Guide for Outbound Investment and Cooperation - Indonesia 2023 Edition
Before preparing for investment and cooperation in the Republic of Indonesia (hereinafter referred to as "Indonesia"), you need to understand Indonesia's political, economic, social, and cultural environment, local laws and regulations regarding foreign economic and trade cooperation, issues to be aware of when conducting investment and cooperation, and how to deal with local governments, residents, media, and law enforcement agencies. The "Indonesia" volume of the "Country (Region) Guide for Outbound Investment and Cooperation" series will provide basic information and serve as your guide to understanding Indonesia.
Indonesia Denies Imposing 200% Import Tariff on China
Shopkeeper Says: Will Indonesia's Up to 200% Tariffs Be Implemented?
Indonesia's Ministry of Trade Plans to Tighten Imports of Chinese Ceramic Products
Indonesia will offer a series of incentives for Chinese investors
Indonesian Government Plans to Realize Foreign Investment in New Capital This Year
The IKN Authority targets to realize foreign investment in the new capital (IKN) in East Kalimantan (Kaltim) this year, claiming that foreign investor interest in the region is quite high. The Deputy for Financing and Investment of OIKN stated that the IKN investment plan many foreign investors are considering is a cooperation between the government and business entities (KPBU). Foreign investors are very interested in this PPP, so the government aims for this huge interest from foreign investors to start materializing by 2024. This year, the government's investment target in the new capital reaches IDR 100 trillion. This figure comes from
Indonesia Expected to Achieve 5.2% Economic Growth in Q1
The Coordinating Minister for Economic Affairs is optimistic that Indonesia's economic growth in the first quarter of 2024 will exceed 5%. He stated that Indonesia's economic target for 2024 is 5.2% growth. The target for this year so far is 5.2%. Of course, the government hopes that the figure for Q1 2024 will be quite good, but it is awaiting the official results from the Central Statistics Agency (BPS). It is expected that Q1 economic growth will surpass 5%. He emphasized that Indonesia's economic fundamentals are relatively solid. Meanwhile, the rupiah exchange rate has depreciated by 5.16% year-to-date to IDR 16,235 per USD.
Indonesia's plan to raise VAT to 12% has not yet been confirmed for implementation next year
The government will discuss the policy plan to increase Value Added Tax (VAT) to 12%. It has not yet been decided whether this policy will be implemented in 2025. On Wednesday (April 23, 2024), the Coordinating Minister for Economic Affairs stated that this issue will only be discussed within the framework of the State Budget (APBN). Currently, President Joko Widodo's government is discussing the 2025 Government Work Plan (RKP), which will serve as a reference for the government and parliament when discussing the draft 2025 State Revenue and Expenditure Budget (RAPBN). The increase of VAT to 12% is a mandate of the HPP Law passed by President Joko Widodo in October 2021, which requires VAT to be raised to 11% in April 2022 and further increased to 12% no later than January 1, 2025.
China-Indonesia 'Two Countries, Twin Parks' Demonstration Zone: Phase II of Food Industrial Park to Start Construction Soon
The Yuanhong Functional Area of Fuzhou New Area recently announced that a consortium led by China Communications Second Navigation Bureau has won the bid for the China-Indonesia Economic and Trade Innovation Development Demonstration Park Food Industrial Park (Phase II) project, with construction expected to begin in the first half of this year. It is reported that this project is a key infrastructure supporting project for the China-Indonesia 'Two Countries, Twin Parks' initiative, with a total investment of 2.567 billion yuan. It covers upgrading projects for the western and eastern zones of Yuanhong Investment, Yuanhong resettlement housing (Phase I), the road project for Yuan Cheng Road (from Haicheng Road to Hongjia Avenue section), green spaces around Sanchuang Park, Yuan
China Development Bank Allocates Funds to Indonesian Railway Company to Solve High-Speed Rail Cost Overruns
China Development Bank (CDB) has disbursed $448 million (approximately IDR 6.9 trillion) to Indonesian Railway Company (KAI). This loan will be used to cover cost overruns for the Jakarta-Bandung High-Speed Railway, also known as the "Whoosh" high-speed rail project. In a significant document submitted by KAI to the Financial Services Authority, the loan is denominated in both US dollars and Chinese yuan. The loan is divided into two parts: Tranche A, amounting to $230.9 million (approximately IDR 3.6 trillion), was disbursed on February 7. Secondly, Tranche B is RMB 1.54 billion
Indonesia Promotes Local Currency Settlement to Strengthen Regional Economic Stability
Perry Warjiyo, Governor of Bank Indonesia, recently announced a new financial strategy to adopt local currency settlement in cross-border transactions with India and Saudi Arabia. Warjiyo emphasized the importance of this decision at a press conference in Jakarta: "By promoting the use of our own currency, we can achieve more stable exchange rates, as they will no longer be subject to fluctuations in the supply of the U.S. dollar. This will help maintain Indonesia's macroeconomic stability and contribute to the improvement of trade and currency stability in Southeast Asia."