To facilitate investment in these zones, the Widodo administration has instituted a number of incentives targeting investors setting up within SEZs. Outlined within Package 6 of the administration’s reforms, foreign investors operating in Indonesia’s SEZs stand to gain from several preferential policies if they meet funding requirements. Incentives include income tax reductions from 20-100 percent for up to 25 years, VAT exemptions on the import of raw materials, and VAT exemptions on manufactured goods sold within Indonesia. Additionally, land rights can be obtained for up to 30 years and further extended by 10 additional years.
Despite the generous tax holidays offered by the Indonesian government, it is not always advisable to invest in an SEZ rather than another location. One of the primary goals of SEZs is to develop Indonesia’s rural and less industrialized regions, meaning that infrastructure in these areas may be poor – including unreliable power supplies – and skilled labor difficult to find.
Choosing the optimal location for investment
As mentioned above, a number of factors all play a role in determining the optimal location for manufacturing in Indonesia. Understanding that industrial parks and SEZs are an integral solution to mitigating the costs of lagging infrastructure, the following map above highlights relevant industrial parks and SEZs throughout Indonesia. For more information on opportunities within specific zones, please contact firstname.lastname@example.org
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Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
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