Professional Documents
Culture Documents
FAQ On Investment
FAQ On Investment
QUESTIONSon InVestment
5
LIST OF CONTENT
Foreword ............................................................................................................. 6
CHAPTER 01
Indonesia ........................................................................................................... 8
CHAPTER 02
Investment Opportunities .............................................................................. 14
Priority Sectors .............................................................................................. 16
Special Economic Zones ................................................................................ 18
CHAPTER 03
Investment Procedures ................................................................................... 20
Starting Business ........................................................................................... 22
Getting Licenses ........................................................................................... 27
One Stop Service Center ............................................................................... 28
Priority Service .............................................................................................. 29
Investment Incentives .................................................................................... 32
CHAPTER 04
Investment Related Aspects ........................................................................... 38
Labor ............................................................................................................ 40
Land Ownership ........................................................................................... 54
Taxation ....................................................................................................... 57
Immigration .................................................................................................. 60
Trade ............................................................................................................ 65
CHAPTER 05
Government Support ...................................................................................... 70
Related Government Agencies ...................................................................... 72
BKPM ........................................................................................................... 77
Indonesia Investment Promotion Center (IIPC) ............................................... 78
BAHLIL LAHADALIA
Chairman of Indonesia Investment
Coordinating Board (BKPM)
FOREWORD
Indonesia
10
FAQ - FREQUENTLY ASKED QUESTIONS ON INVESTMENT
QUESTION 1
QUESTION 2
QUESTION 3
Investment
Opportunities
16
FAQ - FREQUENTLY ASKED QUESTIONS ON INVESTMENT
PRIORITY SECTORS
QUESTION 4
Most industries and other business investment list or DNI”. This regulation
fields in Indonesia are open for attaches to the Investment Law under
foreign investments unless mentioned Presidential Regulation No. 44 Year
otherwise in the Investment Guidance 2016
or previously called the “negative
QUESTION 5
Investment
Procedures
22
FAQ - FREQUENTLY ASKED QUESTIONS ON INVESTMENT
STARTING BUSINESS
QUESTION 7
ANSWER :
QUESTION 8
ANSWER :
QUESTION 9
ANSWER :
QUESTION 10
ANSWER :
QUESTION 11
ANSWER :
QUESTION 12
The regulation of Central Bank of Indonesia stated that all banking transactions
(such as capital injections, administration of loans, payment of capital equipments,
raw materials and others) of a newly established PT. PMA should be administered
through a special foreign investment bank account in Indonesia. The required
documents to open such account are as follows:
GETTING LICENSES
QUESTION 13
QUESTION 14
QUESTION 15
ANSWER :
ANSWER :
QUESTION 17
ANSWER :
One Stop Service Center (PTSP Pusat) in 4. Facilitating the problems faced
BKPM offers activities such as: by investors in realizing their
investment in Indonesia.
1. Serving information and
consultation on investment policies 5. Synchronizing and coordinating
in a specific sector. with related Ministries/Institutions
including with provincial, regency/
2. Serving business license applications city governments, administrators
which are not regulated in of Special Economic Zones (SEZs),
Government Regulation Number and Free Zone Authority.
24 Year 2018 regarding Online
Integrated Business Licensing 6. Providing priority service for
Service. eligible investors in obtaining
business licenses (Layanan
3. Clarifying the procedure of business Prioritas).
licensing application through the
OSS system (Layanan Berbantuan).
PRIORITY SERVICE
QUESTION 18
ANSWER :
QUESTION 19
QUESTION 20
ANSWER :
INVESTMENT INCENTIVES
QUESTION 21
ANSWER :
Yes. Indonesian Government provides purpose of 2 years full production
investment incentives as follows: (accumulated production time).
