Vol 2/2020 iOutlook iHealth iKnow The Omnibus Law Taking Care of A Blessing on Job Creation Healthcare in Disguise

UNLOCKING INVESTMENT POTENTIALS Batang Integrated Industrial Estate SMARTSMART ANDAND SUSTAINABLESUSTAINABLE Batang Integrated Industrial Estate will be one of the largest industrial cities in Central Java. Nestled on a 4,300 hectare plot, it is designed as a smart and sustainable area. The development concept has three basic principles: smart society, smart environment and infrastructure, and smart economy. It also uses two design innovations: smart experience and smart planning.

Batang Integrated Industrial Estate

Asia future gateway to Strategic location Supporting integrated global market in Indonesia infrastructure

Why Choose Batang Calling for Investors

Integrated Industrial Complete utilities Estate? Batang Integrated Industrial Estate is fully supported by the Great potential labor and Indonesian government. competitive wage Investors can simply come to Batang, bring the technology and Full government support in one stop invest in industry. The solution government will take care of all the licenses.

Competitive land price. iWORDS

Dear Investors, realization was Rp611.6 trillion, on track to meet the year’s target of At a time when looking after our Rp817.2 trillion. health has become more critical, we have taken adaptive measures At the policy level, the to ensure Indonesia’s economy Omnibus Job Creation Law slowly bounces back under was enacted this year, health protocol requirements. with one of its aims is to The COVID-19 global pandemic attract more investment undoubtedly has hit the to Indonesia. Among Indonesian economy, but our the 10 clusters in government has responded well the law, it stipulates enough. measures to improve the ease of doing We have continuously been doing business here, such as our best to assist our investors. by simplifying licensing A special task force was set up process. By improving to identify potential investors, the country’s investment and negotiate and facilitate their climate, the law is expected business relocations to Indonesia. to eventually create vast We also visited companies in job opportunities for the Central Java and West Java to Indonesian people. encourage their managements to apply the health protocols, and We have been actively proposed assistance should their communicating updates businesses hit obstacles. on investment-related regulations and measures Solid and quick coordination to our investors all over the among Indonesian government world, as well as following up institutions has brought back on their investment plans. We investor trust, as seen in the believe these strategies will investment realization during quicken the pace of the recovery the third quarter of the year. As of our economy for the benefit of September 2020, investment of all Indonesians. 

Bahlil Lahadalia

Chairman of Indonesia’s Investment Coordinating Board (BKPM)

Magazine | 3 iCONTENTS

iWORDS iOUTLOOK

The Omnibus Law on 03 18 Job Creation 10 clusters a guide for measures to better Indonesia’s economy. Message from The Chairman We have continuously been doing our best to assist our investors. A special task force was set up to identify potential investors, and negotiate and facilitate their business relocations to Indonesia.

iTALK 22 Reconfiguring Strategies iMOMENTS Let us dig deep on key BKPM quick 06 Smooth Collaboration responses to the COVID-19 pandemic. 07 Steps to Success 08 Welcoming New Partners iHEALTH 09 Standing Tall, Staying Strong 26 10 The Fine Refinery 11 Stronger Together 12 Hoanyoung Hamnida! *(Welcome) 13 The Nearest, The Largest 14 Strengthening Friendship Taking Care of Healthcare 15 Encouraging More Indonesia’s pharmaceutical industry gains momentum as Investment COVID-19 disrupts global chain.

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iMANUFACTURING 42 iTOURISM More Than Airplanes Seven infrastructure projects to help airline industry take off.

46 iEVENT Pictures Speak Louder Than Words BKPM challenges photo enthusiasts to capture 30 investment spirit. iCALENDAR Think Manufacturing 50 Event Calendar 2020 Indonesia to boost manufacturing industry to gain Indonesian Investment top 10 largest economy status. Coordinating Board.

52 iHIGHLIGHT iBUILD 34 iENERGY 38 Let’s Go East Optimizing potential outside Clean and Green Java. Indonesia throws support behind crude palm oil role in iKNOW biofuel energy. 56 A Blessing in Disguise Special task force set up for investment relocation.

Lucky Number 6 58 iACTUAL Indonesia working on Minding Taxes infrastructure projects to spur BKPM given greater authority economic growth. on tax allowances via OSS.

Consultant : Published by Directorate of Exhibition and Promotion Media, BKPM

Editor’s address Badan Koordinasi Penanaman Modal (BKPM) Jl. Jend. Gatot Subroto No. 44, Jakarta E-mail: 12190 P.O. Box 3186, Indonesia [email protected] Scan to download

Magazine | 5 iMOMENTS

Smooth Collaboration across 324 projects. IA-CEPA aims to spur economic growth BKPM expects IA-CEPA partnership to push for both countries during the investment amid COVID-19 pandemic. pandemic recovery phase.

To increase investment N JUNE 4, a virtual to be equally spread throughout realization, BKPM is stressing discussion titled Indonesia. It will also open the importance of the O“Indonesia-Australia opportunities for business players optimization of digital Comprehensive Economic in the regions to work with technology such as video Partnership (IA-CEPA) Amidst Australian investors in Indonesia. conferences to approach COVID-19” was held by the foreign investors and Indonesia Investment Promotion Education is one of the main coordinate with ministries/ Centre (IIPC) Sydney, the sectors for investment within the institutions on issues related to Embassy of the Republic of context of IA-CEPA, as Australia company licenses. Indonesia in Canberra and the sees the need for Indonesia to Australia-Indonesia Business develop its human resources. On March 4, 2019, the trade Council (AIBC). Some 241 Several Australian universities ministers of Indonesia and participants from both countries are also reported to have started Australia signed the IA-CEPA attended the event, one month expansion plans to Indonesia. agreement, which encompasses before the IA-CEPA took effect cooperation on trade of goods on July 5. Indonesia recorded positive and services, investment, investment realization in the e-commerce, competition The Investment Coordinating first quarter of 2020 despite policy, economic partnerships, Board (BKPM) expects the the pandemic, with Australia institution management and agreement to drive investment investing $86 million spread framework. 

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Steps to Success Central Java’s investment climate to return to normal as COVID-19 lockdown concludes.

KPM CHAIRMAN normal,” he said. Bahlil Lahadalia has Bvisited several factories He added that the enactment in Central Java to ensure the of large-scale social restrictions province, including Pekalongan, province’s investment climate had caused investment Kendal and Semarang. during the new normal. realization in the regions to stall. “We observed that investment The government is also Bahlil examined business activities have been returning encouraging the development activities in Brebes Industrial to normal. Construction work in of Batang Integrated Industrial Park, PT Perkebunan Nusantara the field has been going well,” Estate (KIT) as an investment IX Batang plantation and steam- he said. relocation destination for fueled power plants (PLTU) foreign investors. Batang on June 6 and 7, 2020. Bahlil specifically checked He also collaborated with the health protocol applications Central Java has a conducive Batang Regency Government at PLTU Batang, an investment climate and competitive regarding industrial worth Rp60 trillion. The power investment values that make development and investment in plant will assist state-owned it attractive for investors. It the area. electricity firm PLN to add 5.7% recorded Rp19.3 trillion in to the Java-Bali power supply. domestic direct investment and “We would like to make sure in It is also expected to supply Rp4.7 trillion in foreign direct this era of the new normal that power to several rapidly- investment, and ranked 4th investment activities return to growing industrial areas in the during first quarter of 2020. 

Magazine | 7 iMOMENTS Welcoming New Partners Seven foreign investors to relocate to Indonesia.

NDONESIA has attracted the investment relocation. “I doors of the companies one by seven foreign companies to am happy there are seven one to ensure Indonesia is the Irelocate their investments companies that will invest. Next, best location for their factories. here. This is a major 17 potential investments worth Fortunately, the initial steps accomplishment after intensive $37 billion need to be worked produced positive results,” negotiation and facilitation by on,” he said during a visit to Bahlil said. BKPM. Batang Integrated Industrial Area in Central Java, on June 30. The seven companies are from The seven companies previously the US, Japan, Taiwan, and conducted their businesses in BKPM Chairman Bahlil South Korea. In addition, one of China, Japan, Taiwan, Thailand, Lahadalia said his office had among 17 potential investors Malaysia and South Korea. Total set up a special task force for plans to invest $9.8 billion in investment from the companies investment relocation. The Indonesia.  is worth $850 million (Rp11.9 team facilitated the licenses trillion), and will employ up to of the seven companies, 30,000 workers. from ministries/institutions to regional administrations. President Joko Widodo said he appreciated those who had “The process was very intensive. approached and facilitated We directly knocked on the

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PT Asahimas is a Japanese STANDING TALL, firm that is a leading global glass producer. It has provided STAYING STRONG $254 million in investment, and employs 3,000 Indonesians. BKPM urges mutual West Java on July 21. cooperation to Bahlil said he appreciated prevent layoffs. He added that BKPM would that the two companies partner with the central remained operational during government, regional the pandemic, contributing to administrations, and the government efforts to normalize Capital Investment and One- the national economy. KPM CHAIRMAN Stop Service at provincial and Bahlil Lahadalia has regional levels to find solutions. “Despite the tough situation, Bencouraged the country’s we do not expel any workers. business owners to consult with Bahlil visited PT Taekwang This is thanks to our business his office on solutions to avoid Industrial Indonesia (TKII) management that always potential layoffs due to the in Subang Regency and PT prioritizes mutual growth COVID-19 pandemic. Asahimas Flat Glass Tbk in between the company and Karawang Regency, West Java. the surrounding society,” TKII “There must not be any TKII is a South Korean footwear President Director Lee Young employee dismissals. If company that has been Suk said. companies find it hard to operating since November resume operations, let’s talk. We 9, 2011. It has invested $160 Bahlil also reminded the will seek the solution,” he said million and employed 25,000 companies’ management to during a visit to two factories in Indonesian workers. comply with health protocols. 

