality of community housing for a total of 1,799 units,including so that they can be
166、utilized as homestays.These residences are intended to support tourism in a number of regencies in Toba,including in Samosir,Toba,North Tapanuli to Simalungun Regencies.Meanwhile,for water connectivity to Lake Toba,the Ministry of Transportation has built 13 ferry ports in seven regencies around Lak
167、e Toba and provides ferry transportation facilities.A total of seven ports have been completed,namely Ajibata and Balige Ports,Tiga Ras Port,Simanindo Port,Marbun Toruan Port and the Port.The government has also launched ferry transportation,namely KMP Pora-Pora,KMP Caldera Toba,KMP Asa-asa Water Bu
168、s,and KMP Jurung Water Bus.Image source:Detiksportand theme park as the icon.The development of infrastructure in the Mandalika KEK began in stages and in parallel since 2016.The development has continued until now and is expected to last until 2039.Indonesia at A Glance35the Likupang SEZ.In the Lik
169、upang SEZ,various tourism facilities are planned,starting from beachfront resorts,hotels and villas,commercial areas,Wallace conservation resorts and marine parks.The initial stage of the Likupang KEK development requires funds amounting to IDR2.22 trillion,of which one of the sources of funding amo
170、unting to IDR1.023 trillion comes from the application of the National Economic Recovery(PEN)funds.The development of tourism and infrastructure in this DSP does not only focus on the Likupang KEK.Tourist destinations around Likupang are also starting to grow,such as Manado,Tomohon,Bitung,Tondano an
171、d North Minahasa.In terms of improving connectivity,the Ministry has completed the construction of a number of roads connecting Manado-Bitung-Likupang,preservation of Girian Road(Bitung-Likupang),the improvement of Pulisan Beach Road and the replacement of the Marinsow Bridge.The DSP Likupang in Nor
172、th Sulawesi has been designated as a Tourism Special Economic Zone(KEK)through PP No.84/2019.Under the master plan,the Likupang KEK will be developed in an area of 197.4 hectares in Pulisan Village,East Likupang.The Likupang KEK will be developed as a premium and medium class resort area,with mariti
173、me and cultural tourism being the largest.ITDC and PT Minahasa Permai Resort Development(PT MPRD)act as developers and managers of During the last few years a number of infrastructures have been built.The largest infrastructure,of course,the establishment of the Pertamina International Street Circui
174、t with a track length of 4.3 km with 17 curves which will become the venue for the 2022 MotoGP.Other than that,a long list of infrastructure has finished its construction namely Kuta Beach Park,Bazaar Mandalika,Masjid Nurul Bilad,the construction of the Lombok International Airport(BIL)Bypass Road-M
175、andalika stages 1-3,construction of KEK Manggarai Barat flood control canal,construction of the Mandalika regional public hospital,improvement of TPA Pengengat,construction of docks and terminals of the Gili Mas Port.Funding for development in the Mandalika KEK reaches a total of IDR 9.25 trillion(u
176、ntil 2026)for the development of basic infrastructure and productive assets.Of the total funding,a total of IDR 750 billion is an injection of the state through State Capital Participation(Penyertaan Modal Negara/PMN).In the future,various facilities and infrastructures will continue to be built in
177、the Mandalika KEK to make this area an international tourist destination.In the future,this destination will be built with MICE venue,27-hole golf course,International Branded Theme Park,and Marina Sea Front.In addition,the construction of complete facilities at Mandalika will continue to be carried
178、 out,including the construction of five-star hotel rooms with a total of 20,000 rooms in the East zone and 325,000 m2 of commercial land and public space in the West zone.5.LikupangImage source:Travel KompasIndonesia at A Glance365.POLITICAL OVERVIEWIndonesia is a republic with a multi-party preside
179、ntial democracy.The president is the head of state and the government.The number of parties in Indonesia is very large.In the 2019 election,there are 14 parties participating in the general election.There will be even more political parties participating in the 2024 election.Up to December 2022,17 p
180、arties have passed the verification.Executive power is exercised by the president,vice president and ministers.Legislative power is vested in the House of Representatives and the Peoples Consultative Assembly.The judiciary is inde-pendent from the executive and the legislature.The judiciary is held
181、by the Supreme Court and the Constitutional Court.The Economist Intelligent Unit(EIU)annually measures the democracy index of all countries in the world.The score used is 1-10,the higher the score,the more democratic a country is.In 2021,the EIU placed Indonesia at number 54 out of 173 countries wit
182、h a score of 6.71.Indonesia is in second place after Malaysia,among ASEAN countries.A roundabout in the Likupang KEK has also been constructed and is equipped with various public facilities such as bicycle lanes,jogging tracks and parks.This roundabout will later serve as the main gate to the Pulisa
183、n Beach.As a form of regional development and arrangement,the Ministry of PUPR has also implemented a self-supporting housing improvement program(Program Sarhunta)which can be utilized as homestays for tourists.The improvement in the quality of Sarhuntas houses has been carried out in 263 housing un
184、its with business functions in the villages of Marinsow,Pulisan,Kinung and in a sub-district on Bunaken Island.In addition to Sarhunta,the Ministry of PUPR has also constructed the Kuwil Kawangkon Dam for flood control in Manado City.Indonesia at A Glance37The most widely used online communication a
185、pplication is the Whatsapp application either for business communication or with government officials.We recommend that you ask your Indonesian counterparts which communication method they prefer.Companies may not respond to emails very quickly,especially if the sender is not well known.Bapak(Sir)fo
186、r men and Ibu(Madam)for women are the standard polite greetings,which should be said before their first names.Exchanging business cards is the standard culture for introducing themselves to one another.The right hand is used to give or receive your business card or other goods.6.BUSINESS CULTURE Whi
