Investing in INDONESIA2016/12/01 · Sea Passenger (million) 37 44 Goods (million tons) 856 1,040 Rail Passenger (million) 203 278 Goods (million tons) 19 33 Air Passenger (million)

INDONESIA INVESTMENT COORDINATING BOARD

© 2016 by Indonesia Investment Coordinating Board. All rights reserved

Saribua SiahaanDirector

Investing in

INDONESIAIndonesia Investment Seminar| Tokyo, December 13th, 2016

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Perkenalan, Hormati Konjen Osaka atau yang mewakili Hormati Pak Kinoshita Panitia, Reed MIDEM Tokyo Ofiice Refresentative Hadirin peserta undangan semua First of all, I would like to express my sincere appreciation and gratitude to the organizer mipim Japan, for organizing this very important event. Thanks to all distinguished participants, I really appreciate it. I hope this materials can give you valuable information, about investment climate and opportunities in Indonesia.

The Investment Coordinating Board of the Republic of Indonesia2

Appealing

INDONESIAThe new Investment Guidelines 2016 (Presidential Regulation No.44/2016):

• More open to investment

• Simpler investment procedure

• More protection for investors

• Easier to understand

WHEREON EARTH

Economic reforms: Openness &

Competitiveness

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This regulation is very important for an Investor, because it’s gate, should be known before doing business in Indonesia. It’s called Negatif List for Investment. It has been published on May 2016. Generally this regulation, informs : More open to investment, simpler investment procedure, more protection for investors and easier to understand.


More open to investment• More business fields open to 100% FDI.• Less business fields open with condition,

reduced from 664 to 515.• More business fields open to foreign

majority share ownership (>50% FDI).• Less business fields reserved for domestic

investment, reduced from 66 to 51.

Simpler investment procedure• No more technical approval from other

ministries or institutions.• No more conditions related to regional

government.• Special Economic Zones (SEZs) are

excluded from the negative list, except for business fields allocated for SMEs.

Investment Guidelines 2016

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More open to investment, means: There many projects that Javaness investors become majority, Simpler investment procedure, means: Easy to get license, The Investors just come to BKPM office in Jakarta, and we can provide it by one line system.


More protection for investors• Facilitation of the National Team for the

Enhancement of Exports and Investments (Timnas PEPI) in monitoring, evaluation and issue settlement.

• Prohibition of the establishment of contrary regulations issued by regions, ministries, or agencies.

Easier to understand• Maximum share of FDI are simplified and

in line with the Company Law in Indonesia.• Three categories of business fields:

1. Closed for investment;2. Allocated for SMEs and partmership;3. Open with conditions.


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More Protection for Investor means: Facilitation of the National Team for the Enhancement of Exports and investment We also have Debotecnecking unit in BKPM, so if you have a Problem in your business, BKPM side can facilitate you to overcome the problem. Easier to Understand, Maximum share of FDI, are simplifeld and in line with company law in Indonesia


Reducing logistic costsInvestment Guidelines 2016

100% FDIDistributoraffiliated with

production 67% FDI for distributor

without affiliation

67% FDITransport

infras. & servicesIncluding cargo

handling, air transport, renting & leasing

2010 2014

SeaPassenger (million) 37 44

Goods (million tons) 856 1,040

RailPassenger (million) 203 278

Goods (million tons) 19 33

AirPassenger (million) 58 85

Goods (million tons) 0.6 0.8[Source: Indonesian Statistics Center, 2016]

100% FDICold

storageFrom previously

33% FDI

67% FDIWare-

housingFrom previously

33% FDI

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Some fields of business rules before small and is now more open, such as : Cold Storage previously 33% to 100% Foreign Investment, then Warehousing previously only 33% now allowed up to 67%, Service services in the field of transport is not there now allowed to 67%. These shows that Indonesia regulations currently more open to foreign investment.


Stimulating retailsInvestment Guidelines 2016

67% FDIwith 400-2,000 m2

of retail areaFrom previously

closed to FDI.Requirements:• Licence from Ministry of

Trade;• Located inside a

shopping mall;• Outlet store expansion

based on export performance.

Large & Growing Market• In Southeast Asia, Indonesia represents 41% of

its 618 million population and 34% of its 190 million middle-income class.

• By 2030, there will be 135 million members of the consuming class in Indonesia.