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THE FINE REFINERY

BKPM Chairman visits East Kalimantan’s strategic refinery project.

KPM CHAIRMAN Bahlil Economic Recovery Program problems related to the project Lahadalia has checked (PEN) to absorb workers during occur. We need to collaborate Bthe development of the the pandemic. in transparent ways,” he said. Refinery Development Master Plan (RDMP) Project Unit V, set Upon completion, the refinery The government regulates up to support the country’s will increase oil production to TKDN through Government efforts to achieve energy 360,000 barrels per day from Regulation Number 29 resilience and independence. the current 260,000 barrels per Year 2018 on Industrial Bahlil visited the project in day. It will add refinery capacity, Empowerment. The TKDN Balikpapan and Lawe-Lawe, improve product quality to Euro of this RDMP megaproject is East Kalimantan on August 28, V standard and lower the fuel targeted at 30-70%. For the 2020. The project has been 19% production base price. Balikpapan and Lawe-Lawe completed and is scheduled to project, the target is 30-35% in finish by 2023. During the visit, Bahlil 2023. emphasized local content The US$6.5 billion project is a requirement (TKDN) rules for BKPM also encourages the National Strategic Project and setting up the refinery project. involvement of qualified the largest from the country’s local MSMEs or national state-owned gas and oil “BKPM wishes the TKDN rules entrepreneurs so local company, PT Pertamina Tbk. to be implemented. BKPM will communities can benefit from It is also a part of the National stand on the front line should such projects. 

10 | Magazine iMOMENTS STRONGER TOGETHER Cooperatives and SME ministry sign deal on program synergy with BKPM.

investors. BKPM will provide data on investor profiles, both local and foreign, who have worked with MSMEs and cooperatives. BKPM will also provide data on SME business permits published via the Online Single Submission (OSS) system.

The MoU also regulates partnership facilitation, including matchmaking activities such as seminars, market soundings, business forums and mission visits. The synergy also includes consultation and assistance in the preparation of individual or collective partnership agreements, particularly in the aspects of financing, technology and legality. Both institutions are committed to providing capacity building regarding investment regulation and licensing procedures, as well as business HE MINISTRY of signed the agreement by video management for MSMEs and Cooperatives and conference at their respective cooperatives. TSmall and Medium- offices on September 17, 2020. sized Enterprises (SMEs) Bahlil said the MoU formalized and the BKPM have inked a The MoU encompasses the long, well-executed Memorandum of Understanding data exchange, investment partnership between the (MoU) on program and policy partnership facilitation, and two institutions. It also allows synergy to develop micro, small capacity building for MSMEs. MSMEs to play a bigger and medium-sized enterprises To improve partnerships role in the nation’s economy (MSMEs) and cooperatives. between investors and local through simplified licensing entrepreneurs, the cooperatives procedures, partnerships with Cooperatives and SMEs minister and SMEs ministry will provide foreign and domestic investors, Teten Masduki and BKPM data on potential MSMEs and and opportunities to develop Chairman Bahlil Lahadalia cooperatives to work with entrepreneurship. 

Magazine | 11 iMOMENTS Hoanyoung

Indonesia pursues Hamnida! South Korea investment in electric vehicle downstream *(Welcome) industry.

KPM CHAIRMAN Bahlil Lahadalia and state- Bowned enterprises minister Erick Thohir visited South Korea in September, This year alone, 2020 to follow up on investment plans from the country’s South Korea investors, particularly for has increased Indonesia’s electric vehicle its investment downstream industry. realization to Bahlil said Korean company Indonesia. interest was a positive signal of Indonesia’s attractiveness as an investment destination despite the pandemic.

“So, we have to materialize this. As instructed by the president, we push investment realization that supports economic transformation with added value and labor-intensive ones. Indonesia needs to create job opportunities, and investment is the solution.”

Indonesia has been encouraging more investment Netherlands, with a total of invested $552.6 million, up from South Korea, a significant $7.7 billion. 340% from $130.4 million from economic partner. Since January to March 2020. During 2015, it has been Indonesia’s This year alone, South Korea the first semester of 2020, seventh largest investor after has increased its investment investment was $683.0 million, Singapore, Japan, China, realization to Indonesia. Between up 25% from $548.4 million in Hong Kong, Malaysia and the April and June 2020, companies the same period in 2019. 

12 | Magazine iMOMENTS The Nearest, The Largest BKPM Chairman encourages Singaporean investors to increase investments.

NDER THIS YEAR’S the two had contributed to the law aims to simplify business theme “Driving the high investment realization, permits, improve the investment URole of Industry 4.0 noting that by September this ecosystem, promote small and Towards Sustainable Investment year it was already higher than medium-sized enterprises and in Indonesia,” the Indonesia for the whole of 2019. cooperatives, and enhance Embassy in Singapore, the country’s ease of doing the Indonesia Investment “In December 2019, the total business rating. Coordinating Board (BKPM) foreign direct investment for and Bank Indonesia held the Singapore was $6.5 billion. As Indonesia Investment Day 3rd Indonesia Investment Day of September 2020, investment 2020 presented 11 provinces (IID), a webinar series which realization had already reached and more than 80 investment was conducted from August to $7.2 billion,” Bahlil said during a projects carefully curated from October 2020. IID webinar on October 27, 2020. fields such as infrastructure, agrobusiness and tourism, which In the past five years, Singapore He added that Indonesia has are ready to receive foreign has invested $46.4 billion, been upgrading and amending investment. These projects are making it the largest investor rules to support a better “ready to offer” as well as “clean in Indonesia, and from January investment climate for investors, and clear.” There has been a to September 2020, it invested both domestic and overseas. 30 percent increase in terms $6.2 billion here. BKPM The latest move is implementing of the number of participating Chairman Bahlil Lahadalia said the Omnibus Job Creation Law provinces and projects offered in the good relationship between passed in November 2020. The IID this year. 

Indonesia has been upgrading and amending rules to support a better investment climate for investors, both domestic and overseas.

Magazine | 13 iMOMENTS Strengthening Friendship climate that benefits the two Indonesia and South Korea exchange countries,” said Sun Yung-mo. investment ideas for mutual benefit. The top officials discussed efforts for improving the business climate for South Korean firms investing in Indonesia, including the Omnibus Job Creation Law designed for ease, speed, efficiency, and certainty in starting a business, as well as various aspects related to the investment climate.

In November 2019, the two countries inked a Comprehensive Economic Partnership Agreement (CEPA), which resembles a free trade agreement but covers wider economic collaboration. They are also working on efforts to HE GOVERNMENTS government will facilitate put the agreement into practice. of Indonesia and South South Korean investors for TKorea have agreed land and permit handling, so From January to September to preserve and improve incoming investors simply 2020, South Korea invested economic partnerships to need to prepare the capital and $683 million, mostly on mitigate the business impact technology. electricity, gas, and water due to COVID-19. BKPM ($228.4 million); chemicals Chairman Bahlil Lahadalia led “Indonesia needs to quicken the and pharmaceuticals ($148.4 Indonesian delegates to meet pace to transform its economy. million); and textiles ($60.8 with South Korea’s Minister of This is the momentum to build million).  Industry Sung Yun-Mo in Seoul industries that will create added on November 12. value. And South Korea is one of the strategic partners for Bahlil said the Indonesian Indonesia to materialize that government was working goal,” Bahlil said. intensively on increasing strategic and qualified “We think Indonesia is getting investment here. The better at setting up a business

14 | Magazine Magazine | 14 iMOMENTS Encouraging More Investment

BKPM chairman explains Omnibus Law on Job Creation to Netherlands businessmen.

NVESTMENT companies in the nutmeg, “There are some companies COORDINATING Board milk, pipe, and semiconductor that hope to enter Indonesia I(BKPM) Chairman Bahlil industries. soon. Some will improve their Lahadalia landed in Amsterdam production and expand their on November 18 to promote Ikmal said the companies had factories. These, of course, will the Omnibus Law on Job shown they were serious about serve as positive sentiment for Creation to Netherlands doing business in Indonesia, investment and job creation,” businessmen in a bid to boost and the Indonesian government he said. investment value. The high- wished to not only increase the level meetings were managed investment amount, but also The Netherlands was the first by the Indonesian Embassy diversify sources of investment. European country to make it in the Hague and Indonesia’s to the list of the 10 biggest Chamber of Commerce and The international firms investors in Indonesia between Industry. welcomed the implementation 2015 and September 2020, of Law No. 11 Year 2020, ranked number 6 with total BKPM Deputy Chairman for commonly known as the investment of $8.8 billion. Investment Promotion Ikmal Omnibus Law on Job Creation, It invested in electricity, Lukman said Bahlil met CEOs which signifies Indonesia’s gas, and water (35.1%); who expressed an interest in promising investment climate transportation, warehouses and investing in Indonesia. The despite the COVID-19 telecommunications (22.5%); CEOs represented multinational pandemic. and mining (17.3%). 

Magazine | 15 Q2 THE RISING ROLE OF DOMESTIC DIRECT INVESTMENT DDI SIGNIFICANTLY CONTRIBUTED TO TOTAL INVESTMENT REALIZATION UP TO THE END OF THE SECOND QUARTER OF 2020.

In this ongoing coronavirus pandemic, our DDI has been proven to be resilient and has created more jobs for Indonesian workers 51.4% Bahlil Lahadalia Investment realization in January-June 2020 was Rp402.6 trillion, of which domestic direct investment (DDI) contributed 51.4%. Rp91.9 trillion Q2 investment realization was Rp191.9 trillion Q2 Q2 FDI was FDI absorbed Rp97.6 117,798 trillion domestic In Q2 2020, employees DDI absorbed more local workers than foreign direct Q2 investment (FDI). Q2 DDI was DDI absorbed Rp94.3 145,311 trillion local workers Q3 A GROWING, MORE DISTRIBUTED INVESTMENT REALIZATION

INDONESIA’S INVESTMENT REALIZATION REBOUNDED IN Q3, AND A BIGGER REALIZATION OCCURRED OUTSIDE JAVA.