187、le Indonesia is culturally diverse,the standard way of addressing any present person upon arrival and departure from any gathering is a handshake.However,this practice should be avoided due to COVID-19.Democracy Index ASEAN Countries 2021MalaysiaIndonesiaPhilippinesSingaporeThailandVietnamCambodiaLa
188、osMyanmar7.246.716.626.236.042.942.91.771.0247140165172CountryRankingScoreSource:EIUIndonesia at A Glance38Since 88%of Indonesias population is Muslim,alcohol and pork are generally not consumed.While Indonesians generally tolerate the consumption of alcohol,it is always a good idea to as
189、k if an appointment is serving alcohol or pork before ordering any beverages or food in order to show respect for their beliefs.Personal contacts and networks are very important in establishing business deals because business relationships are built on trust and familiarity.Decisions are usually mad
190、e by consensus and attempts to impose a decision will often result in the negotiation of a negative outcome.The corporate culture of larger or more traditional organizations is top-down,with final decision-making often reserved for a small group of executives.When meeting new clients,it is important
191、 to analyze these factors in order to ensure that your engagement is as productive as possible.7.INVESTMENT CLIMATE 7.1 Sovereign Credit Rating IndonesiaFitch Ratings(Fitch)on 28 June 2022 has announced Indonesias Sovereign Credit Rating at BBB(investment grade)with a stable outlook.The main factors
192、 supporting the affirmation are the favorable medium-term growth prospects and the low government debt/GDP ratio.Invitations to official events usually include the dress code to be used.Batik is a formal attire used in meetings for both men and women.Long-sleeved batik shirts are considered formal a
193、ttire and are commonly worn by both Indonesian and foreign enterpreneurs.Trousers,shirts and ties are general business attire for men and womens business attire is usually a two-piece suit with a blazer,or a simple dress with sleeves.Always allow plenty of travel time for meetings.This is due to the
194、 congestion that usually occurs in the capital city of Jakarta.Often meetings take place in conjunction with lunches between 11:30 and 14:00 or dinners between 18:30 and 20:30.Gatherings on Friday afternoons are best avoided as this is a day of prayer and businesses usually have longer lunch breaks.
195、The break on Friday is 11:00 14:00.Indonesia has 3 time zones,namely:West Indonesia Time(Waktu Indonesia Barat/WIB/Jakarta)Central Indonesia Time(Waktu Indonesia Tengah/WITA/Denpasar)East Indonesia Time(Waktu Indonesia Timur/WIT/Jayapura)*WIT is 1 hour earlier than WITAand 2 hours earlier than WIB.I
196、ndonesia at A Glance39Indonesias rating of BBB/stable outlook reflects the strong belief of international businesses that Indonesias macroeconomic stability and medium-term economic prospects will remain intact,despite the increasing global economic uncertainty.It also demonstrates the credibility o
197、f policies and the effective policy mix formulated by Bank Indonesia and the Government.In its report,Fitch predicts that the GDP growth will reach 5.8%in 2023.Indonesias economic recovery will be supported by improvements in the service sector and exports,as commodity prices will increase.Fitch pro
198、jects a current-account deficit of 1.0%of GDP by 2023.Fitch assesses the existence of domestic inflationary pressures,however,inflation is projected to remain low in the medium term of between 2-4%.Over the medium-term,the domestic economy will grow by 5.8%by 2024,driven by the implementation of the
199、 Job Creation Omnibus Law,which aims to reduce long-standing investment barriers,and to resume infrastructure spending.Fitch regards that the government will meet its budget deficit target of under 3%by 2023.Fitch estimates that the government debt will gradually decline over the course of the year
200、after it peaked this year at 44.2%of GDP.This level is well below its BBB counterparts at 55.9%.Meanwhile,reliance on foreign financing has eased,as indicated by a decrease in the ownership of non-residents in government bonds.In line with Fitch,other rating agencies also provide a stable outlook fo
201、r Indonesia.Indonesias Sovereign Credit Rating 2022 from various institutionsStandard&PoorsFitch RatingsMoodys Investor ServiceJapan Credit Rating AgencyRating and Investment Information Inc.27 April 202228 June 202210 February 202227 July 202204 July 2022BBBBBBBaa2BBB+BBB+StableStableStableStableSt
202、ableRating AgencyOutlookCredit RatingLast UpdateSource:OJKIndonesia at A Glance407.2 National Industrial Development Master Plan for 2015-2035The development of priority industries is to be undertaken in the medium and long term,in line with the National Long-Term Development Plan(Rencana Pembanguna
203、n Jangka Panjang Nasional/RPJPN).The National industrial development plan in 3 phases are:10(ten)priority industries are grouped into mainstay industry,supporting industry,and upstream industry as follows:a)Mainstay IndustriesPhase I(2015-2019)Increasing the added value of natural resources in upstr
204、eam agro-,mineral and oil-and-gas industries,followed by the selective development of supporting and mainstay industries through the preparation of industrially skilled and competent human resources,as well as improving their mastery technology.Phase II(2020-2024)Achieving competitive advantage and
205、being environmentally friendly through strengthening industrial structures and mastery of technology,as well as being supported by qualified human resources.Phase III(2025-2035)Making Indonesia a Formidable Industrial Country characterized by a strong and deep national industrial structure,high comp
206、etitiveness at the global level,as well as innovation and technology-based.Food IndustryPharmaceutical,Cosmetic and Medical Device IndustriesTextile,Leather,Footwear and Miscellaneous IndustriesTransportation Equipment IndustryElectronics and Telematics/ICT IndustryEnergy Plant Industryb)Supporting
207、Industriesc)Upstream IndustryCapital GoodsComponentsAuxiliary MaterialsServices IndustriesUpstream Agro IndustryBase-Metal and Non-Metal Mineral IndustriesOil-and-Gas and Coal-Based Chemical IndustriesIndonesia at A Glance41The development stages of priority industries are as follows:Food IndusrtyPr