- BKPM Regulation No. 6 Year 3. The importation to the extant of
2018 as amended by BKPM machines, goods and materials
Regulation No. 5 Year 2019 and which:
Ministry of Finance Regulation
- Are not produced in Indonesia
No. 176/PMK.011/2009 as
amended by Ministry of - Are produced in Indonesia but
Finance Regulation No. 188/ they don’t meet the required
PMK.010/2015, explained : specifications
QUESTION 22
2. 7 (seven) tax years for new 5. 20 (twenty) tax years for new
investments with an investment investments with the value of
plan value of at least IDR the investment plan at least IDR
1,000,000,000,000 (one trillion 30,000,000,000,000 (thirty trillion
rupiahs) and a maximum of less rupiahs).
than IDR 5,000,000,000,000 (five
trillion rupiahs); Note:
3. 10 (ten) tax years for new BKPM will publish “In Advance
investments with an investment Confirmation” which is a notification
plan value of at least IDR letter to investors regarding the
5,000,000,000,000 (five trillion fulfilment of the requirements of the
rupiahs) and maximum of less than pioneer industry to obtain a corporate
IDR 15,000,000,000,000 (fifteen income tax deduction facility for the
trillion rupiahs); investors who applied for it
QUESTION 23
GREEN LANE
Starting 2016, the government accelerates custom clearance process for imported
capital goods, aiming at speeding up project under construction. Capital goods
no longer need screening at the ports. So, it will cut the processing time from five
days to only 30 minutes.
WAGE FORMULA
Since September 2015, Indonesian government has issued several economic policy
packages, among others, to improve investment climate. We set a minimum wage
formula so investors can predict annual increase of wage, considering inflation and
economic growth.
OTHERS
We support business to reduce their production costs by cutting the price of fuel,
gas, and electricity for industry. We revised the Negative Investment List (DNI) to
be more open for foreign investment, specifically intended for industrial, creative
economy, and tourism sectors.
Investment
Related Aspects
40
FAQ - FREQUENTLY ASKED QUESTIONS ON INVESTMENT
LABOR
QUESTION 24
QUESTION 25
QUESTION 26
Yes, based on Law of the Republic The new Social Security Agency
Indonesia No. 24 Year 2011, for Workers and/or Health (Badan
employer will have to contribute a Penyelenggara Jaminan Sosial untuk
certain share based on employee Ketenagakerjaan dan/ atau Kesehatan
monthly wage into the social security or BPJS-TK and BPJS-KS) will continue to
programme. The programme will ensure that employer takes part in the
provide economic assurance for every mandatory social security programmes
employee’s wellbeing. such as Pension Guarantee, Life
Insurance, and Work Accident Insurance.
For more information on the details directly contact BPJS for Workers at
to social security pay-out structure, http://www.bpjsketenagakerjaan.go.id/
submission of application, working and BPJS for Health at https://bpjs-
details, and latest updates please kesehatan.go.id/bpjs/
QUESTION 27
ANSWER :
QUESTION 28
QUESTION 29
Companies employing foreigners are charged USD 100 per title per
person per month (Article 23 Decree of the Minister of Manpower
No. 10 Year 2018).
QUESTION 30
E. After obtaining a visa, the foreign foreign worker also has to pay for
worker will head to Indonesia, and the visa fee.
will be granted with an Entry stamp
E. After obtaining a visa, the foreign
upon arrival.
worker will head to Indonesia, and
F. Foreign worker should report to the be granted with an Entry stamp
local immigration office where he/ upon arrival.
she domicile in Indonesia to take
F. Foreign worker should report to the
biometric and interview and also pay
local immigration office where he/
the limited stay permit fee.
she domicile in Indonesia to take
G. VITAS issued. biometric and interview and also pay
the limited stay permit fee.
VITAS which is submitted by the
foreign worker : G. VITAS issued.
A. The foreign worker submits VITAS After entering Indonesia, foreign worker
application to Indonesian Embassy/ should report to the Immigration Office
Consulates. close to their area within 7 days of
arrival to get the Limited Stay Permit
B. The foreign worker will pay for the
Card (Kartu Izin Tinggal Terbatas or
telex visa approval cost.