Investment realization outside Java was bigger at 52.8%, in line with 74.8% BKPM’s KPI to ensure Investment realization in the spread of quality January-September 2020 investment throughout was Rp611.6 trillion, Indonesia. 74.8% of the 2020 target.

Q3 investment Q3 investment realization outside realization was Java was Rp209.0 Rp110.4 trillion trillion

Q3 In Q3 2020, The trend of foreign investment in DDI was investment the third quarter increased. This is realization grew a positive signal that investors are Rp102.9 starting to believe in the policies trillion by 8.9% implemented by the government. compared to Q2. We are also glad to see investor expansion outside Java.

Bahlil Lahadalia Q3 Q3 FDI was investment realization Rp106.1 in Java was trillion Rp98.6 trillion iOUTLOOK The Omnibus Law on Job Creation 10 clusters a guide for measures INDONESIA’S PRESIDENT Joko to better Indonesia’s economy. Widodo signed the Omnibus Job Creation Law on November 2, 2020. The Omnibus Law is a breakthrough in the country’s legal system as it revises 76 current laws simultaneously. In 2019, the President said the government would require 50 years to revise the laws one by one.

“Through the Omnibus Law, simplification of regulations can be accelerated,” he said during the 2019 Bank Indonesia Annual Meeting in Jakarta, November 28, 2019.

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The Omnibus Law focuses on 10 clusters: simplification of business licensing, improvement of the investment ecosystem, employment, small and medium-sized enterprises and cooperatives, research and development and ease of doing business, taxation, economic zones and land acquisition, public administration, government investment and national strategic projects, and imposition of sanctions.

It consists of 186 articles and spur investment and create new people are working, purchasing 15 chapters, and will require jobs for locals. power will increase and propel the issue of more than 30 economic growth. government regulations and In 2019, around seven other implementing rules within million Indonesians were The Law has other important three months. unemployed, and each year, purposes, with the government about three million are looking hoping it will improve the GOALS OF THE OMNIBUS for employment. Add to that, investment climate and create LAW about seven million workers legal certainty. It aims to The Omnibus Law is aimed who have been affected by harmonize central and regional at realizing economic the COVID-19 pandemic, and policies, minimize and prevent competitiveness, transformation it’s clear why labor-intensive corruption, and protect and and democracy. In the near investment is much needed to facilitate small and medium-sized term, it is urgently needed to drive job opportunities. As more enterprises and cooperatives.

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CREATING A MORE laws, and has simpler policies approach. This is divided FAVORABLE INVESTMENT for investment requirements. into three types of risk: low, CLIMATE For example, it simplifies medium and high. There is Establishing a business-friendly land acquisition processes, also simplification for permits ecosystem is a key role for formalizes economic zones, and including spatial layout and accelerating economic growth. creates a land bank supervisory environmental and building Implementing the Omnibus authority. approval that are in line with the Law is expected to elevate the risk-based approach. country’s standing in the Ease of Within the improvement of Doing Business list to 53rd from the investment ecosystem and It removes the relevant currently 73rd. business activities cluster, the requirements and restrictions law stipulates the simplification for foreign investment that As such, the Omnibus Law of business licensing by were recently stipulated in laws simplifies and integrates the changing the license-based governing business sectors that basic licensing of a number of approach to a risk-based are amended by the Omnibus

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To attract more investment, will receive further facilitations the Omnibus Law lays out to make them the centers policies that cover value added of international trade traffic tax, income tax, local taxes, activities. and levies. For local taxes and levies, the Law states the roles BKPM’S READINESS IN of the government through IMPLEMENTING a fiscal policy setup related OMNIBUS LAW to the Regional Tax and Levy BKPM has taken steps to prepare Regulation. the implementation of the Omnibus Law. It has formed For value added tax and luxury an OSS - Risk Based Approach goods sales tax arrangements, (RBA) system development the Omnibus Law allows the team. The team has drawn up transfer of taxable goods (BKP) an Action Plan for OSS - RBA for capital to replace shares. system development consisting Domestic tax also doesn’t apply of six activities: identification of to foreigners who live more norms, standards, procedures than 183 days in Indonesia, and and criteria of business licensing Indonesians who stay more than (NSPK); evaluation of existing 183 days abroad are not subject OSS business processes; to foreign taxes. licensing standardization and system integration; OSS - RBA Stricter policies are applied system design and development; for general provisions and tax infrastructure and network procedures, with administrative development (hardware and sanctions for tax correction, software for OSS -RBA); and payment, or deposit. Interest monitoring, evaluation and compensation on the return supervision of business licensing. of tax overpayment is now The OSS - RBA plans to go live legally binding. The country’s two months after the Omnibus legal officers will terminate Job Creation Bill was issued. investigations of criminal Law. The government expects offenses related to taxation BKPM is optimistic that this will grant more freedom once the taxpayers pay all of following the enactment of to apply foreign investment their tax debt. the Omnibus Law, investment policies in those sectors. realization will be higher and Through the Omnibus Law, the three million jobs will be The Omnibus Law outlines the government also emphasizes generated next year. Priority List for business sectors the specific roles attached to that are greatly recommended special economic zones (KEK) “With the Omnibus Bill being for investment. It allows and free trade and free port passed as the Omnibus Job capital investment (including areas (KPBPB). It hopes the Creation Law, with some aspects foreign investment) except for special economic zones will promoting business activities, I investment in business lines drive economic growth, not am sure in 2021 our investment that are closed or those that only in the surrounding areas realization will be higher than can only be done by the central but also nationwide. There are 2020,” said BKPM Chairman government. 15 KEK and five KPBPB that Bahlil Lahadalia.

Magazine | 21 iTALK Reconfiguring Strategies

Let us dig deep on key BKPM quick responses to the COVID-19 pandemic.

THE COVID-19 pandemic has hit the world’s Medical Equipment Business Licensing process economy hard since early 2020, and Indonesia within just one day. The BKPM Command is no exception. But thanks to the Indonesian Centre was also established to help the team government’s quick responses, the negative monitor licensing requests in the Online Single impacts have been reduced to a minimum. Submission (OSS) system.

We invited Ikmal Lukman, Deputy Chairman for We are also fully committed to facilitating Investment Promotion from Indonesia’s Investment the needs of investors, while still prioritizing Coordinating Board (BKPM), for a Q&A session their health and safety. In-person consultation on the country’s strategies to cope with the services at our One-Stop Integrated Services pandemic. Ranging from successful investment (PTSP) Centre have been reopened with realization this year to the Omnibus Law on Job adherence to health protocols, such as limiting Creation, below are his insightful thoughts: numbers in queues and having separate queuing schedules. How have BKPM and Indonesia adjusted to the changes caused by COVID-19? As most visitors choose our online services A few weeks after the first reported case of to reach out to BKPM officers, we continue to COVID-19, the government started pouring optimize our websites www.bkpm.go.id and out stimulus packages, including relaxation of www.investindonesia.go.id, and maximize our income tax and value-added tax in 19 sectors. services through them. In mid-May 2020, President Joko Widodo issued Government Regulation 23 of 2020 on How have BKPM’s investment priorities and the implementation of the National Economic promotion strategies changed? Recovery (NER) program, which set out the COVID-19 has, without a doubt, had a profound latest stimulus policies to soften the economic impact on Indonesia’s economy. Nonetheless, impact caused by the pandemic. BKPM remains positive over its revised 2020 investment target of Rp817.2 trillion, or 92.2% In addition, BKPM has been responsive in of the initial target of Rp886.0 trillion. In the handling the pandemic. Seeing the urgency of third quarter of this year, investment realization the lack of availability of medical equipment to reached more than Rp600 trillion, nearly 75% of cope with the pandemic, BKPM accelerated the the revised target.

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Magazine | 23 iTALK

investment climate, the law is To deal with the pandemic, we devised expected to encourage more a 3+1 strategy - optimizing existing incoming investment, especially in labor-intensive industries, and investment realization, completing stalled eventually create more jobs. investment projects, promoting investment, The law stipulates the and building inward consolidations to simplification of business prepare for the post-COVID era. licensing by changing from a license-based approach to a risk-based approach. This is divided into To deal with the pandemic, be developed not only to boost three types we devised a 3+1 strategy - economic growth, but also as of risk: low, optimizing existing investment part of our efforts in mitigating middle, realization, completing stalled and coping up with possible investment projects, promoting outbreaks in the future. investment, and building inward consolidations to prepare for Other sectors proven to be the post-COVID era. We are growth engines, such as the also well prepared to seize automotive industry, renewable all opportunities during the energy, infrastructure and pandemic as we formed a mining, will create added value, special task force to facilitate while the electronics and food businesses relocating to industries will continue to be Indonesia. Some companies developed. We continue to are completing their relocation support both large and small process to Indonesia, while investments, as we believe they others are still in negotiations. will have a positive impact on job creation. We do need a lot of investment to create jobs. To attract more How will the Omnibus Law investment, we mapped on Job Creation draw more potential sectors which can investment? survive the turmoil, as well as The Omnibus Law on Job grow during the pandemic. Creation simplifies and revises With many local workers being 76 Indonesian laws. Creating laid off, we aim to develop and jobs is urgently needed to cope invite more investment in the with the rising number of yearly labor-intensive manufacturing additions to the workforce and and export-oriented the impact of COVID-19. manufacturing industries. Also, with growing demand in There are 10 clusters in the the health sector during the law, including simplification pandemic, we have found the of business licensing and needs of the pharmaceutical improvement of the investment and medical device industry are ecosystem. By simplifying also growing. This industry will regulations and improving the

24 | Magazine iTALK and high risk. There is also How will BKPM spread the business fields to partner with simplification for basic permits, benefits of FDI evenly across MSMEs. including spatial layout, different communities? environmental and building One of the strategies is to This cooperation is expected to approval, in line with the risk- improve the role of micro, small cause multiplier effects bringing based approach. and medium-sized enterprises benefits across communities, (MSMEs). Presidential as foreign direct investment Business sectors that are Regulation Number 44 of 2016 (FDI) provides many benefits priorities for investment will on the List of Business Fields for Indonesia as a host country. be put on the investment Closed or Conditionally Open This includes increasing the priority list, which will have less to Investment encourages amount of foreign capital and investment requirements. foreign investors in strategic employment, adding savings and income, raising the level of education and training, and enhancing research and development.