208、eserved fish(frozen,dried and smoked)and filletsVarious processed fish,seaweed and other marine products(including carrageenan,fish oil,supplements and other functional foods)1.NoPriority IndustryTypes of IndustryFish Processing IndustryMilk Processing IndustryRefigerant Material IndustryVegetable-O
209、il Processing IndustryFruit and Vegetable Processing Industry-20242025-20351.2.Cocoa powderCocoa butterFood and beverages from chocolateSupplements and functional food based on cocoa1.2.3.4.Fortified cooking oil(natural and non-natural)Functional food based on vegetable oil1.2.Canned fr
210、uits/vegetablesFruit/vegetable layersSupplements and functional food based on waste of fruit processing industry 1.2.3.Milk for health(liquid,powdered and condensed milk)Probiotics and other milk-based functional foods1.2.Decaffeinated coffeeVarious organic coffee-based processed foodsCoffee-based s
211、upplements and functional foodsHigh value teaTea-based supplements1.2.High value teaTea-based supplements1.2.Milk for health(liquid,powdered and condensed milk)Probiotics and other milk-based functional foods1.2.Indonesia at A Glance42Food IndusrtyStarch from agricultural waste biomassEmergency food
212、2.NoPriority IndustryTypes of IndustryFlour IndustrySugar Cane-Based IndustryPharmaceutical and Cosmetic Industries-20242025-20351.2.SugarLiquid sugar and organic acids from sugar industry wasteSugar(Specifically outside of Java)1.2.Tropical wheat flourStarch from agricultural waste bio
213、massEmergency foodGranulated composit flour1.2.3.4.Herbal preparationsPharmaceutical saltCephalosporin groupAmlodipineGlucose Pharmaceutical Grade(for infusion)AmoxicillinGlimepiride/MetformineParacetamolBiological ProductsVaccinesHerbal/Natural ProductsCosmetic ProductsAdditional raw materials for
214、making drugs(excipient)1.2.3.4.5.6.7.8.9.10.11.12.13.14.LansoprazoleVitamin CAtorvastatinBeta-caroteneSteviosideSimvastatineBiological ProductsVaccinesHerbal/Natural ProductsCosmetic ProductsAdditional raw materials for making drugs(excipient)1.2.3.4.5.6.7.8.9.10.11.Herbal preparationsIndustrial and
215、 pharmaceutical salts,Cephalosporin group(mixed)AmlodipineGlucose Pharmaceutical Grade(for infusion)AmoxicillinGlimepiride/MetformineParacetamolLansoprazoleVitamin CAtorvastatinBeta-caroteneSteviosideBiological ProductsVaccinesHerbal/Natural ProductsTalk OsmanthusCosmetic ProductsAdditional raw mate
216、rials for making drugs(excipient)1.2.3.4.5.6.7.8.9.10.11.12.13.14.15.16.17.18.19.Export-orientedcapacity building:Indonesia at A Glance43Textile,Leather,Footwear and Various IndustriesDisposable and consumable productsHospital FurnitureOrthopedic ImplantsElectromedical devicesDiagnostic instrumentsP
217、ACS(Picture Archiving and Communication System)Software and ITDiagnostic reagents3.NoPriority IndustryTypes of IndustryMedical Device IndustryTextile IndustryLeather and Footwear IndustryWooden Furniture and Other Wooden Goods Industry-20242025-20351.2.3.4.5.6.7.8.Disposable and consuma
218、ble productsHospital FurnitureOrthopedic ImplantsElectromedical devicesDiagnostic instrumentsPACS(Picture Archiving and Communication System)Software and ITDiagnostic reagentsPOCT(Point of Care Testing)Radiology1.2.3.4.5.6.7.8.9.10.Disposable and consumable productsHospital FurnitureOrthopedic Impla
219、ntsElectromedical devicesDiagnostic instrumentsPACS(Picture Archiving and Communication System)Software and ITDiagnostic reagentsPOCT(Point of Care Testing)Radiology1.2.3.4.5.6.7.8.9.10.Textile fiberKnittingFashion garmentSpecialty Textiles1.2.3.4.Micro textile fiberDissolving rayon pulpPET recyclin
220、gGarment functional and smart apparelKnittingSpecialty Textiles1.2.3.4.5.6.Nano textile fiberSmart clothingKnittingSpecial Textiles1.2.3.4.FootwearSpecial leather products(advanced materials)Synthetic leatherNon-conventional leather material1.2.3.4.FootwearSpecial leather products(advanced materials
221、)Synthetic leatherNon-conventional leather material1.2.3.4.5.6.Special leather products(advanced materials)Synthetic leatherNon-conventional leather materialCrafts,carvings from woodWood and rattan furniture1.2.High tech wood and rattan furniture that have been certified green industryCrafts with ra
222、w materials from waste of wood processing industry1.2.High value crafts and furniture1.2.3.Indonesia at A Glance44Transportation Means IndustryPlastics for general purposesPlastics for special purposes(among others for health,automotive,and electronics)Rubber for general purposesRubber for special p
223、urposes(among other things for health,automotive,and electronic)4.NoPriority IndustryTypes of IndustryPlastic,Rubber Processing,and rubber goods IndustryMotor Vehicle IndustryRailway IndustryShipping Industry-20242025-20351.2.3.4.Automotive componentsFuel,gas and electricity enginesTran
224、smission device(power train)Heavy equipment1.2.3.4.Electric starter(engine)and fuel cellTransmission device(power train)1.2.Electric prime mover(engine)and fuel cellDiesel and electric trainsElectric trainMagnetic levitation(maglev)1.2.Electric train2.Magnetic levitation(maglev)ShipsShip components(
225、mechanical and electronic)Ship maintenance1.2.3.ShipsSubmarine(underwater exploitation)1.2.ShipsSubmarine(underwater exploitation)1.2.Aviation IndustryPropeller airplanesAircraft componentsAircraft maintenance1.2.3.Electronics IndustryElectronics and Telematics/ict Industry5.Smart home appliancesEle
226、ctronic components(without fabrication/fabless components)1.2.Smart home appliancesElectronic components(without fabrication/fabless components)1.2.Electronic componentsSmall volume semiconductor fabrication(foundry)1.2.Computer IndustryComputerHigh Speed ComputerHigh Speed Computer1.2.Indonesia at
227、A Glance45Power Generation IndustryTelecommunication transmissionSmart mobile phones6.NoPriority IndustryTypes of IndustryCommunication Equipment IndustryCapital Goods,Components,Auxiliary Materials and Services Industries7.Electrical Equipment IndustryMachinery and Equipment Industry-2
228、0242025-20351.2.Telecommunication transmission(radar and satellite)Smart mobile phones1.2.Telecommunication(satellite)transmissionElectric motors/generatorsBatterySolar cells1.2.3.Electric motors/generatorsBatterySolar cellsNuclear Power Plant1.2.3.4.Electric motors/generatorsBatterySolar cellsNucle
