Exploring the advantages of Special Economic Zones in Indonesia

Tempo de leitura: 3 minutos

Indonesia has strategically developed several Special Economic Zones (SEZs or Kawasan Ekonomi Khusus / “KEK”) to boost its industrial sector, attract foreign investment, and create job opportunities. These zones offer a range of incentives and benefits designed to make Indonesia a competitive destination for industrial activities.

These SEZs are strategically located to leverage Indonesia’s natural resources and geographic advantages. They offer various benefits, including tax incentives (tax holidays and tax allowances), customs benefits, regulatory support, and enhanced infrastructure. These incentives are designed to reduce operational costs and simplify business processes, making it easier for companies to establish and expand their operations in Indonesia.

Indonesia’s industrial SEZs play a crucial role in driving economic growth and industrial development. By offering a conducive environment for businesses, these zones attract significant investments and contribute to the country’s overall economic progress.

Investing in SEZs offers numerous benefits for businesses. Here are some key advantages:

1. Tax Incentives

• Corporate Tax Holidays: Businesses can enjoy significant reductions or exemptions from corporate income tax for a specified period.
• VAT and Luxury Goods Tax Exemptions: Exemptions on Value Added Tax (VAT) and luxury goods tax for certain goods and services.

2. Customs Benefits

• Duty-Free Imports: Exemptions on import duties for machinery, raw materials, and other essential goods.
• Simplified Customs Procedures: Streamlined customs processes to facilitate faster and more efficient import and export activities.

3. Regulatory Support

• Easier Business Licensing: Simplified and expedited processes for obtaining business licenses and permits.
• Immigration Benefits: Easier visa and work permit processes for foreign workers and investors.

4. Enhanced Infrastructure

• Modern Facilities: Access to state-of-the-art infrastructure, including ports, airports, roads, and high-speed internet.
• Utilities: Reliable supply of electricity, water, and other essential utilities.

5. Strategic Locations

• Proximity to Resources: SEZs are often located near natural resources, making it easier and more cost-effective to source raw materials.
• Access to Markets: Strategic locations provide easy access to domestic and international markets, facilitating trade and distribution.

6. Economic and Operational Efficiency

• Cost Savings: Reduced operational costs due to tax incentives, duty exemptions, and efficient logistics.
• Increased Productivity: Enhanced infrastructure and regulatory support lead to higher productivity and operational efficiency.

7. Supportive Ecosystem

• Business Clusters: The presence of related industries and services within the SEZs creates a supportive ecosystem for businesses.
• Government Support: Strong government backing and policies aimed at promoting investment and economic growth.

In addition to existing SEZs in Java, such as Gresik SEZ and Kendal SEZ, the Indonesian government recently announced several new locations for Special Economic Zone industrial estates in Java for the year 2024. These include Subang SEZ, Patimban SEZ, Batang SEZ, and Sidoarjo SEZ. This expansion reflects the growing importance of industrial estates in Central Java, particularly as regions in Batang and Kendal continue to attract investment and infrastructure development.

To learn more about industrial property for sale or lease in Indonesia, please connect with our experts or complete the Tenant Need Analysis. Our commercial real estate agents and experts from Industrial Property Representation team will assists clients in developing industrial estates, while our Industrial Tenant Representation team can provides services to clients seeking industrial property.

Our commercial real estate services team will then arrange visits to the selected properties at your convenience. Read our property market research and analysis or property news for the latest updates and trends. If you would like to know about property market trends as well as property investment in Indonesia, you can subscribe to our mailing list for more updates on the latest development in real estate property.

Fonte: Colliers | Foto: Pixabay