We hope the Omnibus Law on Job Creation will make it easier to achieve the government’s goals. With more investors coming into the country, we will see greater opportunities for cooperation, and this will generate well spread investment benefits for all Indonesians. 

Magazine | 25 iHEALTH

Taking Care of Healthcare

Indonesia’s pharmaceutical industry gains momentum as COVID-19 disrupts global chain.

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India supply 95% of the raw Kesehatan) at the beginning of pharmaceutical materials used 2014. by local firms. As of 2019, the JKN scheme Although interruption of the covered around 84% of the global supply chain caused population. As more people local pharmaceutical firms gain health services, the local to operate at an average of pharmaceutical industry grows 55%-60% in May, according significantly to meet demand to the Indonesia Chamber for medicine and healthcare of Commerce and Industry, treatment. this could also be seen as an opportunity for Indonesia. The sector’s investment portrait has been promising enough in The disruption of China’s the past five years. From 2015 to global drug supply role due to the second quarter of 2020, the COVID-19 has prompted global chemical and pharmaceutical manufacturers to consider sectors were included in the diversifying their supply chains list of the top 5 industries in away from China, with Southeast Indonesia. The industry gained Asia a popular alternative. Rp254.4 trillion or 17.9% of total investment, with the GROWING OPPORTUNITIES pharmaceutical sector alone FOR FOREIGN INVESTORS obtaining more than Rp26.3 The pharmaceutical sector has trillion. In the same period, seen significant growth since domestic direct investment the government introduced contributed slightly more than the universal healthcare foreign direct investment, and (Jaminan Kesehatan Nasional/ Sumatera and Java islands JKN) system and the National became the top investment Health Insurance Agency (BPJS locations for the industry.

THE INDONESIAN GOVERNMENT is reforming its pharmaceutical sector as the global pharmaceutical manufacturing chain is running slower due to the COVID-19 pandemic.

Indonesia’s healthcare system encompasses a pharmaceutical sector dominated by domestic firms, but the active pharmaceutical ingredient (API) market here highly depends on imported pharmaceutical ingredients. China and

Magazine | 27 iHEALTH

One of the government’s Investment Realization of Pharmaceutical priorities is to develop the Industry (2016-2020 Q2) domestic production of pharmaceutical raw materials. 8 A pharmaceutical raw material 7 sector is important as an 6 import substitution industry, 5 4 as the nation’s pharmaceutical 3 industry relies heavily on 2 imported materials. An analysis 1 in Attachment II of MOH 0 2016 2017 2018 2019 Q2 2020 Reg. 27/2017 notes that the Indonesian pharmaceutical PMDN 2.5 2.1 5.3 3.3 2.1 industry is short of local PMA 1.9 3.3 2.4 2.1 0.3 materials that meet quality Total 4.4 5.4 7.7 5.4 2.4 requirements. As a result, Investment realization from 2016-2020 Q2 was Rp25.3 trillion, with 60.3% 95% of raw materials used are dominated by DDI imported, with only 5% sourced from domestic producers. Top 5 Countries for Pharmaceutical Industry Investment

In 2016, the government Germany allowed 100% foreign $119.8 million ownership in pharmaceutical companies from previously 85%, enabling the firms to create formulation plants and API manufacturing facilities here. The government has requested the foreign firms partner with domestic players to promote a higher percentage of domestic production.

Local Content Regulation for Pharmaceutical Sector Japan Singapore To strengthen domestic $76 million $62.7 million pharmaceutical manufacturers South Korea Mauritius and decrease dependency $115.9 million $230.9 million on imported raw materials, the government issued Based on KLBI: 21 Presidential Directive No. 6 Source: BKPM 2020 of 2016 on the Acceleration of the Development of the No.16 of 2020 on Provisions and the components of and the Pharmaceutical and Medical Procedures for the Calculation method for calculating the local Equipment Industry. of Domestic Component content level for pharmaceutical Levels for Pharmaceutical finished goods and raw The Minister of Industry (MOI) Products (MOI Reg. 16/2020) materials (pharmaceutical also enacted MOI Regulation in May 2020. This outlines products). It also stipulates

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the procedure for obtaining Calculation of Local Content the calculation of total local a certificate showing the local for Pharmaceutical Products content. content level of these products. The local content of pharmaceutical products With these requirements, the These local content is calculated based on four hope is that investors will set up requirements are expected to components: raw material manufacturing plants in Indonesia ease the sector’s dependence content, and the research and to produce the materials and on imported products, and development, production, and process the products here. the MOI aims to increase the packaging processes. Each Existing pharmaceutical product overall use of local components component is further broken manufacturers should also expect in the pharmaceutical sector to down into sub-components to be required to comply with the approximately 20%. with different weight values for new local content requirements. 

Magazine | 29 iMANUFACTURING THINK MANUFACTURING Indonesia to boost manufacturing industry to gain top 10 largest economy status.

THE INDONESIAN as the country turns into a more GOVERNMENT is to revitalize service-based economy. the nation’s manufacturing sector as the focal point to The government expects becoming one of the world’s top reawakening the sector will 10 largest economies by 2030. produce 10 million new jobs as Indonesia reaps the democratic The manufacturing sector has bonus by 2030. Under the historically played a key role bonus, 30 million young in the country’s economic people will be looking for development. Up to 2016, jobs. If they are focused on the it contributed 20% to gross manufacturing sector, the sector domestic product and created will be able to drive net export more than 14 million new jobs. volume and see Indonesia as But, this will decrease by 2030 one of the world’s 10 largest without government intervention economies by 2030.

BKPM data shows investment in the manufacturing sector soared from Rp104.6 trillion in the first quarter of 2019 to Rp129.6 trillion during the first quarter of 2020, with a 23.9% growth rate. This has come as a surprise as it came during the COVID-19 pandemic. As the International Monetary Fund (IMF) has predicted Indonesia will experience economic growth of 8.2% in 2021, the expectation that investment in the manufacturing sector will

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keep on increasing remains industry associations, manufacturing sector: food large. and businessmen for 4IR and beverages (F&B), textiles formulation, and 4IR contains and garments, automotive, MAKING INDONESIA 4.0 clear directions for industries in chemicals, and electronics. In 2018, Indonesia’s Ministry a bid to strengthen the national These production areas of Industry introduced Making industrial structure. were chosen after evaluating Indonesia 4.0 as a guideline for economic impact and criteria implementing the strategy and The 4IR covers sophisticated on implementation capabilities, roadmap of the Fourth Industrial technologies such as artificial including investment value. Revolution (4IR), also known as intelligence (AI), the Internet The government will assess Industrial Revolution 4.0. of Things (IoT), wearables, each area’s strategy once innovative robots, and 3D every three or four years, The ministry worked with printing. The government then produce a report on the various stakeholders such as will focus on five areas progress and challenges for governmental institutions, of production under the each business line.

Magazine | 31 iMANUFACTURING

STRATEGIES FOR THE FIVE BUSINESS AREAS The F&B industry is projected to push the manufacturing sector thanks to abundant agricultural resources and high domestic demand. In 2016, it provided 29% of the overall manufacturing contribution of 24%, and absorbed 33% of the manufacturing industry’s workforce.

The government aims to make the national F&B industry a powerhouse in ASEAN, and there are several ways to achieve this. Cutting-edge technologies, such as automatic monitoring systems and autopilot drones, will take greater roles to drive productivity in the upstream phase. Agriculture and fisheries are two examples of activities at the upstream stage.

Assisting micro, small, and medium-sized enterprises (MSMEs) to adopt technology is crucial. MSMEs and farmers account for more than 80% of the F&B industry. The government will prioritize the increase of production volume and market share. Packaged foods will require added investment to fulfil local demand in the future. Exporting F&B products will be the next focus, with access to agricultural resources.

Improving exports will also be a government strategy for the textile and garment industry. The broad goal is the domestic textile and garment sector will become the leading functional clothing producer.

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In 2016, textiles and garments accounted for 7% of manufacturing’s overall GDP, 15% of manufacturing exports, and 20% of the manufacturing workforce. 4IR adoption will help improve upstream capability. Specifically, the focus will be on chemical fiber production and the low production cost of high quality clothing materials to beat off friendly and low-cost vehicles, To achieve this target, the global competition. and sport utility vehicles (SUV). government will encourage a petrochemical stock capacity Technology adoption will Building an ecosystem for setup for reducing imports. also apply to workers, and electric vehicles creates the Another strategy includes oil the government will transfer foundations for helping the and gas resource utilization for technology knowledge to industry grow sustainably. chemical industry creation at a increase their skills. This will The ecosystem will first competitive cost. match with the future of the stress electric motorcycle clothing industry, with shifting manufacturing development, The government will apply demand from basic clothing then move to electric vehicle a slightly different approach to functional clothing. The adoption-based power. for developing the national sector needs to quickly adopt electronics industry. The sector changes in both the domestic At the heart of the hugely depends on imported and global markets. manufacturing industry is the components, and local chemical production sector, production mostly focuses on a Electric vehicles are seen which provides products widely- simple assembly line. as the next big thing, so the used by other sectors, such as government is preparing electronics, pharmaceuticals, International investment will the automotive sector as and automotive. be needed to spur electronic a prominent player in the component assembly lines with internal combustion engine The government will reinforce added value. The government will and electric vehicle sectors. To the sector to create a solid prepare an attractive package for start off, the government will manufacturing foundation as attracting global investors, and utilize related technologies to a prerequisite for facing and will carry out intensive training increase production volume beating global competition. To and import foreign workers for and production efficiency of raw date, Indonesia mostly imports specific fields of work. Related materials and key components. raw chemical substances, but stakeholders from the industry The next step is establishing an plans to expand its capacity will receive proper training for integrated industrial zone and a and capability to become preparing the future innovation more efficient logistics platform. the next big exporter and and technology transfer. producer of special chemical The government will also materials. The source for this is These multi-layered strategies partner with global original the agricultural process, which are expected to transform equipment manufacturers is the key capital for making the economic lives of all (OEM) to add exports, mostly competitive biochemical Indonesians and eventually earn multi-purpose vehicles, eco- products. developed nation status. 