229、ar Power Plant1.2.3.4.Computer Numerical Control(CNC)MachineIndustrial toolsProduction process automation for electronics and food processing1.2.3.Industrial toolsCNC controllersFlexible machining centerProduction process automation for electronics and food processing1.2.3.4.CNC controllerFlexible m
230、achining centersProduction process automation for electronics and food processing1.2.3.Components IndustryPackaging(carton and plastic base)Processing of rubber and rubber goods(among others pnumatic tires,outer tires,and inner tubes)Giant vulcanised tires(for aircraft and offroad)Rubber goods for i
231、ndustrial purposes and automotive componentsAdditivesTextile dyes(dye stuff),plastics and rubber(pigment)Inorganic chemicals(among others iodine and sea minerals)1.2.3.4.5.6.7.High quality packaging(carton and plastic base)Engineering rubber and plastic goodsGiant vulcanised tires(for aircraft and o
232、ffroad)AdditivesTextile dyes(dye stuff),plastics and rubber(pigment)Inorganic chemicals(including iodine and marine minerals)1.2.3.4.5.High quality packaging(carton and plastic base)Plastic and rubber products for health,electricity,electronics and machineryPlastic and rubber productsadvanced materi
233、alsAdditivesTextile dyes(dye stuff),plastics and rubber(pigment)Inorganic chemicals(including iodine and marine minerals)1.2.3.4.5.CatalystSolvent1.2.Electronics and Telematics/ict Industry5.Auxiliary Materials IndustryIndonesia at A Glance46Factory designIndustrial process servicesMaintenance of in
234、dustrial machines/equipmentNoPriority IndustryTypes of IndustryIndustrial ServicesUpstream Agro Industry8.Oleofood Industry-20242025-20351.2.3.Factory designIndustrial process services(precision and high added value)Maintenance of industrial machines/equipment1.2.3.OleinStearinGliserolP
235、alm Fatty Acid Distillate(PFAD)Coco butter substituteMargarinShorteningOther specialty fats1.2.3.4.5.6.7.8Specialty fats(coco butter substitute)TocopherolBetacarotenOrganic acids and alcohol from waste of palm oil industry1.2.3.4.Specialty fats of food additivesOleochemical IndustryVegetable fatty a
236、cidsFatty alcoholsFatty aminesMethyl ester sulfonate(biosurfactant)Biolubricant(rolling oil)Glycerin based chemicals Essential oilIsopropyl palmitate(IPP)and Isopropyl Myristate(IPM)Stearic acid1.2.3.4.5.6.7.8.9.Methyl estersBio-plastic based on waste of palm oil industry Essential oil1.2.3.4.Methyl
237、 estersPalm oil derived polymersEssential oil1.2.3.Indonesia at A Glance47Biodiesel(Fatty Acid Methyl Ester/FAME)Bioavtur(Bio jet fuel)NoPriority IndustryTypes of IndustryChemurgy Industry-20242025-20351.2.BiodieselBioethanolBioavtur(Bio jet fuel)Biogas from palm oil mill effluent(POME)
238、Biomaterials for medical devices,lignin-based aromatic building blocks for drug/pharmaceutical synthesisBioethanol made from lignocellulosic and biomass waste1.2.3.4.5.6.Biodiesel(Fatty Acid Methyl Ester/FAME)Bioavtur(Bio jet fuel)Nano cellulose derivativesBio-based fibers and polymers(carbon fiber,
239、viscous)New generation of bio-based compositesSecondary biofuel(bioethanol),bioethanol(based on lignocellulosic),secondary biofuel(biomass pyrolysis-gasification)1.2.3.4.5.6.Wood-based components(wood working,laminate and finger joints)Wood Goods IndustryBamboo fiber for textilesVarious products bas
240、ed on wood industrial waste1.2.Wood moulding productsPulp and various paper goods that are produced in an environmentally friendly mannerPulp and Paper IndustryLong fiberDissolving pulp1.2.Microbial cellulose fiberFeed IndustryAnimal feed rations and supplements and aquacultureIndonesia at A Glance4
241、8NoPriority IndustryTypes of IndustryBase Metal and Non-Metal Mineral Materials Industry9.-20242025-2035Iron ore pelletsLumpsFinesSponge ironPig iron and cast ironNickel Pig IronFerronickelFerrous alloy Steel for special purposes(among other things for health,defence,automotive)Basic Ir
242、on and Steel Processing and Refining Industry1.2.3.4.5.6.7.8.9.Slabs,billets,bloomsHot Rolled Coils(HRC),Hot Rolled Plates(HRP),Cold Rolled Coils(CRC),Wire rodsProfiles,bars,wiresFerrous alloy(ferro alloy)Stainless steel(stainless steel long and flat products)Steel for special purposes(among other t
243、hings for health,defense,automotive)1.2.3.4.5.6.Seamless pipesFerrous alloy(ferro alloy)Decorative stainless steelSteel for special purposes(among others:for health,defense,automotive)1.2.3.4.SGA Alumina(Smelter Grade Alumina)and CGA Alumina(Chemical Grade Alumina)Aluminum,aluminum alloy,billet,and
244、slabMatte nickelCopper cathodeCopper/Brass SheetNickel hydroxideFe Ni Sponge,Luppen Fe Ni,and Nuggets FeNi1.2.3.4.5.6.7.Aluminum and aluminum alloyMixed Hydroxide Precipitate(MHP),Mixed Sulfide Precipitate(MSP),Nickel MetalCopper alloy Copper/Brass Sheet1.2.3.4.Aluminum and advanced aluminum alloyNi
245、ckel Electrolytic,Nickel Sulfate,Nickel ChlorideCopper wire and electronic components1.2.3.Precious metalConcentrates of rare earth metalsPrecious Metals,Rare Earth,and Nuclear Fuel Industries1.2.Precious metal for decoration and jewelryRare earth metals1.2.Precious metals for electronic componentsR
246、are earth metals for electronic componentsEarth metal Nuclear fuel1.2.3.Non-Ferrous Metal Base Processing and Refining IndustryIndonesia at A Glance49NoPriority IndustryTypes of Industry-20242025-2035Oil-and-Coal Based Chemical Industries10.CementCeramicsGlass Pharmaceutical Grade glass
247、/glassRefractoriesZirconia,silicate zircon,zircon chemicalZircon OpacifierNon-Metal Mineral Industry1.2.3.4.5.6.7.CeramicsGlass/GlassRefractories1.2.3.Advanced ceramicsHigh quality Glass/decorative glass1.2.Carbon blackTerephthalic AcidAcetic AcidAcrylonitrileBis Phenol A1.2.3.4.5.CaprolactamCumeneP
248、ropylene GlycolEthylene GlycolPhenolFumaric AcidPtalic Anhydrous1.2.3.4.5.6.7.CaprolactamMethyl MethacrylateAcetic Acid1.2.3.Low-density polyethylene(LDPE)High-density polyethylene(HDPE)Polypropylene(PP)NylonPolyethylene terephthalate(PET)AcrylicPolyvinyl Chloride(PVC)1.2.3.4.5.6.Methyl Methacrylate
249、PolycarbonatePolyvinyl Alcohol1.2.3.LDPEHDPEPPNylonPETAcrylic1.2.3.4.5.6.Organic Chemical IndustrySingle fertilizer(nitrogen base)Compound fertilizer1.2.Single fertilizer(phosphate and potassium base)Compound fertilizer1.2.Single fertilizer(nitrogen,phosphate and potassium base)Compound fertilizer1.
