Establishing special economic zones (SEZs) is an important measure for Indonesia's economic development. The Acting Secretary of the Indonesian SEZ Council recently stated that Indonesia will soon add four new SEZs with a total investment of IDR 161 trillion. The four new SEZs are located in four provinces, with two SEZs in Batam, Riau Islands Province focusing on logistics, energy development, and health tourism; the South Tangerang SEZ in Banten Province focusing on digital economy, education, health, and creative industries; and the Morowali SEZ in Central Sulawesi Province engaging in logistics and energy production and processing industries. The plan to establish the four SEZs has passed review but still requires presidential approval before being officially included in the list of special areas developed by the government. In addition, the government has received proposals for seven other SEZs located in Java, Sulawesi, and East Kalimantan. Among them, the Nusantara SEZ in East Kalimantan will supply energy to the new capital and serve as a showcase center for mining activities. There is high demand from investors for these seven proposed SEZs. On July 26, President Joko Widodo inaugurated the Batang Integrated Industrial Estate in Central Java. The industrial estate, established in 2020, covers an area of approximately 4,300 hectares and is expected to create about 250,000 jobs. The first phase covers 400 hectares, with 18 companies already operating, investment reaching IDR 14 trillion, and attracting around 19,000 workers. Coordinating Minister for Maritime and Investment Affairs Luhut stated that an SEZ will be created here. Indonesia passed the Special Economic Zone Law in 2009, marking the beginning of SEZ development. According to the law, designated areas subject to unique economic regulations should aim to create more equitable economic development across regions. Indonesia's first SEZ was in Tanjung Lesung, Banten Province, launched in 2012. Currently, Indonesia has 22 SEZs nationwide, mainly focusing on industry, tourism, and digital sectors. The Indonesian government provides a series of incentive policies and measures for SEZs. According to reports, investors with a minimum investment of IDR 1 trillion will receive a 20-year corporate income tax exemption, those with an investment of at least IDR 500 billion will receive a 15-year corporate income tax exemption, and investors with an investment of IDR 100 billion will receive a 10-year corporate income tax exemption. Other fiscal incentives for SEZs include tax holidays, tax reductions, VAT exemptions, luxury goods sales tax exemptions, and regional tax exemptions.
In non-fiscal aspects, measures such as government assistance will provide convenience for SEZ investors. For example, building use rights for up to 80 years, relaxed entry permits, and up to 100% foreign ownership. Previously, not all businesses allowed 100% foreign ownership. Industries that foreigners can wholly own include oil and gas construction services, offshore oil and gas drilling, geothermal drilling, timber industry, and internet service providers. Additionally, the government is optimizing the "One Map Policy" to accelerate the development of SEZs and national strategic projects. In February 2023, the Geospatial Information Authority, authorized by a presidential decree, issued access classifications and mechanisms for sharing geospatial information, particularly regarding public access rights. Previously, this data and information were closed and not accessible to the public. The head of the Indonesian Geospatial Information Authority stated that the data collected is divided into 151 themes, which is crucial for data certainty, allowing users to obtain geospatial information on their targets and topics of interest as needed. Indonesia will continue to encourage economic transformation, including through the development of SEZs to accelerate economic growth and achieve the "Golden Indonesia 2045 Vision." Indonesia's President-elect Prabowo stated at the launch of the "One Map" 2.0 version that "policies such as SEZs can accelerate development, which is crucial for our country's economic growth." The Coordinating Minister for Economic Affairs also stated that SEZs have a positive impact on regional economies, targeting globally competitive industries, international standard tourism services, education and health services, and digital economy. Overall, most SEZs have developed well and made positive contributions to economic development, including helping to improve regional economies and eliminate regional disparities, as well as maximizing industrial activities and encouraging the import and export of high-economic-value goods and services. From 2012 to the end of June this year, SEZ investment realization reached IDR 205.2 trillion, employing over 130,000 workers. In the first half of 2024, SEZ investment reached IDR 31.4 trillion, accounting for 40% of this year's target of IDR 78.1 trillion. During the same period, SEZs attracted 15,229 workers, accounting for 39% of the target of 38,953.