Magazine | 33 iBUILD

LUCKY NUMBER Indonesia working on infrastructure projects to6 spur economic growth. 34 | Magazine iBUILD The photo is not the actual object. The

SIX INFRASTRUCTURE the private sector. The projects and medium-sized enterprises PROJECTS are proceeding are included in the 2020 PPP (SMEs) to create equitable under the public-private Minister of National Planning growth and opportunities for partnership (PPP) mechanism to Decree. On April 30, 2020, the regional businesses. BKPM accelerate economic progress ministry held a sounding out of will support the public works in Indonesia. The developments the market, offering business ministry to promote the projects encompass toll roads and opportunities for private entities for successful development, bridges, with a total value of to be a bidder or financier of despite the COVID-19 Rp80.8 trillion. these projects. pandemic.

The Ministry of Public Works Investment Coordinating SEMANAN-BALARAJA TOLL and Housing is working on Board (BKPM) Chairman Bahlil ROAD the following projects: the Lahadalia said the importance Once it is completed, the Semanan-Balaraja toll road, of infrastructure development Semanan-Balaraja toll road Cikunir-Ulujami elevated toll is a pivotal indicator for will connect Semanan in West road, Sentul Selatan-Karawang economic growth, during a Jakarta to Balaraja in Banten, Barat toll road, Patimban toll video conference following and join six other toll roads access, Semarang Harbour toll the market sounding event. within Jakarta. It will have a road and Batam-Bintan bridge. He said foreign investors for total length of 31.9 km with a Most are unsolicited projects, the projects must team up with designed speed of 80 km-per- meaning they were initiated by local entrepreneurs and small hour. The public works ministry

Magazine | 35 iBUILD

has finished the basic design already completed the basic Road (JORR) elevated toll road. and the environmental impact design and environmental assessment of the project, and impact assessment. The toll The project began in 2018, and it is now at the approval letter road aims to increase the construction is expected to phase. volume of exports and imports finish next year. The estimated through the port, and drive concession period for the toll With an estimated cost of economic activities for residents road is 45 years. The FIRR is $1,083 million, the financial living in the area. 12.49% and the net project internal rate of return (FIRR) value (NPV) $536.27 million. of the project is 13.67%. The project will cost $440.9 The project is currently in the Preparations started in 2017, million, with an estimated FIRR process of the issuing of the and construction is expected to of 11.57%. It began in 2017, approval letter. finish in 2021. and construction is expected to finish in 2021. To date, it is at the SENTUL SELATAN- PATIMBAN PORT ACCESS approval letter issuance phase. KARAWANG BARAT TOLL TOLL ROAD ROAD The Patimban Port access CIKUNIR-ULUJAMI JORR The toll road project is designed toll road project is located in ELEVATED TOLL ROAD to run 61.5 km from Sentul Subang, West Java. Stretching The toll road project starts after Junction to Karawang Junction, 37.7 km in total with a designed the Ulujami Junction, Jakarta West Java. Once completed, speed of 80-km-per hour, it will and ends before the Jati Asih it will be connected to the smoothen road accessibility to Junction, West Java. It will be Jakarta-Bogor-Ciawi (Jagorawi) Patimban Port. The ministry has 21.5 km of the Jakarta Outer Ring toll road and Bogor Outer Ring

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construction is scheduled to budget next year will be Rp414 start in 2021. The ministry is trillion to help economic finalizing the project’s auction recovery, provide basic services, documents. and improve connectivity. The budget remains large as SEMARANG HARBOUR TOLL infrastructure is one of the ROAD labor-intensive sectors that The Semarang Harbour toll road can be boosted during the will be located between Kendal pandemic. and Semarang, Central Java. At 21.03 km with a design speed Toll Road Plans of 80 km-per-hour, it will link Indonesia is developing its the Kendal industrial area with network of toll roads across the Tanjung Mas Port in Semarang. nation. The programme includes It will also be connected to the two categories of toll roads, for Semarang-Demak toll road. It feeder links and major traffic will have two junctions and five corridors. The programme calls interchanges. The construction for the development of 2,700km phase is planned to start in of routes in 2020-2024. 2021. When it starts operating, initial vehicle volume is The government will priorities expected to reach 18,791. its funding for the major traffic corridors, also known The photo is not the actual object. BATAM-BINTAN BRIDGE as backbone toll roads. These The bridge project will connect backbone routes include the Infrastructure Batam Island and Bintan Trans-Sumatra, Trans-Java, Island, Riau Islands Province. Trans-Kalimantan, Trans- construction budget The bridge will be 7,035 km: Sulawesi, Trans-Nusa Tenggara next year will be Rp Batam Island to Tanjung Sauh and Trans-Papua toll roads. The 414 trillion to help Island, Tanjung Sauh Island to feeder toll roads are intended Buau Island, and Buau Island to connect with the backbone economic recovery, to Bintan Island. Construction routes, as well as existing provide basic is a solicited project, and and planned commercial and has been stipulated in the industrial areas.  services, and improve National Medium-Term connectivity. Development Plan (2020-2024) and Presidential Regulation Number 13 Year 2012 on Road (BORR). Sumatera Spatial Plan. FOR INQUIRIES: It is expected to improve the Construction is scheduled to Indonesia Toll Road Authority capacity of existing roads in begin in 2021, and the ministry (BPJT) Jabodetabek and solve traffic estimates it will cost Rp 4 trillion. [email protected] jams in the Puncak area. It will be equipped with six on/off INDONESIA [email protected] ramps, two interchanges and INFRASTRUCTURE UPDATE [email protected] three junctions. According President Joko Widodo says to the public works ministry, the infrastructure construction

Magazine | 37 iENERGY

CLEAN AND GREEN Indonesia throws support behind crude palm oil role in biofuel energy.

PROVIDING sustainable clean still dominated by gasoline the country’s dependency on and renewable energy is consumption in 2017, reaching fossil-based fuel and increase critical for Indonesia because 436 million barrels of oil national energy availability. of declining fossil-based fuel equivalent (BOE) - 40.24% of Biofuel is one form of bioenergy stocks. It also contributes to total energy consumption. By that comes from living materials, protecting the environment, sector, households had the such as plants. Blessed with which is essential for the health largest energy consumption an abundance of palm oil, the of its population. (35.37%), followed by country is working on making transportation (33.40%). This its top commodity a source of Fossil energy availability is shows the high dependence on biofuel. Palm oil produces crude falling, leading to skyrocketing fossil energy resources. palm oil (CPO) as a source of prices. Since 1991, the volume biodiesel to replace diesel fuel. produced by the country’s oil In response, the government wells has been decreasing. launched the National Energy TURNING WASTE FROM PALM In 2018, the Indonesian General Plan (Rencana Umum OIL INTO GOLD government targeted around Energi Nasional, RUEN) as a Indonesia is the home of palm 800,000 barrels of oil production guideline for improving energy oil, and its waste is great for per day. However, as of July diversification through new and bioenergy. Kalimantan and 2018, data from the Ministry of renewable energy. Presidential Sumatera islands are the centers Energy and Mineral Resources Decree No. 22 Year 2017 on of the palm oil industry, with showed production was only RUEN targets at least 23% of around 90% of the country’s 773,000 barrels per day. primary energy and renewable palm oil plantations. The energy usage in 2025, and a industry is growing rapidly, as According to Energy and minimum of 31% by 2030. seen by the increasing pace Economic Statistics of Indonesia of public plantations at 24% 2018, the country’s total Bioenergy has big prospects for per year from 1990 to 2015. energy consumption was development, and will reduce The positive industry profile

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Magazine | 39 iENERGY can also be seen through the contribution of CPO - in 2016, Indonesia provided 53.4% of total global CPO.

The production of palm oil is projected to rise in line with the increasing palm oil area from 2015 to 2019. In 2015, the palm oil area was 11,260,277 hectares with production total of 31,070,015 tons. In 2019, it rose to 14,667,560 hectares and 42,869,429 tons.

From cultivation to CPO production, the palm oil industry produces solid, liquid, and gas waste. Solid waste covers empty stalks, each ton BIOFUEL INDUSTRY AND million k/l in 2023. of which contains nutrients INVESTMENT PROSPECTS that make it a potential energy The investment prospects of the Economically, investing in source and compost for biofuel industry in Indonesia palm oil-based biofuel will fertilizing palm oil trees. are extensive. Data from the bring tremendous benefits. Directorate General of New One feasibility study showed Palm oil shells also have and Renewable Energy and investment in biofuel would potential as charcoal or fuel Energy Conservation in 2019 result in a positive net present for boilers. Unlike coal, palm revealed that biofuel production value with an internal rate of oil shells are environmentally- was greatly needed. Biofuel return of 15.72%. friendly because they do not production is projected to contain sulfur, which yields sulfur rise from 2020 to 2023 – from The government has issued dioxide (SO2) polluting gas. 10.2 million k/l in 2020 to 14.1 pro-investment regulations for the biofuel industry. Through Presidential Decree No. 44 Year 2016, investment in biofuel production can have 100% foreign ownership. Mandatory B30 policy, requiring a 30% mixture of palm oil-based biofuel in diesel fuel, has also been introduced. The government has also created the Palm Oil Plantation Funding Management Body, giving incentives and stipulated permit regulations. Presidential Instruction No. 8 Year 2018 on Palm Oil Plantation Permit

40 | Magazine iENERGY All photos are not actual objects All photos are

Evaluation and Delay as well as roundtrip days, making the PMK.011/2010 on Taxation Palm Oil Plantation Productivity biofuel industry run optimally Facility Allotment and Customs also encourages investment and more efficiently. for renewable energy activities opportunities in supporting in 2010. The regulation contains infrastructure to increase The Ministry of Finance also an income tax payment (PPh) productivity. The supporting gives special tax facilities facility that will reduce net industries include port and and customs for investors income of 30% from the capital jetty construction, tanks, piping, in the renewable energy investment amount. The ministry and metering systems, that will sector. It launched Ministry of will only charge 5% per year for reduce ship demurrage and Finance Regulation No. 21/ the investors for six years. 