KITAS). The following procedures also
C. The Indonesian Embassy/ Consulates applies to the temporary foreigner
will forward the application to workers and expertise, such as :
Directorate General of Immigration specialized technician for temporary
for approval. repair work, some experts for short-term
D. When the Visa application is job position and any affiliated foreigner
approved, The Indonesian Embassy/ for specific work function.
Consulates will issue the visa. The
QUESTION 31
Employers who will employ foreign with the qualifying position occupied by
worker shall have an RPTKA. RPTKA the foreign worker
is a basis to obtain Foreign Worker
9. Employer Taxpayer Identification
Employment Permit (IMTA). In order
Number (NPWP)
to receive RPTKA, the employer must
submit an online application to the 10. Copy of valid obligatory report of
Directorate General of Manpower employment in accordance to Law of
Placement Development and Job the Republic Indonesia No. 7 Year 1981
Opportunity Expansion through the
Director of Expatriate Worker Utilization 11. Recommended position that will be
Management by enclosing: occupied by the foreign worker from
technical ministries (if required)
1. Letter detailing the reason to hire
foreign nationals Based on Presidential Regulation No. 20
Year 2018 on Foreign Workers Utilization,
2. Completed RPTKA form companies employing foreign workers in
the following positions do not need to
3. License from authorized ministry
apply for the RPTKA:
4. Article of Association of legal entity
A. Shareholder as a member of the Board
that has been legalized by authorized
of Directors or a member of the Board
ministry
of Commissioners of the employer of
5. Organizational structure of the TKA;
employer company
B. Diplomatic and consular officers
6. Letter of the employer’s domicile from at representative offices of foreign
regional government countries; or
QUESTION 32
QUESTION 33
ANSWER :
According to Article 35 of Act of the Republic Indonesia No. 13 Year 2003 about
Manpower, employer can recruit a local worker directly or through manpower
placement service providers. The manpower placement service provider shall
provide protection as from the recruitment to the manpower placement. The
employer in employing worker shall provide protection covering welfare, safety,
and physical and mental health of the worker.
QUESTION 34
ANSWER :
Note :
QUESTION 35
Is outsourcing allowed?
Yes, it is. Outsourcing is defined as 1. If outsourcing is perceived as the
obtaining goods or services by contract recruitment of workers who directly
from an outside supplier. However, conducted by the employer with
majority of the outsource workers are the status of working relationships
employed under temporary contract. are specified for certain period and
unspecified period work agreement,
Related to this, there will be 2 thus this outsourcing definition is
definitions of outsourcing : associated with the Article 56-59,
QUESTION 36
Yes. According to the Article 102 and enhancing their skills and expertise and
103 of Act of the Republic Indonesia helping promote the business of the
No. 13 Year 2003 concerning enterprise for which they work and
Manpower, workers and their fight for the welfare of their members
organizations [unions] shall perform and families. Every worker has the right
the function of performing their jobs/ to form and become member of a
work as obliged, keeping things in trade/ labour union, and a trade/labour
order in order to ensure continued, union shall have the right to collect and
uninterrupted production, channeling manage fund and be accountable for
their aspirations democratically, the union’s finances.
QUESTION 37
According to the Article 102 of Act should resolve it first through bipartite
of the Republic Indonesia No. 13 bargaining in deliberation to reach
Year 2003 concerning Manpower, consensus. In the event the bipartite
In conducting industrial relations, bargaining failed, then one or both
the government shall perform the of the parties can file their dispute
function of establishing policies, to the local authorized manpower
providing services, taking control and offices. Further information about
taking actions against any violations industrial relations dispute settlement
of statutory manpower rules and can be refered to Act of the
regulations. Republic Indonesia No. 2 Year 2004
concerning Industrial Relations
In the case of industrial relations Disputes Settlement.