250、2.Fertilizer IndustrySynthetic Resin and Plastic Material IndustryIndonesia at A Glance50NoPriority IndustryTypes of Industry-20242025-2035Butadiene Rubber(BR)Styrene Butadiene Rubber(SBR)Engineering natural rubber compound1.2.3.Isoprene Rubber(IR)Acrylonitrile Butadiene Rubber(ABR)Chlo
251、roprene Rubber(CR)Ethylene Propylene Diene Monomer(EPDM)Engineering natural rubber compoundAcrylonitrile ButadieneStyrene(ABS)1.2.3.4.5.6.SBRIRABRCREPDMEngineering natural rubber compound1.2.3.4.5.6.Natural and Synthetic Rubber IndustrySource:National Industrial Development Master Plan 201520358.PAY
252、MENT SYSTEMThe Payment System in Indonesia has undergone rapid progress in accordance with technological advances in the financial sector.Cash is getting less and less used.Indonesians have a wide variety of payment instruments to choose from,both for household retail transactions for daily payments
253、,as well as for large-scale corporate business transactions.There has been a shift in instruments from paper-based instruments,such as checks and bilyet giro,to card-based and electronic-based instruments.Card-Based Payment Instruments(Alat Pembayaran Menggunakan Kartu/APMK),cheques,bilyet giro,debi
254、t notes,as well as electronic money(card-based and server-based).Scope of non-cash payment systems are grouped into 2 types of transactions,namely large value transactions(wholesale)and retail transactions.Large value transactions have the characteristics of urgent and important transactions,includi
255、ng interbank transactions,financial market transactions or transactions with ticket sizes IDR 1 billion.The infrastructures that are used to process this transaction are the Bank Indonesia Real-Time Gross Settlement(BI-RTGS)and the Bank Indonesia Scripless Securities Settlement System(BI-SSSS).Meanw
256、hile,retail transactions shall include transactions between individuals with a ticket size value of IDR 1 billion with characteristics of small value and relatively high frequency.The infrastructure used for the processing of these transaction activities is the Bank Indonesia National Clearing Syste
257、m(Sistem Kliring Nasional Bank Indonesia/SKNBI).IDR 1 billionIDR1-5billionMicro BusinessSmall BusinessHas a business capital of more thanIDR5,000,000,000.00(five billionrupiahs)up to a maximum ofIDR10,000,000.00(ten billion rupiahs)excluding land and buildings forbusiness premises.IDR5-10billionHas
258、a business capital of more thanIDR10,000,000.00(ten billion rupiahs)excluding land and buildings forbusiness premises.IDR10billionMedium BusinessLarge BusinessInvestment Procedures64Specifically for whole scale trading activities,the amount of which is greater than IDR10,000,000,000(ten billion rupi
259、ahs)excluding land and buildings,is per 4(four)initial digits of the KBLI;Specifically for food and beverage service business activities,the amount is greater than IDR10,000,000,000(ten billion rupiahs)excluding land and buildings,is per 2(two)initial digits of the KBLI per one location point;Specif
260、ically for construction service business activities,the amount is greater than IDR10,000,000,000(ten billion rupiahs)excluding land and buildings in one activity,is per 4(four)initial digits of the KBLI;Specifically for industrial business activities that produce different types of products with 5(f
261、ive)different digits of the KBLI in 1(one)production line,is greater than IDR10,000,000,000(ten billion rupiahs)excluding land and buildings;orBusiness capital is defined as the owners equity and loan capital for business activities(Elucidation of Government Regulation No.7 Year 2021).Specifically f
262、or Foreign Investment business entities,based on Regulation of the BKPM Number 4 Year 2021,are included in the category of large-scale business and must follow the minimum investment value provisions,unless otherwise stipulated by laws and regulations.The investment value provisions for foreign inve
263、stment companies(Penanaman Modal Asing/PMA)shall be exempted for several business activities:Specifically for property development and enterprise activities,the following provisions shall apply:In the form of property taking the form of a building in its entirety or an integrated housing complex,pro
264、vided that the investment value is greater than IDR10,000,000,000(ten billion rupiahs)including land and buildings;orIn the form of unit property not in 1(one)building as a whole or in 1(one)integrated housing complex,the investment value is higher than IDR 10,000,000,000(ten billion rupiahs)excludi
265、ng land and buildings.Investment Procedures65Regulation of the BKPM No.4 Year 2021 stipulates that the minimum paid-up capital for PMA is at least IDR10,000,000,000(ten billion rupiahs),unless otherwise stipulated by laws and regulations.For example,the capital requirement for construction works und
266、er Government Regulation No.5 Year 2021 is a minimum of IDR25,000,000,000(twenty-five billion Rupiahs).Provisions on investment and capital values are exempted for representative offices and foreign business entities.b.Paid-Up Capital of Foreign Investment CompanyPrior to the enactment of the Job Cr
267、eation Law,there are regulations that mandated the divestment of shares from PMA business entities to Indonesian parties for certain sectors,one of the examples is in the mineral and coal mining business field under Law Number 3 Year 2020,it is mentioned that business entities that are holders of Mi
268、ning Business License(Izin Usaha Pertambangan/IUP)or Special Mining Business License(Izin Usaha Pertambangan Khusus/IUPK)during the Production Operation activity stage are required to divest 51%(fifty-one percent)of their shares in stages to the Central Government,Regional Governments,BUMN,regionall
269、y owned enterprises,and/or national private Business Entities.Furthermore,under Regulation of the BKPM No.4 Year 2021,the obligation to divest shares of PMA business entities still binds the parties and must be carried out in accordance with the predetermined period.The said divestment of shares may
270、 be conducted to individual Indonesian citizen or to PMDN(Penanaman Modal Dalam Negeri/PMDN)business entities through direct ownership in accordance with the agreement of the parties and/or the domestic capital market.Direct share ownership for Indonesian citizens(Warga Negara Indonesia/WNI)or PMDN