• This offers USD1.3 trillion of market opportunity in consumer services.

[Source: McKInsey, 2012. BCG, 2015. ]

Department Store

100% FDIwith >2,000 m2

of retail area

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Other field, which also began ogled by Japanese investors is in the field of Investment Opportunities Department Store, where it is possible to achieve 100% foreign stranger, to extensive efforts of more than 200 M and 67% for the business area between 400 meters to 2000 meters.


Developing film industryInvestment Guidelines 2016

Large & Growing Market• By 2030, 135 million consuming class offer USD105 billion market in entertainment.• Box office market is increasing, the 16th largest in the world (USD300 million).Big Opportunity• 0.4 screen per 100,000 population, compared to China (1.8) and India (0.9).• Screens are not well distributed, 87% of screens are located in Java Island.Promising Talents• More than 50 companies in film making and 30 companies in animation.• More Indonesian films get global recognitions and attract millions of viewers.[Source: McKinsey, 2012. MPAA, 2015.]

100% FDIFilm Industry

Production, post-production,

distribution, exhibition

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Film industry sector is also now open to foreign investment, the current investors have already seen the development of the animation industry,��Based on our data, of the 50 companies, there are 30 companies engaged in animation, so also we offer to Japanese investors. If you are interested to see more about this, IIPC Tokyo office is ready to facilitate it.


Improving skillsInvestment Guidelines 2016

67% FDISkill trainingFrom previously open to 49% FDI

Large & Young Population• 60% of Indonesia’s 255 million population are

in working age.• In 2020-2030, the dependency index will be

the lowest (demographic bonus).

Growing Vocational Education50% enrolment in technical and vocational education schools in 2015, up from 43% (4 million students) in 2012.

Increasing Budgets• Government’s annual budget for education

has been increasing exponentially since 2008.• From USD12.7 billion (2008) to USD33.4

billion (2015).[Source: Oxford Business Group, 2015]

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Experts in the field of development, Indonesia also currently has a variety of Skill Points to increase the workforce,�For example, the Training Center, in this place, the workforce in the learner to have specialized skills in one area, so when the company takes the field, it is easy to recruit, according to the company's needs. And this location there are several areas in Java


Boosting Tourism

67% FDI•Museum & historical

site management •Travel bureau•Catering•1-2 star hotel•Billiard, bowling, golf•Art gallery & theatre•Karaoke•Meetings, Incentives,

Conferencing, Exhibitions (MICE)

•Natural tourist attraction

100% FDI•3 or more star hotel •Restaurant, bar, cafe•Sport center•Swimming pool


*) Projection. [Source: Ministry of Tourism RI, 2016]

2014 2015 2019*

Contribution to GDP 9.3% 10% 15%

Foreign tourists (trips) 9.4m 10.4m 20m

Domestic tourists (trips) 251m 255m 275m

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Similarly, the tourism sector, in the new regulations, Indonesian government provides substantial opportunities especially in the field of Hospitality,� If you see in this slide, informed that for 3 stars hotel, the Foreign Investment can until 100%, So this is an opportunity for the investor.


Toba Lake

Tanjung Kelayang

Kepulauan Seribu

A. SEZ Tanjung Lesung

Borobudur

Bromo Tengger Semeru

B. SEZ Mandalika Komodo

WakatobiC. SEZ Morotai

Investment Opportunities

10 National Strategic

Tourism Areas

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During this time may be the Japanese, just know, Bali and Borobudur,�We need to convey that Indonesia has many tourist areas are not inferior to Bali.�There are ten tourism locations that the Indonesian government wants to develop�namely : Lake Toba, Tanjung Lesung, Tanjung Kelayang, Mount Bromo, Mandalika, Thousand Islands, Komodo, Morotai, Wakatobi,� You may see Mr. Google, and if you want to get more information, we are ready to be invited and discuss about that.


Improving

INDONESIAOne-stop service for investment

3-hour service and direct construction

Simplification of licensing

Pro-investment policy reforms

Bonded logistics centers

34 provinces & 514 regions,

decentralized

WHEREON EARTH

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In this slide, we want to explain related to the breakthrough by the Indonesian government, where investors are now easier and faster to get a license to do business. Government provides some ways namely : One Stop Service, 3 hours service and direct contruction

One-Stop Service

(PTSP) at BKPM

One place

22 ministries integrated

3-hourService

DirectConstruction

91%Regional PTSP formed. 61% regional PTSP

implement e-licensing.