dispute, employer and labor union
QUESTION 38
Yes, labors strike is regulated on the The strike shall be deemed illegal if it is
Decree of Minister of Manpower carried out:
No. 232 Year 2003. According to this
regulation, strike is an action that is a. Not as a result of failed
planned and performed together by negotiations; and/or
workers and/or by trade unions/labor b. Without any notification given
unions in order to stop or slower work. to the entrepreneur and the
Strike is a basic right of workers and/or government agency responsible for
trade unions/labor unions that is carried manpower affairs; and/or
out legally, orderly, and peacefully as a
consequence of failed negotiations. c. With a notification but the
notification is given less than 7
Failed negotiation shall refer to the (seven) days prior to the strike; and/
reaching of no agreement to settle or
industrial relations disputes because the
entrepreneur is unwilling to negotiate d. With a notification but the contents
even though the trade union/labor of the notification do not accord
union or the worker has submitted with points of Article 140 of Law
a written request for negotiation No. 13 Year 2003 concerning
twice within a period of 14 (fourteen) Manpower.
workdays or because the negotiations
QUESTION 39
LAND OWNERSHIP
QUESTION 40
ANSWER :
The investors can buy and own land in owned by other persons which gives
Indonesia for a certain period of time the rights and obligations stipulated
using the following rights: in the decision upon granting his
right by the authorized official, or
1. The Right of Exploitation (Hak in the agreement to utilize the land,
Guna Usaha or HGU) is granted for as far as it is not conflicted with the
a maximum of 25 years and can be spirit and the provision of the law.
extended for another 25 years. For
company that requires a longer The HGU, HGB, and Hak Pakai can
period, an HGU for a maximum of be owned by Indonesian citizens,
35 years may be granted. foreigners residing in Indonesia,
corporate bodies established under
2. The Right of Building (Hak Guna Indonesian Law and are based/having
Bangunan or HGB) is the right to offices in Indonesia, and foreign
build and to own a building on companies that have a representative
land which does not belong to office in Indonesia.
someone’s property for a period
of no more than 30 years and can The HGU and HGB ownerships are
be extended for a maximum of 20 allowed to change during the contract
years. period. However, Hak Pakai can only
be transferred to other parties with the
3. The Right of Use (Hak Pakai) is approval of the relevant government
the right to use and/or to collect official. Hak Pakai owned by an
the product, from land directly individual can also change hands.
controlled by the state, or land
QUESTION 41
ANSWER :
Yes, it depends on the type of the years and can be extended twice by
property: 20 years and a further 30 years).
QUESTION 42
QUESTION 43
ANSWER :
FDI companies that are property developers can buy land in Indonesia to develop
property. The status of the land is the Building Right (HGB) which will be divided
into small lots accordingly. Then, the property buyer can submit an application
to change the status of the land to Ownership Rights (Hak Milik) which is only
allowed for Indonesian citizens.
TAXATION
QUESTION 44
The basic tax obligation is Income Indonesia, and foreigners who work
Tax (Pajak Penghasilan or PPh) and earn income in Indonesia generally
which is progressive and applied must bear the same tax obligations
to both individual and corporate. as the resident tax payers. The self-
FDI companies that are located and assessment method is used to calculate
conducted business activities in income tax.
Tax rates for individual and corporate are described in the following tables:
The Tax Withholding system is used taxes. For example, employers are
in Indonesia to collect the income required to with hold income tax of
tax. If a certain item of income is the salaries paid to their employees
subject to withholding tax, the payer and pay the tax to the tax office on
is responsible for holding or collecting their behalf.
Note:
Detailed information on Income Tax should refer to Law of the Republic Indonesia
No. 36 Year 2008 regarding Income Tax.