271、is set at a minimum of IDR10,000,000 for respective shareholder.Meanwhile,ownership in the domestic capital market is regulated in accordance with provisions of laws and regulations in the capital market.c.Divestment ObligationInvestment Procedures66The obligation to divest shares of PMA business en
272、tities shall be in accordance with the business field that is carried out based on a deed document which states the agreement of the parties regarding the implementation of the mandatory share divestment.However,this share divestment obligation may not be implemented if the prevailing provisions do
273、not require the share divestment and in the company deed document the shareholders agree on:The Indonesian party declares that they do not desire/demand the ownership of shares in accordance with the share divestment provisions which are set out in an approval letter and/or business license,for PMA
274、business entities which 100%of the shares are not owned by foreigners;orThe shareholders declare that they have no commitment/agreement with any Indonesian party to sell their shares,for PMA business entities which are 100%owned by foreigners.However,if there are Indonesian parties that demand the i
275、mplementation of the said divestment obligation in the future,then the shareholders/business entities must be held accountable.12The abovementioned shareholder agreement must be submitted to the BKPM and the BKPM will subsequently evaluate and assess the relevant shareholder agreement.Evaluation and
276、 assessment results may be approved or rejected.If approved,the BKPM will declare the divestment obligation is null and if rejected,the BKPM will issue an explanation letter and rejection letter.After the share divestment deed has been approved by the Minister of Law and Human Rights,the Indonesian
277、parties who already own the shares may resell them to Indonesian individuals/foreign individuals/foreign business entities/Indonesian business entities/foreign business entities while still observing the relevant laws and regulations.Once the implementation has been conducted and ratified by the Min
278、istry of Law and Human Rights,business actors are required to make changes to the data in the OSS system.2.2.Categories of Business Scale and Business Actors The following is a breakdown of business scale categories and business actors.It can be seen that for the existing foreign ownership is only p
279、ossible in the category of Non-Micro-Small Enterprises(Non-UMK).Investment Procedures67NIBMicro-,Small-Scale Business(Usaha Mikro Kecil/UMK)Non Micro-,Small-Scale Business(Non Usaha Mikro Kecil/Non-UMK)IndividualsBusiness Entities:Individual Company(Specifically for Individual Company is a company t
280、hat is only possible to be established by Indonesian Citizens)Limited Liability Company Union or partnership Foundation Limited Partnership Commercial Partnership(Firma)Civil partnership Cooperatives Public companies Other legal entities1.2.IndividualsBusiness Entities:Limited Liability Company Unio
281、n or partnership Foundation Limited Partnership Commercial Partnership Civil Partnership Cooperatives Public companies Other legal entitiesRepresentative Offices shall consist of:Foreign Company Representative Office (Kantor Perwakilan Perusahaan Asing/KPPA)Representative Office of Foreign Trade Com
282、pany(Kantor Perwakilan Perusahaan Perdagangan Asing/KP3A)Representative Office of Foreign Electricity Support Service Company (Kantor Perwakilan Perusahaan Asing Jasa Penunjang Tenaga Listrik Asing/KPPA JPTLA)Representative Office of Foreign Construction Service Business Entity (Badan Usaha Jasa Kon
283、struksi Asing/BUJKA)Trade Representative Office of Foreign Company of Trading through Electronic Systems(Kantor Perwakilan Perdagangan Perusahaan Asing untuk Perdagangan Melalui Sistem Elektronik/KP3APMSE)Foreign business entities shall comprise:Franchisors Futures trading Foreign Electronic System
284、Organizer (PSE)1.2.3.4.Investment Procedures682.3 Explanation of Non-Micro Small Business2.4 Investment LimitationCurrently,all business fields that are commercial in nature are open for investment except for business fields that are declared closed for investment or business fields that can only be
285、 carried out by the central government which are of a service nature or in the context of defense and security which are strategic in nature and cannot be carried out or cooperated with other parties.I.Open business fields shall consist of:In principle,all business fields are open to Investment,exce
286、pt for business activities which are specifically regulated under Presidential Regulation Number 10 Year 2021 on Investment Business Fields and Presidential Regulation Number 49 Year 2021 on the Amendment to Presidential Regulation Number 10 Year 2021,it is mentioned that all business fields are ope
287、n for investment activities except:Investments which are undertaken by individuals shall be categorized as PMDN,therefore only Indonesian Citizens may undertake this investment.a.IndividualsInvestments carried out by business entities,both legal entities and non-legal entities established within the
288、 territory of the territory of Republic of Indonesia,shall be categorized as PMDN or PMA.b.Business EntitiesForeign business entities are foreign business entities established outside the territory of the territory of Republic of Indonesia and conducting business and/or activities in certain sectors
289、.d.Foreign Business EntitiesRepresentative offices are Indonesian individuals or foreign individuals,or business entities which are representatives of foreign business actors with the approval of the establishment of offices in the territory of the territory of Republic of Indonesia.Representative o
290、ffices are non-investment activities.There is no regulation of capital or investment value for representative offices.c.Representative Offices Business fields which are declared closed for investment Business fields for activities which may only be undertaken by the Central GovernmentInvestment Proc
291、edures69For business fields which are open to investment(foreign investment and domestic investment)shall consist of:1.Prioritized business fields,are business fields that meet the following criteria:Investors who invest in the list of priority business fields will be granted fiscal incentives and/o