Magazine | 41 More Than Airplanes Seven infrastructure projects to help airline industry take off.

42 | Magazine iTOURISM

INDONESIA’S STATE-OWNED airport management company, PT Angkasa Pura II (AP II) is developing and seeking partners for seven infrastructure projects to attract more visitors once the COVID-19 pandemic is over. The projects are ongoing at 17 airports across the country under AP II’s management. They include airport cities, integrated hotels, retail areas and advertising management. The aim is to embrace the tourism boom once the pandemic ends. Data from Statistics Indonesia (BPS) shows around 16 million foreign tourists visited Indonesia in 2019, compared to 15.81 million in 2018. Some 9.83 million foreign tourists or nearly 61% arrived via airplanes, intensifying the importance of airport infrastructure development.

Hotel at Terminal 3 Soekarno- Hatta International Airport AP II has completed civil construction of a 4-star integrated hotel at Soekarno- Hatta International Airport. Situated in Terminal 3, the hotel has 147 rooms and elite facilities to provide pleasant stays for both international and domestic passengers. The hotel will benefit most from the busy traffic at the airport, which welcomed 54 million passengers in 2019. Data prior to the pandemic shows the hotel will have a potentially high occupancy rate of 85% to 90%. Indicative revenue is expected to reach more than $5 million in 10 years.

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and eventually increase passenger spending rates. A long-term management contract of up to 15 years is being offered to investors, and the new retail management scheme is expected to bring in at least Rp1 trillion ($67 million).

Concession Agreement for Advertising Management Indonesia’s airport terminals are heaven for advertisements. In 2019, around 90 million passengers passed through 17 AP II is looking for a strategic Airport Retail Area airports, including Soekarno- investor to develop and Management Hatta International Airport, manage the hotel. The new To further increase revenue which makes them strategic partner could operate the hotel from the retail sector, AP II is sites for placing advertising. immediately, under an up to 20- working on the retail areas Given the huge potential, AP year contract agreement. at the airports it manages, II is boosting its advertising including at Soekarno-Hatta business by inviting partners to Aeroland City Development at International Airport. In 2019, earn even more revenue. Last Batu Jaya 2, Tangerang it landed Rp595 billion ($40 year, the 17 airports achieved The Aeroland City development million) from retail tenants. Rp215 billion ($15 million) from project by AP II is calling for a Under the new scheme, AP II advertisements, by optimizing potential investor, turning the will work with a strategic partner 112,385 sqm for ad placement. 400,000 sqm vacant land at who will manage the retail The new investor is expected Karanganyar, Tangerang, into business at the 17 airports. The to maximize the terminal areas, a business park and residential new partner will have authority which total 935,185 sqm. area. Its location is very strategic to further develop the retail areas For this project, a long-term as it is close to the AP II housing in these airports, which was only advertising management complex, industrial area and 102,525 sqm in 2019, to become contract of up to 15 years is the largest and busiest airport alternative shopping experiences being offered. in Indonesia - Soekarno-Hatta International Airport. The airport operator is upbeat the project will tap into the economic potential of the surrounding areas. Economic gains will come from hospitals, schools, universities and warehousing projects, among others. AP II is offering a long-term partnership scheme in the form of a build-operate-transfer (BOT) contract of up to 25 years.

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extension. The indicative initial outlay is Rp6.5 trillion ($437 million) with a net project value (NPV) of 12.55%.

Airport City at Supadio International Airport AP II will optimize 22 hectares of vacant land at the Supadio International Airport, West Kalimantan, as an airport city. Located near Pontianak, the most densely-populated city in Sky City at Soekarno-Hatta it stands in an around 200-ha Kalimantan, the airport city will Airport development area near the have good access to nearby Management of Soekarno-Hatta main entrance to the airport. cities such as Singkawang and International Airport is working It also has good accessibility Bengkayang. An integrated on Sky City – a commercial to Medan, the capital of the business area will also be built to and residential area set up on province, as well as the Belawan make it more attractive. around 55,000 sqm of vacant logistics center and the Tanjung The operator is offering a 25- land. Athough an airport Morawa industrial zone. year BOT contract agreement for authority regulation stipulates The operator is searching for investors with possible contract the height of the buildings must a new partner to manage and extension. The indicative initial be less than 40 meters, Sky City develop the city under a 25-year outlay is Rp600 billion ($40 still has big potential for hotels, BOT contract with a possible million) with an NPV of 14.5%.  offices, retail, and serviced/ leased apartments. It is also strategically situated at the main entrance area of the airport. The operator will give land utilization rights with a contract of up to 25 years, pending shareholder approval. Airport management is constructing a new flyover/overpass to make Sky City more accessible.

Airport City at Kualanamu International Airport FOR INQUIRIES: PT Angkasa Pura Aviasi, a subsidiary of AP II, is Hotel at Terminal 3 Soekarno-Hatta Sky City at Soekarno-Hatta Airport constructing an airport city at International Airport PT AP II: wisnu.raharjo@angkasapura2. Kualanamu International Airport, Aeroland City Development at Batu co.id Jaya 2, Tangerang North Sumatera, the second PT Angkasa Pura Propertindo: Airport City at Kualanamu largest airport in Indonesia. [email protected] International Airport Airport City at Supadio International Consisting of office and Airport Retail Area Management Airport entertainment facilities, the city Concession Agreement for PT Angkasa Pura Aviasi: haris@ will be strategically located as Advertising Management angkasapuraaviasi.co.id

Magazine | 45 iEVENT

Pictures Speak Louder Than Words

BKPM challenges photo enthusiasts to capture image as an attractive investment spirit. investment destination. Indonesia is transforming from being natural resources dependent to focusing on the THE INVESTMENT photos that describe investment manufacturing and service COORDINATING BOARD distribution equality outside sectors, while maintaining its (BKPM) has announced the Java island, and convey the rich culture. winners of its Investment Photo activities of micro, small and Competition 2020, with its medium-sized enterprises BKPM has determined six key sixth annual contest inviting (MSMEs). Labor-intensive performance indicators to Indonesians to capture economic projects and bureaucracy ensure investment projects activities and investment reform were other topics that benefit all: improve the enthusiasm on film, with Rp42 served as inspiration. ease of doing business million in total prize money. ranking, big investment The judges looked for theme project realization, quality Under the theme “Improving compatibility, technique, and investment equalization, Ease of Doing Business for the content or message of the cooperation between large Quality Investment,” the photo. Each participant could investors and MSMEs, focused competition was open to entries send up to five pictures that had investment promotion based from March 23 to July 31. not been used in other photo on sector, and country and Participants were divided into two competitions. The pictures domestic direct investment groups - Public and Professional. must have been taken between improvement. The public group was for non- January 2019 and July 2020. professional photographers, This year, Indonesia is targeting while the other brought together BKPM aims for the competition investment realization of more professional photographers and to spark interest from than Rp810 trillion, with the photo journalists. Indonesians in ongoing government aiming for nearly investment projects in their half of the target to be realized The panel of judges laid out surroundings, and it should outside Java island. key guidelines in picking the also promote the government’s winners. Participants must investment promotion efforts. There was Rp809.6 trillion of present their best shots of investment in 2019, creating objects that fulfil the theme or The powerful and artistic jobs for 1,033,835 workers in the sub theme. For example, pictures convey the country’s various business fields. 

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After weeks of deliberations, BKPM announced the winners through its website and social media account on August 27. The Winners PROFESSIONAL CATEGORY 1

1st winner: Abriawan, Gowa, South Sulawesi. Photo title: Export and Import Industry Transparency.

1 PUBLIC CATEGORY

1st winner: Agustinus Elwan, Pekanbaru, Riau. Photo title: Electricity Installation in Pekanbaru.

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PROFESSIONAL CATEGORY 2

2nd winner: Khairisal Anwar, South Jakarta, Jakarta. Photo title: Business Registration at BKPM’s One-Stop Service Centre.

2 PUBLIC CATEGORY

2nd winner: M. Khoirur Roziqin, Surabaya, East Java. Photo title: Energy Resources Equalization for the Nation in Pisau Island, Central Kalimantan.

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PROFESSIONAL CATEGORY 3

3rd winner: Idris Prasetiawan, Palopo, South Sulawesi. Photo title: Indonesia’s Palm Oil for the World.

3 PUBLIC CATEGORY

3rd winner: Akhmat Hariadi, Wonosobo, Central Java. Photo title: Road Access Concretization at Jenggawur Village, Banjarnegara.