QUESTION 45
ANSWER :
Land & Building Tax (Pajak Bumi E. Certain seeds and/or breeding stock
dan Bangunan or PBB) of goods of agriculture, plantations,
forestry, livestock, or fishery;
The owners of land & buildings have
to pay tax annually on land, buildings F. Animal feed,excluding pet food;
and permanent structures. The effective
G. Fish feed;
rates are nominal, typically not more
than one tenth of one percent per year H. Feed material for the manufacture of
(0.1%) of the asset value. livestockfeed and fish feed;
Value Added Tax or VAT I. Raw material of silverhandicrafts;
and
In normal cases, 10% VAT is applied
to imports, manufactured goods and J. Owned Simple Flat (“Rumah Susun
most services. However, in accordance Sederhana Milik”)units with changed
with the Government Regulation No. criteria such as limits on selling
81 Year 2015, the strategic certain price and income of the individual
Taxable Goods whose importation and/ purchasing the unit as regulated
or delivery is exempted from VAT are by Ministry of Finance (previously
now as follows: maximum selling price was IDR
144,000,000 and maximum income
A. Plant machinery and equipment
was IDR 4,500,000 per month and
which is used directly in the process
owner must haveTax ID number);
of generating taxable goods,
excluding spare parts, and shall use a K. Electricity, except for houses with
VAT Exemption Certificate; power above 6,600 (six thousand six
hundred) Volt-Amperes
B. Goods resulting from business
activities in the maritime and fishery Sales Tax on Luxury Goods (Pajak
sector, both capture fishery and Penjualan atas Barang Mewah or
aquaculture; PPnBM)
C. Raw hides and skins that are not These tax ranges from 10% to 75%.
tanned; The list of the tax should be referred
to The Government Regulation No. 12
D. Certain livestock;
Year 2001 jo. No. 43 Year 2002 jo. No. rate is IDR 3,000 regardless of money
46 Year 2003 and other related tax value stated.
implementation regulations.
Deemed Withholding Tax
Stamp Duty
Applicable for Trade Representative
The stamp duties nominal are either Office in Indonesia. Decree of
IDR 3,000 or IDR 6,000 on certain Directorate General of Taxation,
documents. The rate of IDR 6,000 is KEP-667/PJ./2001, states that
applicable for letters of agreement and deemed withholding tax for Trade
other letters, such as Notary Deed and Representative Office must be paid at
Land Deed including its copies. For all the rate of 0.44% out of 1% gross
documents bearing a sum of money, export value.
therate is IDR 6,000 when the value
stated in the document is more than This is only applicable to foreign
IDR 1 million, and IDR 3,000 when the taxpayers who have no double-tax
value is between IDR 500,000 and IDR treaty agreement. For more information
1 million. Below IDR 500,000 is not of the payment details, please refer to
subject to stamp duty. For cheques, the Directorate General of Taxation Circular
No. SE-2/PJ.03/2008.
Note:
Beside tax, local government in the provinces or cities usually apply retribution for
some business sectors and it varies from region to region.
IMMIGRATION
QUESTION 46
Yes, foreigners who will travel to port may ask the passenger to show
Indonesia should apply for a visa any neccessary documents (such as
from the Indonesian Embassy in their hotel reservation and other financial
respective countries unless they come evidences).
from one of the visa-exempt countries,
Regarding the purpose of visit, ASEAN
or the countries that qualify for Visa on
Countries Nationality Visitors are able to
Arrival or VoA (Visa Kunjungan Saat
visit Indonesia without any visa for the
Kedatangan).
purpose of official duties, education,
All visitors must hold a passport valid tourism, business, government and
for 6 months from the date of arrival social culture purpose. They may stay up
and have a valid return ticket. The to 30 days without renewal or convert
immigration entrance officer at the to other types of visas.
QUESTION 47
Based on Presidential Regulation No. 21 Year 2016 regarding Visa-Free Visit, 169
recipient countries can visit Indonesia without visa, with a stay permit for 30 days
and cannot be extended.