292、r non-fiscal incentives.Fiscal incentives that are granted by the government shall encompass:Tax incentives and customs incentives.Meanwhile,for non-fiscal incentives shall cover ease of doing business,the provision of supporting infrastructure,the guarantee of the availability of raw materials,immi
293、gration shall include:recommendation to transfer the status of a visitor permit to a limited stay permit and recommendation to transfer the status of a limited stay permit to a permanent stay permit,employment and other facilities in accordance with provisions laws and regulations.National strategic
294、 programs/projectsCapital-intensiveLabor-intensiveHigh-techIndustry pioneersExport-orientedOrientation in research,development and innovation activitiesTax incentives in the form of:Exemption of import duty on the import of machinery as well as goods and materials for the construction or development
295、 of industries in the framework of investment facilities.Customs incentives in the form of:Income tax for investment in certain business fields and/or certain regions(tax allowance)Deductions of corporate income tax(tax holidays)Investment allowance in the form of deduction of corporate income tax a
296、nd deduction of net income for new investment or business expansion in certain business fields which are considered as labor-intensive industries,as well as gross income deduction for the organization of work practices,apprenticeships and/or learning activities in relation to the development of huma
297、n resources based on certain competencyInvestment Procedures702.Allocated business fields or partnersips with cooperatives and Micro-Scale Business shall consist of:3.Business fields with certain requirements are business fields that can be operated by all investors,including cooperatives and UMKM w
298、hich meet the following requirements:4.Business fields which are eligible to be operated by all investors are business fields which are not included in numbers 1,2,3 above.NIBBusiness fields allocated forcooperatives and Micro-Scale BusinessBusiness fields open to large business inpartnership with c
299、ooperativesand Micro-Scale BusinessMust meet the following criteria:Business activities that do not use technology or that use simple technologiesBusiness activities that have specific processes,are labor-intensive,as well as have a special cultural heritage and are hereditary and/orThe operating ca
300、pital of the business does not exceed IDR10,000,000,000(ten billion rupiahs)excluding the value of land and buildingsa.b.c.Must meet the following criteria:Business fields which are mostly operated by Cooperatives and UMKM and/orBusiness fields that are encouraged to be included in large business su
301、pply chaina.b.Investment requirements for domestic investors.(These requirements may include requirements regarding investment values,permitted business fields for certain business entities,and business fields which require paid-up capital/certain assets).Requirements for investment with restriction
302、s on foreign capital ownership,however,this requirement does not apply to:Restrictions on the ownership of foreign capital shall also apply to companies that receive merger,acquisition or new companies resulting from a consolidation in accordance with provisions of laws and regulations in the same b
303、usiness field.Requirements for investment with special licenseOther investment requirements namely business fields which are strictly limited and supervised in separate laws and regulations in the control and supervision of alcoholic beverages.These business fields shall encompass:a.b.c.d.Approved i
304、nvestments in certain business fields prior to President Regulation No.10 Year 2021 was promulgated Investments which acquire special rights based on an agreement between Indonesia and the country of origin of the investors,unless the provisions under President Regulation No.10 Year 2021 are more pr
305、ofitable for InvestmentsWholesale of alcoholic beverages(importer,distributor and sub distributor)(KBLI 46333)Retail of alcoholic beverages(KBLI 47221);andStreet retail trade of alcoholic beverages(KBLI 47826)Investment Procedures71II.Business fields which are closed to investment This business fiel
306、d is a business field that cannot be carried out by both domestic investors and foreign investors.Business fields which are closed to investment based on Law No.25 Year 2007 on investment are as follows:III.Special Business Fields(Single Purpose dan Single Majority)Special business fields are certai
307、n business fields which based on the regulation on said business field cannot be merged with other business fields.Several business fields which are categorized as Single Purpose are hospitals,shipping,services related to water transportation,private broadcasting institutions,subscription broadcasti
308、ng institutions,transportation management services,warehousing and other storage.Meanwhile,Single Majority is the ownership of domestic(national)capital must remain greater than the overall owner of foreign capital,for example,Single Majority business field is Air Transportation for other passengers
309、(KBLI 51109)with foreign capital of a maximum of 49%.Cultivation and industry of class I narcotics;Any form of gambling and/or casino;Catching of fish species listed under Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora(CITES);Utilization or retrieva
310、l of coral and utilization or extraction of corals from nature which are used for building materials/lime/calcium,aquariums and souvenirs/jewelry,as well as live or dead corals from nature;Chemical weapons manufacturing industry;andIndustrial chemical substances and industrial substances which destr
311、oy the ozone layer industries.Investment Procedures72Provisions for Technology-Based Start-Ups2.5 Forms of Foreign Business in IndonesiaForeign Investment(PMA)is an activity of investing to conduct business in the territory of the Republic of Indonesia which is carried out by foreign investors,both
312、foreign individuals,foreign business entities and/or foreign governments that fully utilize foreign capital or joint ventures with investors in the country.a.Foreign Investment Company Based on Regulation of BKPM No.4 Year 2021,Representative Offices of Foreign Companies(KPPA)are Indonesian individu