Industry, power, oil & gas, tourismat one place

All sectors

167 permits are delegated

to BKPM One-Stop Services

Investment Service Reforms

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One of the breakthroughs made by President Jokowi is to facilitate the investment license. there are currently 22 Ministries / Agencies have delegated authority to BKPM. So investors are not difficult to take care of its investment license, Investor enough to come alone to the BKPM. All permissions only in the process in one place, namely in Jakarta BKPM.�Today the licensing process can be done through the online system, so that the process becomes faster,


BKPM

• Arrive at One-stop Service at BKPM directly from the airport.

• Consult with Director of Investment Service.

• Submit the required documents & data.

3-hour ServiceAvailable for investors with minimum

investment of IDR 100 billion (USD 8 million) and/or employing 1,000 local workers.

8 documents obtained

Wait at the lounge while documents are processed by BKPM, in-house notary, ministries, & other government institutions.

Obtain eight documents & letter of land availability within three hours to start your business.

Certainty to work• RPTKA / Employment plan• IMTA / Working permit

Certainty to start a business• Investment license• Certificate of incorporation• NPWP / Tax registration• TDP / Company registration

Certainty to import capital goods• APIP / Import identification• NIK / Customs registration

Accurate land Information• Letter of land availability


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Here is the breakthrough we've done, where in a period of 3 hours, investors can already get 8 license.�Only requirements:�The minimum investment value of 100 billion rupiah or plan use of the Indonesian workers of 1000 people.�We are very happy because there has been Japanese companies take advantage of this permission. So ladies and gentlemen if you want to know how to get this facility, please do not hasitate to discuss with us, IIPC Office in Tokyo is ready to help.


Direct ConstructionNo Requirements

• No minimum investments or workers is required. • Available for selected industrial parks. • Construction permits can be obtained in parallel

with construction process. Investors can directly start their project construction before obtaining construction permits. This service is

supported by both Central and Regional Governments.

Obtain investment licence at One-stop Service (PTSP) at national or regional level.

• Survey a land within selected industrial parks.

• Acquire the land for your industry.

• Start the construction of your project. No other permits are required.

• Apply for building construction permit & environmental permit, in parallel with construction process.


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Direct Construction namely: The Investors can directly start their project construction before obtaining countruction permits, this service is supported by both Central and Regional Government. The obtain investment license at one stop Service (PTSP) at National or regional level; Survey a land within selected Industrial parks; Acquire the land for your Industry; Start the construction of your project No other permit are required; Apply for building construction permit and environmental permit, in parallel with construction process.


Pro Investment Policy

Projectable Wage System

Setting Provincial Minimum Wage

regulation. Formula to ensure stable and projectable wage

adjustments.

Policy Reforms

Lower Fuel & Electricity Prices

Lower retail fuel costs, gas & electricity prices for factories & qualified

industries.

ImprovedEase of

Doing BusinessMore certain, simpler,

faster, and cheaper

Tax IncentivesFree VAT for transport

industries, including spare parts. Income tax (PPh21)

incentive for labor intensive industry.

Acceleration of Land Licensing

Simplifying spatial license& land accomodation.

Speeding up land registration. Electronic

system.

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Indonesian government has done some ways such as :�Regulate labor issues, and then the government also provides accelerated licensing process especially in the field of land. Tax incentives, etc. So the ease of doing business in Indonesia can be performed well, and the investment climate is conducive. Based on data from EODB 2012-2016, Indonesia improves from number 120 become 109. it mean’s, better than previous. For the next year, Indonesia target become number 40. We realize that not easy to get number 40. But we will try as much as we can. That why, Ease of doing business in Indonesia, is one of the way to make it come true. Such as : One Stop Service, 3 hours lisence, on line sytem, So the lisence will get, Easier, Faster, and Integrated


Easing export & importCompanies can store their export/import products and obtain customs, tax, and other facilities

Improving logistics distribution • For domestic & regional market• Cheaper storage, freight and port handling costs• Bring the products closer to consumers

11 locationsIn Java, Bali & Kalimantan

Bonded Logistics CentersPolicy Reforms

Java, Bali & Kalimantan are three

of main islands.