QUESTION 48
ANSWER :
QUESTION 49
All the applicants for any types of D. A guarantee of the available funds
visa must comply with the general to cover living expenses while in
requirements below: Indonesia (e.g. the last 3-month
bank statement or a traveller’s
A. Provide a complete and signed visa cheque).
application form. The application
form is available in the Embassy, E. 2 (two) photos (with colour
or could be downloaded from the background, passport size).
website of respective embassy of
F. The applicants are not in the
intended application.
immigration’s alert list, and have to
B. The actual passport and a copy. come in person.
QUESTION 50
In regards to visa application fees, the currency fluctuation of visa fees are adjusted
accordingly to each country’s currency. For this reason, each visa applicant is
advised to contact directly to the Indonesian Embassy or Consulates located in the
respective country. In the case where Indonesian Government representative is not
available at the applicant resident city or area, please contact Ministry of Foreign
Affairs of the Republic of Indonesia at the following link: www.kemlu.go.id.
QUESTION 51
The applicant can apply online by going to Visa Section on the website www.
imigrasi.go.id, or come directly to Directorate General of Immigration.
Any foreigners intending to work and stay in Indonesia must get Limited Stay Visa
(VITAS). Further information about VITAS can be found in the answer for question
no. 30.
QUESTION 52
Yes, you can bring your family to Indonesia. They should get Limited Stay Visa
(VITAS) and Limited Stay Permit Card (KITAS) by following the same procedures as
mentioned above.
QUESTION 53
TRADE
QUESTION 54
QUESTION 55
There are restrictions and limitations to export and import some specified products
and commodities. Please refer to the website of Indonesia National Single Window
(INSW) as follows, http://eservice.insw.go.id
QUESTION 56
ANSWER :
QUESTION 57
2. SPPB
QUESTION 58
http://www.beacukai.go.id/btki.html
The rate information requires the importer to identify the exact Harmonized
System (HS) Codes for their imported products. HS Codes can be found on
Indonesia National Single Window (INSW) website, as mentioned in the previous
question.
QUESTION 59
ANSWER :
QUESTION 60
All food and drug products such as The registration must be done by
drug, traditional medicine, cosmetics, the local company, local agent or
food supplement and processed food, distributor before the products get
must fulfilll all safety requirements cleared to Indonesian customs.
to enter the Indonesian market. This
imported food and drug registration is To import drug and food, the importer
regulated under Indonesian National must apply Letter of Import (Surat
Agency of Drug and Food Control Keterangan Impor or SKI) to the Head
(BPOM), one of the provisions is the of BPOM.
Regulation of the Head of the Agency The procedure to obtain SKI Border and
of Drug and Food Control Republic of Post Border are as follows:
Indonesia No. 30 Year 2017 concerning
Importation Control of Drug and Food
into the Territory of Indonesia.
Government
Support
72
FAQ - FREQUENTLY ASKED QUESTIONS ON INVESTMENT
ANSWER :
Website : www.esdm.go.id
Ministry of Agrarian and Spatial Planning of the Republic of
Indonesia (Kementerian Agraria dan Tata Ruang RI) Jalan
Sisingamaraja No. 2, Jakarta Selatan, DKI Jakarta 12110
Tel : +6221 739 3939
Email : humas@bpn.go.id
Website : www.bpn.go.id
Ministry of Law and Human Rights of the Republic of
Indonesia (Kementerian Hukum dan HAM RI) Jalan H.R.
Rasuna Said Kav. 6-7, Jakarta Selatan, DKI Jakarta 12940
Tel : +6221 525 3004
Website : www.kemenkumham.go.id
BKPM
QUESTION 62
What is BKPM?
ANSWER :
Referring to Law of the Republic Indonesia Number 25 Year 2007, The Indonesian
Investment Coordinating Board (BKPM) is a Non-Ministerial Agency mandated to
coordinate the implementation of investment policy through overcoming barriers
of investment activity, increasing the certainty of providing incentive facility and
strengthening the role of investors.
QUESTION 63