313、als or foreign individuals or business entities which are representatives of foreign business actors with the approval of the establishment of offices in the territory of Republic of Indonesia and the following restrictions shall apply:The head of representative of a foreign company must reside in I
314、ndonesia,shall be fully responsible for the expediency of the office and is not allowed to conduct activities other than the representative activities of the foreign company and does not have any concurrent position as the head of a company and/or more than 1(one)representatives of foreign company.I
315、f the appointed head of the representative of a foreign company is a foreign citizen(WNA)and/or also employs foreign workers,then the representative of a foreign company must employ Indonesian workers.Risk-based business licensing for representative offices of foreign companies is included in the lo
316、w-risk level and is valid as long as the representative offices of foreign companies carry out activities.b.Representative Offices of Foreign Companies (Kantor Perwakilan Perusahaan Asing/KPPA)As supervisor,liaison,coordinator,and take care of the interests of the company or its affiliated companies
317、;Prepare the establishment and business development of PMA companies in Indonesia or other countries and Indonesia;Located in an office building in the capital of a provinceMust not seek any income from sources in Indonesia,including not engaging in any activities or engaging in any engagements/tran
318、sactions relating to the sale and purchase of commercial goods or services with domestic companies or individuals;andMust not participate in any form in the management of any company,subsidiary or branch of a company in Indonesia.a.b.c.d.e.Foreign investment activities located within Special Economi
319、c Zones(KEK)which engage in technology-based pioneering businesses may undertake investments with an investment value equal to or less than IDR10,000,000,000(ten billion rupiahs)excluding the value of land and buildings.*IDR10billion*Regulation of the BKPM Number 4 Year 2021 Article 49-Paragraph 9-L
320、etter bInvestment Procedures73Introduce,promote and advance the marketing of goods produced by foreign companies or by associations of foreign companies which appoint them,as well as to provide information or instructions for the use and import of goods to domestic companies/users;Undertake market r
321、esearch and supervision of domestic sales in relation to the marketing of goods from foreign companies or jointly appointed foreign companies;Conduct market research for goods required by foreign companiesClose contracts for and on behalf of the appointing companies with domestic companies for expor
322、t purposes.Representative Offices of Foreign Trade Companies(KP3A)is as described in Regulation of the Minister of Trade of the Republic of Indonesia No.10/M-DAG/PER/3/2006 is a representative of foreign trade company which may perform the following activities:Representatives of foreign trade compan
323、ies are prohibited from engaging in trade and sales transactions,whether submitting tenders,signing contracts,settling claims and the like.Representatives of Foreign Trade Companies in Indonesia may take the form of selling agents and/or manufacturers agents and/or buying agents.Foreign companies or
324、 joint ventures abroad may appoint Indonesian Citizens or Foreign Citizens as the head of the representative headquarters of a foreign trade company or the head of a branch office of a representative of a foreign trade company in Indonesia.Representative offices of foreign trade companies may be ope
325、ned in the Capitals of provinces and regencies/cities throughout the territory of the Republic of Indonesia,while branch offices for representatives of foreign trade companies may be opened in the capitals of provinces and regencies/cities throughout the territory of the Republic of Indonesia outsid
326、e of the domicile of their head offices.Every representative of a foreign trade company that employs 1(one)foreign citizen must employ at least 3(three)experts and/or an administrative worker for Indonesian citizens.If a KP3A has arranged for licensing through the OSS RBA,then the KP3A will obtain a
327、n NIB and a Trade Business Permit for Representatives of Foreign Trading Company(Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing/SIUP3A).c.Representative Offices of Foreign Trade Companies(KP3A)Investment Procedures74Representative Office of Foreign Electricity Support Service Company is a
328、foreign representative office established by business entities or individuals of foreign electricity support services as regulated in Government Regulation No.25 Year 2021.Business licensing for foreign electricity support services shall be granted for the following types of businesses:Applications
329、for business licensing of electricity support services for foreign representa-tive offices shall be subject to administration fees in accordance with provisions of laws and regulations in the sector of non-tax state revenue.Foreign representative offices for the JPTL are only permitted to undertake
330、high-cost electrical power support services in the form of:Specifically for the use of foreign workers,guidance and supervision shall be carried out by the Minister or governor(in accordance with their authority).Foreign representative offices of electricity supporting services are required to obtai
331、n a business license for business activity of supporting electricity services if they do not have the business license then they will be subject to a fine of 20%(twenty percent)of all contract values.Meanwhile,foreign Engineering personnels who do not have a certificate of competence in the electric
332、ity sector will be subject to a fine amounting to:Other obligations for foreign representative offices for electricity support services are:d.Representative Offices of Foreign Electricity Support Service Companies(JPTLA)Consultancy in the field of Electricity InstallationConstruction and installatio
333、n of Electricity Installation;andMaintenance of Electrical Installationsa.b.c.Construction work and installation of electrical power with a minimum value of IDR100,000,000,000(one hundred billion rupiahs);andConsultancy work in the field of electricity installations or maintenance of electrical installations shall be at least Rp10,000,000,000(ten billion rupiahs).a.b.Possess large qualificatio