Establishing special economic zones (SEZs) is an important measure for Indonesia's economic development. The Acting Secretary of the Indonesian SEZ Council recently stated that Indonesia will soon add four new SEZs with a total investment of IDR 161 trillion. The four new SEZs are located in four provinces, with two SEZs in Batam, Riau Islands Province focusing on logistics, energy development, and health tourism; the South Tangerang SEZ in Banten Province focusing on digital economy, education, health, and creative industries; and the Morowali SEZ in Central Sulawesi Province engaging in logistics and energy production and processing industries. The plan to establish the four SEZs has passed review but still requires presidential approval before being officially included in the list of special areas developed by the government. In addition, the government has received proposals for seven other SEZs located in Java, Sulawesi, and East Kalimantan. Among them, the Nusantara SEZ in East Kalimantan will supply energy to the new capital and serve as a showcase center for mining activities. There is high demand from investors for these seven proposed SEZs. On July 26, President Joko Widodo inaugurated the Batang Integrated Industrial Estate in Central Java. The industrial estate, established in 2020, covers an area of approximately 4,300 hectares and is expected to create about 250,000 jobs. The first phase covers 400 hectares, with 18 companies already operating, investment reaching IDR 14 trillion, and attracting around 19,000 workers. Coordinating Minister for Maritime and Investment Affairs Luhut stated that an SEZ will be created here. Indonesia passed the Special Economic Zone Law in 2009, marking the beginning of SEZ development. According to the law, designated areas subject to unique economic regulations should aim to create more equitable economic development across regions. Indonesia's first SEZ was in Tanjung Lesung, Banten Province, launched in 2012. Currently, Indonesia has 22 SEZs nationwide, mainly focusing on industry, tourism, and digital sectors. The Indonesian government provides a series of incentive policies and measures for SEZs. According to reports, investors with a minimum investment of IDR 1 trillion will receive a 20-year corporate income tax exemption, those with an investment of at least IDR 500 billion will receive a 15-year corporate income tax exemption, and investors with an investment of IDR 100 billion will receive a 10-year corporate income tax exemption. Other fiscal incentives for SEZs include tax holidays, tax reductions, VAT exemptions, luxury goods sales tax exemptions, and regional tax exemptions.
In non-fiscal aspects, measures such as government assistance will provide convenience for SEZ investors. For example, building use rights for up to 80 years, relaxed entry permits, and up to 100% foreign ownership. Previously, not all businesses allowed 100% foreign ownership. Industries that foreigners can wholly own include oil and gas construction services, offshore oil and gas drilling, geothermal drilling, timber industry, and internet service providers. Additionally, the government is optimizing the "One Map Policy" to accelerate the development of SEZs and national strategic projects. In February 2023, the Geospatial Information Authority, authorized by a presidential decree, issued access classifications and mechanisms for sharing geospatial information, particularly regarding public access rights. Previously, this data and information were closed and not accessible to the public. The head of the Indonesian Geospatial Information Authority stated that the data collected is divided into 151 themes, which is crucial for data certainty, allowing users to obtain geospatial information on their targets and topics of interest as needed. Indonesia will continue to encourage economic transformation, including through the development of SEZs to accelerate economic growth and achieve the "Golden Indonesia 2045 Vision." Indonesia's President-elect Prabowo stated at the launch of the "One Map" 2.0 version that "policies such as SEZs can accelerate development, which is crucial for our country's economic growth." The Coordinating Minister for Economic Affairs also stated that SEZs have a positive impact on regional economies, targeting globally competitive industries, international standard tourism services, education and health services, and digital economy. Overall, most SEZs have developed well and made positive contributions to economic development, including helping to improve regional economies and eliminate regional disparities, as well as maximizing industrial activities and encouraging the import and export of high-economic-value goods and services. From 2012 to the end of June this year, SEZ investment realization reached IDR 205.2 trillion, employing over 130,000 workers. In the first half of 2024, SEZ investment reached IDR 31.4 trillion, accounting for 40% of this year's target of IDR 78.1 trillion. During the same period, SEZs attracted 15,229 workers, accounting for 39% of the target of 38,953.