Magazine | 49 iCALENDAR

JANUARY FEBRUARY MARCH APRIL

• Launch of Command Center (Pusat Kopi BKPM) • BKPM accelerates medical equipment business licensing (Decree of Chairman • President Jokowi state visit to United • Chairman of BKPM visit to East Java of BKPM No 86/2020) Arab Emirates • Eurocham – BKPM Forum on Indonesia Economic & Investment Outlook 2020 • MoU signing with: • MoU signing between BKPM and PT • Indonesia Pavilion and Indonesia Night Justika Siar Publika (Hukumonline. at the World Economic Forum Davos • National Investment Coordination a. Ministry of State-Owned Enterprises (SOE) com) regarding cooperation to promote 2020 Meeting (Rakornas) 2020 socialization and public consultation • MoU Signing between BKPM and The • MoU signing between BKPM and b. Batam Indonesia Free Trade Zone online relating to investment law Indonesia Stock Exchange (IDX) Indonesia National Police Authority (BP Batam) information • Investment Realization Quarter IV 2019 • Chairman of BKPM visit to Papua c. DBS Bank Indonesia • Market sounding of public-private Press Release partnership (PPP) project: six toll roads • Rating and Investment Information, and bridges Inc. (R&I) upgrades Indonesia’s sovereign credit rating from BBB/ • Investment Realization Quarter I 2020 stable outlook to BBB+/stable press release outlook (investment grade)

MAY JUNE JULY AUGUST

• Webinar on Maintaining Investment • Press conference on Investment to Momentum: Post-COVID-19 Investment • President Jokowi inspects Batang Support Economic Recovery Improvement Strategy by Ministry of Integrated Industrial Zone and the Foreign Affairs relocation of foreign investment to • Market sounding of Angkasa Pura II • Independence Day Indonesia projects • President Jokowi issues Government • Road to Indonesia Investment Day (IID) Regulation (PP) No. 23/2020 concerning • Announcement No. 8 of 2020 on • The Indonesia-Australia 2020 (August 11-October 20, 2020) the Implementation of the National Publication of Foreign Investor Comprehensive Economic Partnership Economic Recovery Program (PEN) in the Representative and/or Expert Foreign Agreement (IA-CEPA), came into effect • BKPM Chairman visit to Balikpapan (see Context of Supporting State Financial Worker Visit Supporting Letter Flow (July 5, 2020) (see page 6) page 10) Policies for Handling the COVID-19 during COVID-19 Pandemic. • Investment Realization Quarter II 2020 press release (see page 16)

SEPTEMBER OCTOBER NOVEMBER DECEMBER

• BKPM Chairman visit to South Korea • Indonesia Infrastructure Week 2020 (see page 14) (October 21-23, 2020) • BKPM Chairman visit to the • 35th Trade Expo Indonesia Virtual • The 3rd Indonesia Investment Day (IID) Netherlands (see page 15) Exhibition • APKASI (Association of Regency Driving the Role of Industry 4.0 Towards Administrations in Indonesia) Otonomi Sustainable Investment in Indonesia • A virtual dialogue with the Chairman • BKPM Chairman visit to South Korea Expo 2020 (December 15-17, 2020) (October 27, 2020) (see page 13) of BKPM: Omnibus Law and IA-CEPA (see page 12) Impact On Investment • MoU signing with LG Energy Solution • Investment Realization Quarter III 2020 Press Release (see page 17) • Central Java Investment Business Forum 2020

• West Java Investment Summit 2020

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EVENTS UPDATE JANUARY FEBRUARY MARCH APRIL

• Launch of Command Center (Pusat Kopi BKPM) • BKPM accelerates medical equipment business licensing (Decree of Chairman 35th Trade Expo Indonesia • President Jokowi state visit to United • Chairman of BKPM visit to East Java of BKPM No 86/2020) Arab Emirates • Eurocham – BKPM Forum on Indonesia The 35th Trade Expo Indonesia was back on. The Trade Economic & Investment Outlook 2020 • MoU signing with: • MoU signing between BKPM and PT • Indonesia Pavilion and Indonesia Night Justika Siar Publika (Hukumonline. Expo Indonesia Virtual Exhibition (TEI-VE), which is held at the World Economic Forum Davos • National Investment Coordination a. Ministry of State-Owned Enterprises (SOE) com) regarding cooperation to promote virtually this year, was the government’s effort to encourage 2020 Meeting (Rakornas) 2020 socialization and public consultation sustainability and increased the promotion of local products • MoU Signing between BKPM and The • MoU signing between BKPM and b. Batam Indonesia Free Trade Zone online relating to investment law Indonesia Stock Exchange (IDX) Indonesia National Police Authority (BP Batam) information to the global market by optimizing digital technology during the COVID-19 pandemic. The goal is to continue • Investment Realization Quarter IV 2019 • Chairman of BKPM visit to Papua c. DBS Bank Indonesia • Market sounding of public-private Press Release partnership (PPP) project: six toll roads to encourage national export performance. Along with the • Rating and Investment Information, and bridges Inc. (R&I) upgrades Indonesia’s exhibition, TEI-VE also presented a series of parallel activities sovereign credit rating from BBB/ • Investment Realization Quarter I 2020 consisting of Trade, Tourism and Investment Forum, Business stable outlook to BBB+/stable press release outlook (investment grade) Matching, Business Counselling and Regional Discussions. TEI-VE was held from November 10-16, 2020.  MAY JUNE JULY AUGUST

• Webinar on Maintaining Investment Singapore to Host 2021 • Press conference on Investment to Momentum: Post-COVID-19 Investment • President Jokowi inspects Batang Support Economic Recovery World Economic Forum Improvement Strategy by Ministry of Integrated Industrial Zone and the Foreign Affairs relocation of foreign investment to • Market sounding of Angkasa Pura II • Independence Day The World Economic Forum (WEF) will hold its 2021 Indonesia projects • President Jokowi issues Government Annual Meeting in Singapore from May 13 to 16, 2021, • Road to Indonesia Investment Day (IID) Regulation (PP) No. 23/2020 concerning • Announcement No. 8 of 2020 on • The Indonesia-Australia 2020 (August 11-October 20, 2020) changing from the previous announced location of Lucerne- the Implementation of the National Publication of Foreign Investor Comprehensive Economic Partnership Economic Recovery Program (PEN) in the Representative and/or Expert Foreign Bürgenstock in Switzerland. As revealed in late August, the Agreement (IA-CEPA), came into effect • BKPM Chairman visit to Balikpapan (see Context of Supporting State Financial Worker Visit Supporting Letter Flow (July 5, 2020) (see page 6) page 10) 2021 Annual Meeting will be preceded by high-level “Davos Policies for Handling the COVID-19 during COVID-19 Dialogues,” digitally convened by the WEF during the week Pandemic. • Investment Realization Quarter II beginning January 25, when key global leaders will share 2020 press release (see page 16) their views on the state of the world in 2021.

The WEF selected Singapore as the best place to host the SEPTEMBER OCTOBER NOVEMBER DECEMBER meeting in the wake of the COVID-19 pandemic. Top leaders in the fields of politics, economics and academia will come • BKPM Chairman visit to South Korea together to discuss global recovery from the pandemic. The • Indonesia Infrastructure Week 2020 (see page 14) (October 21-23, 2020) summit will be both in-person and virtual. • BKPM Chairman visit to the • 35th Trade Expo Indonesia Virtual • The 3rd Indonesia Investment Day (IID) Netherlands (see page 15) Exhibition • APKASI (Association of Regency Driving the Role of Industry 4.0 Towards Around 3,000 participants attended this year’s forum held in Administrations in Indonesia) Otonomi Sustainable Investment in Indonesia • A virtual dialogue with the Chairman Davos in January. On the sidelines, Indonesia held Indonesia • BKPM Chairman visit to South Korea Expo 2020 (December 15-17, 2020) (October 27, 2020) (see page 13) of BKPM: Omnibus Law and IA-CEPA (see page 12) Night, an annual gathering showcasing the best of what the Impact On Investment • MoU signing with LG Energy Solution • Investment Realization Quarter III 2020 nation has to offer. It also initiated the Indonesia Pavilion, Press Release (see page 17) • Central Java Investment Business which brought together WEF delegations and Indonesian Forum 2020 representatives for an information sharing session about the • West Java Investment Summit 2020 country. 

Magazine | 51 iHIGHLIGHT Let’s Go East Optimizing potential outside Java.

HOME TO SOME OF THE resources and well-diversified projects to drive economic WORLD’S LARGEST ISLANDS, economic planning. activities for locals and benefit Indonesia continues to dig investors. deeper into its potential and NORTH SULAWESI the opportunities for creating Nestled on the tip of Sulawesi Bitung International Hub prosperity for all its people. The island, North Sulawesi is notable Seaport Investment Coordinating Board for its agriculture, forestry and The seaport is situated in Bitung (BKPM) has been encouraging fishery sector. It also has pristine and in close proximity to Bitung foreign and domestic investors marine beauty that inspired the Special Economic Zone, Sam to invest outside Java island, regional governments to set up Ratulangi International Airport where there are many large the eco-tourism industry. The and Manado, the capital city islands with abundant natural administration is promoting of the province. It will support

52 | Magazine iHIGHLIGHT

of a product distribution and for the fish processing industry, logistics hub in the eastern which is already a flourishing regions of Indonesia. It will also sector in North Sulawesi. assist industrial activities in the regions, such as agriculture, The zone is expected to industry and mining in contribute a higher percentage Ambon and Ternate; and coal, to gross domestic product petroleum and plywood in and reinforce the province’s Samarinda, Balikpapan, Tarakan reputation as one of the and Nunukan. country’s largest fish exporters. Other priority sectors in the Facilities at the seaport include zone include the coconut a 591-meter dock area, four processing, pharmaceutical and container cranes and eight logistics industries. It covers rubber tyred gantries (RTG). 534 ha, with 114.96 ha ready to The project has a $2 billion develop. investment value, and is offered to investors based on The investment target is $2 a build-transfer-operate (BOT) billion, and the concession concession agreement. agreement offered is BOT. Investors receive tax holidays, Bitung Special Economic Zone tax allowances and three-hour The government issued investment licensing schemes. Government Regulation Number 32 Year 2014 on the Bitung Likupang Special Economic Special Economic Zone. Located Zone in Bitung and close to Bitung North Sulawesi is also working International Hub Port and Sam on the Likupang Special Ratulangi International Airport, Economic Zone, which offers the zone is especially strategic luxury tourism resorts, cultural

Making use of fishery and tourism potential as promising investment materials with high added value.

the development of the Bitung Special Economic Zone. It is ideal as the center of growth

Magazine | 53 iHIGHLIGHT eco-tourism, eco-tourism and more than 30 diving spots.