WHEREON EARTH

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As you know that Indonesia is currently focused on building infrastructure, one of the priority sectors that want to build is a Marine.�The Indonesian government to invite foreign investors to see the potential in this sector, the government is focusing on at 11 locations on the island of Java, Bali and Kalimantan.�Business development objectives in this sector are: to facilitate the affairs of export and import goods, develop distribution logistics field.


New Seaport in Wasior, Papua Province (in picture) was finished in April 2016.

New seaportsto be finished by 2019163

Infrastructure Development

Wasior, West Papua

WHEREON EARTH

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Until the year 2019, Indonesia will also build 163 New Seaports in Indonesia, from Sumatra to Papua. It’s just info for you, and For the existing companies, besides doing your business, please take a research about this opportunity, and if you want to get more information, Our Office IIPC-Tokyo is ready to help you.


New Mopah Airport in Merauke, Papua Province (in picture) is finished in 2015.

New airportsto be finished by 201915


Merauke, Papua

WHEREON EARTH

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It is one of the New Airport in Merauke, Papua, which is planned to be completed in 2019. We believe, if this project has finished and can run well, so many visitors will come to see the potential in Papua.


New toll-roadsto be finished by 20191,000 km

Progress of Trans Sumatra toll road (in picture). Until 2019, 119 miles of toll-road will be built in Sumatra.


WHEREON EARTH

Sumatra, the second most

populous island

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It also is a construction project of New Toll Roads along 1,000 km, which will be completed in 2019. it is a picture of the President who is reviewing the project directly. This is evidence of the seriousness of the government in building infrastructure.


New railwaysto be finished by 20193,250 km

Progress of Trans Sulawesi railway (in picture). Trans Sulawesi (145 km - Phase I) Makassar to Pare-pare (145 km) will be finished in 2016.


WHEREON EARTH

Sulawesi, the fourth most

populous island

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It ‘s also New Railways construction project along 3,250 km, which will be completed in 2019. it is a picture of the President who is reviewing the project directly. This is evidence of the seriousness of the government in building infrastructure.


New railwaysto be finished by 20193,250 km

Jakarta MRT (21.5 km – North/South) will be finished in 2017 (in picture). Progress 38% per January 2016.


WHEREON EARTH

Jakarta,the capital city

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It’s also New railways development projects along the 3,250 km, which will be completed in 2019. This project was also reviewed directly by the President. It shows evidence of the seriousness of the government in building infrastructure


New dams to be finished by 201949

Jatigede Dams which irrigates 90,000 farmlands in West Java is finished in 2016 (in picture).


WHEREON EARTH

West Java, one of concentrations of

farmland

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It’s also 49 New dams construction project that will be completed in 2019. This project was also reviewed directly by the President of spaciousness. It shows evidence of the seriousness of the government in building infrastructure


Indonesia Investment

Promotion Centre (IIPC) Tokyo

Fukoku Seimei Building 16F2-2-2, Uchisaiwai-cho,

Chiyoda-ku, Tokyo 100-0011 Japan

t . +81 3 3500 3878

f . +81 3 3500 3879

e . [email protected]

www.bkpm.go.id

Thank YouTerima Kasih

Director Indonesia Investment Promotion Center in TokyoMr. Saribua Siahaan, [email protected]

Deputy Director Indonesia Investment Promotion Centre in TokyoMr. Arismunandar, [email protected]

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Conclucion The Government of Indonesia with a population of 250 million people we are being upgraded by economic conditions, especially in infrastructure and proverty. To support this, the government has issued regulations related to the Negative List for Investment, in this regulation, the government provides a great opportunity for investors so they can be in the majority.�Investment Opportunities in Indonesia, not only on the island of Java alone, there are still many opportunities in other islands, such as Sumatra, Kalimantan, Sulawesi and Papua, investors could see this opportunity, and if you want more detailed information, Our office IIPC-BKPM Tokyo ready to be invited to the discussion.�So do not hesitate to invest in Indonesia, your business will be growing and profitable.

mailto:[email protected]

Documents

Investing in INDONESIA2016/12/01 · Sea Passenger (million) 37 44 Goods (million tons) 856 1,040 Rail Passenger (million) 203 278 Goods (million tons) 19 33 Air Passenger (million)