The zone occupies 197 ha in Likupang, North Minahasa and is in a strategic location, just one hour from Bitung International Hub Port and less than two hours from Samratulangi Airport and Manado City.

The investment value of the zone is $1 billion, with build- own-operate (BOO) or BOT as the concession agreements. It For Inquiries offers incentives for investors through tax holidays, tax Any information regarding investment opportunities in North Sulawesi can allowances and three-hour be obtained from the Regional Investor Relations Unit – North Sulawesi: [email protected] investment licensing schemes.

EAST KALIMANTAN To create more sustainable economic zones. With abundant natural economic growth, the provincial resources, East Kalimantan administration plans to Maloy Batuta Trans Kalimantan relies heavily on the mining diversify and add more value Special Economic Zone and plantation industries, which to commodities, encouraging Maloy Batuta Trans Kalimantan have hugely contributed to the the downstream business and Special Economic Zone is province’s economy and the creating new lines of industries situated in Kutai Timur Regency. country’s export growth. through business incentives and The government created the

54 | Magazine iHIGHLIGHT

East Kalimantan’s appointment as the location of Indonesia’s new capital, North Penajam Pasir and Kutai Kartanegara, opens up a bright future for residents and lucrative business opportunities. zone in Government Regulation It is close to a seaport, and will Number 85 Year 2014. It has soon be connected by bridge to an area of 557.34 ha, and is Buluminung Industrial Park. equipped with an 11.4 km on- complex road, an international The operation of the park will seaport, a power supply, and complete Balikpapan’s industrial an on-site water and waste power, which already has management system. It is established companies dealing also strategically located in with wood processing, palm oil II is one of seven segments Indonesian Archipelagic Sea and heavy equipment. designed to create an attractive Lanes II (ALKI II) that connects entrance to the new capital, and Kalimantan and Sulawesi Island. The park occupies 133 ha, includes a conservation area, and has a $8.9 million area public space, and an office and The zone has an investment investment value. It will residential area. value of up to $1.25 billion, specialize in automotives, which could draw around 5,700 pharmaceuticals, steel, Segment II will consist of a workers. The government’s construction, chemicals, lagoon and forest park with aim is for the zone to be a machinery, wood and pulp and a total area of 21.5 ha and processing center for palm oil plantation processing. investment value of $9.1 and its derivatives, as well as for million. It is managed by the the wood processing, mineral, Segment II Coastal Area Project city administration, which is gas and coal industries. The third offer lies in Segment currently planning a cost- II of the Coastal Area project sharing proposal for potential Kariangau Industrial Park located in Balikpapan. Segment investors.  The second investment opportunity is Kariangau For Inquiries Industrial Park. About 30 km from the heart of Balikpapan, For any investment information on East Kalimantan, East Kalimantan Regional Office it is also 1.5 hours away from of Bank Indonesia and Regional Board of Investment and Integrated Licensing – East the location of the new capital. Kalimantan Province, contact: [email protected] or [email protected]

Magazine | 55 iKNOW A BLESSING IN DISGUISE Special task force set up for investment relocation.

THE INVESTMENT investors. The team formulates COORDINATING BOARD strategies to attract companies (BKPM) has established a to relocate their businesses special task force to welcome to Indonesia, and oversees foreign investors in the wake of company license processing the COVID-19 pandemic. The from ministries/institutions to firms, which have decided to the regional administration close their operations in China, level. are mostly from the United States and Japan. The team has three assignments. It predicts which The task force, led by the companies plan to leave China. Deputy of Investment It examines what facilities are Promotion, reports directly offered by other countries to to BKPM Chairman Bahlil investors. Then it negotiates Lahadalia, who said task force with investors. BKPM has given members are competent and special authority to the task approaching the investors. highly experienced in dealing force to allow for immediate That’s a field marketing with large corporate investors. decision-making, which is strategy,” Bahlil said. essential for accelerating the “My team is called Tim Mawar, team’s role. As of September 2020, 143 and is filled with bright companies had shown interest young employees. They were “The team does daily follow- in relocating to Indonesia, previously assigned to our ups, asking the investors about representative offices abroad, the problems they are facing. and are now gathered here to Therefore, we are conducting become the special task force,” a more proactive approach. he said. In the past, investors were more proactive in approaching The task force concentrates the government, now it’s the on how to attract potential opposite: the government is

56 | Magazine iKNOW

with the potential to employ Bahlil said Indonesia is because of the competitive land up to 300,000 workers, and among the top 10 investment price it offers compared to other seven foreign companies have destinations this year thanks countries in Southeast Asia. successfully been drawn to to its natural resources and invest here. The task force has big market potential. BKPM is Japan and the US were among also been focusing on another currently promoting Brebes Indonesia’s 10 biggest investors 17 potential investors, and Regency and Batang Regency in the first quarter of 2020. Japan has been actively involved in Central Java to potential was in the fourth place, investing in dealing with technical investors as strategic locations $604.2 million (Rp8.7 trillion) problems related to investment for their factories. In particular, in 1,519 projects. The US was experienced by investors. Batang Integrated Industrial in ninth position with $114.1 Estate is massively promoted million in investment spread across 299 projects.  iACTUAL MINDING TAXES

BKPM given greater authority on tax allowances via OSS.

58 | Magazine iACTUAL

INDONESIA’S INVESTMENT already operated by BKPM. and other requirements are Coordinating Board (BKPM) The Ministry of Finance, as the met. If the Ministry of Finance has been given complete fiscal authority, will continue to approves the application, the authority to handle applications decide who will receive the tax issuance of the tax allowance for tax allowance incentives by allowances, which are granted will contain information investors via the Online Single to investors in specific business supporting business operations. Submission (OSS) system. The activities and/or regions. BKPM’s government move is designed new role was announced on This information includes name, to attract potential investors, August 11, 2020. address, taxpayer identification then increase investment number (NPWP), tax allowance realization. IT IS SIMPLER NOW details, business identification According to PMK No. 96/2020, number (NIB), principle The transfer of this authority to investors must register license, taxpayer obligations BKPM is outlined in Ministry of themselves via the OSS, which and prohibitions, period of Finance Regulation (PMK) No. is the integrated digital system granted facilities, standard 96/PMK/0.10/2020 concerning for arranging business licensing. industrial classification (KLBI), changes to the amendment Each investor must prepare and investment plan. BKPM also of PMK No. 11/PMK.011/2020 the necessary documents, handles submitted document on the Implementation of such as fixed asset accounting verification and the issuance of Government Regulation No. documents, tax clearance the decree on granted facilities. 78/2019 Concerning Income Tax certificates, documents on Facilities for Investment in Certain production result transactions, FOR INVESTMENT IN 183 Fields and/or Certain Areas. and field inspection documents. BUSINESS ACTIVITIES The government is offering The new regulation further BKPM will then process the tax tax allowances for investors stipulates tax allowance allowance application within who wish to set up business in applications will be supported five days, as long as the relevant any one of 183 business lines. by the OSS system, which was documents are provided One example is the oil and gas

Magazine | 59 iACTUAL

industry, covering oil refineries, The OSS system by the Ministry of Finance, was liquefied natural and petroleum shifted to BKPM on behalf of the gas, and lubricant activities. played an important Ministry of Finance. Since BKPM role, speeding up the was appointed administrator, Another is power generation, thirteen submissions have been consisting of geothermal application evaluation approved. and alternative/renewable process, making the energy. The agriculture decision process From January to November this sector also qualifies, and year, the government granted broadly consists of the much faster and more 26 tax allowance applications, following sub-units: cattle accurate. double from 13 the previous breeding and farming, corn year. The OSS system played an plantations, soya plantations, OSS SYSTEM SUCCESSFULLY important role, speeding up the rice farming, and tropical fruit. DOUBLED NUMBER OF TAX application evaluation process, The facility also applies to ALLOWANCE PROPOSALS making the decision process the manufacturing sector and BKPM took full charge of much faster and more accurate. industries containing a large tax allowance proposal number of activities, such as handling on August 11, 2020, Applications from January iron and steel, automotive, whereby investors could file to November were filed by clothing, semi-conductors, their proposals via the OSS investors who planned to electronic components, system. Without changing invest up to Rp28.3 trillion in computers, communication the requirements and criteria Indonesia. The government devices, televisions, tires, for granting the previous tax hopes more and more investors pharmaceuticals, cosmetics, allowance facility, the process, will reap the benefits of this and fish and shrimp processing. which was initially carried out facility. 

60 | Magazine Batang PRIME Integrated Industrial Estate LOCATION

A strategic location in the economic corridor of North Java, Batang has great potential as a gateway to the national economy and expanding international connectivity through the Tanjung Mas Sea Port and Ahmad Yani International Airport, Semarang, all within a 60-kilo- metre range. Supported by integrated infrastructure such as direct toll-road access, railway access to Tanjung Mas International Sea Port, an electricity and gas network, raw water resources, and direct access to the container port, it is ready to embrace the future global market.

4 hours from J akarta DKI JAKARTA Batang Integrated Industrial Estate

Cirebon rom Sema Pekalongan ur f rang ho 1 Demak Tegal Kendal Semarang Bandoeng Surabaya JAWA Surakarta

Jogjakarta

65 km 4 hours from Tanjung Mas Port Semarang from Jakarta

50 km 1 hour from Ahmad Yani International Airport, from Semarang Semarang INDONESIA INVESTMENT PROMOTION CENTRE (IIPC)

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P. +62 21 5252 008 (hunting) P. 08071002576 or 1500765 (Contact Center) F. +62 21 520 2050 E. [email protected] E. [email protected]