Investing in Indonesia

Investing in Indonesia

Indra Darmawan

Director of International Business Cooperation , BKPM

Indonesia Investment Forum | Taipei, 5 August 2016

The Investment Coordinating Board of the Republic of Indonesia

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Today’s Challenges

Global economic volatility

Consumers’ purchasing power

Threat of layoffs

Economic slowdown


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Economic growth accelerates

Low inflation

Higher consumers’ confidence index

Lower interest rate

Indonesian Macroeconomic


4 Construction of Nickel Smelter to produce stainless steel in Morowali, Central Sulawesi

43.6 billion US dollars (IDR 545.4 trillion)

Investment realization

+17.8% Investment realization

growth (y/y)

148.2 billion US dollars (IDR 1,852 trillion)

Investment commitment

+45% Investment

commitment growth (y/y)

Growing Investment in Indonesia Investment Progress

21.4 billion US dollars (IDR 298.1 trillion)

Investment realization

+14.8% Investment realization

growth (y/y)

358.1 billion US dollars (IDR 4,976 trillion)

Investment commitment

+80% Investment

commitment growth (y/y)

2015

S1 2016


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Taiwan’s Promising Investment

52.6% Investment

realisation ratio in 2010-S1 2016

Manufacturing

Industry

Largest sector, comprising 77% in 2010-Q2 2016

1.61 Billion US dollars

(IDR 15.5 trillion rupiahs) Investment realization

in 2010-Q2 2016

Investment Performance 2010 – S1 2016

2010, 433 2011, 2,189

2012, 5,823

2013, 3,806

2014, 1,234

2015, 1,349

Q2 2016, 646

2010, 1,237

2011, 3,685

2012, 4,280 2013, 2,614

2014, 16,166

2015, 2,084

Q2 2016, 1,309

Realization Plan In IDR Billion


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Investment Target 2016

Investment as Driver of Economic Growth

BOOST THE ECONOMIC GROWTH

• To achieve investment realization of Rp 594,8 Trillion

• To achieve investment realization in manufacturing sector of Rp 313,5 Trillion or 52,7% contribution

• Boost investment for export oriented, import substitution, labor intensive and downstream industries

ENCOURAGING MANPOWER

EMPLOYMENT

• To achieve realization of employment of 2 million people

• Increase the investment realization for labor intensive sector such as textile and footwear

REDUCING THE GAP BETWEEN REGIONS

• The proportion of investment realization outside Java should reach Rp. 292.2 trillion or 49.1% of the total investment realization


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IMPROVING INVESTMENT LICENSING SERVICES

ASSISTING INVESTMENT REALIZATION

PROACTIVE AND TARGETTED MARKETING INVESTMENT

IMPROVING INVESTMENT CLIMATE

ENSURING THE BENEFITS FOR THE PEOPLE (People Oriented Investment)

BKPM Plan 2016

3 Policy Directions and 5 Strategies of BKPM

PRO GROWTH

PRO EMPLOYMENT

ADDRESSING GEOGRAPHICAL DISPARITIES


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One-Stop Service

(PTSP) at BKPM

One place

22 ministries integrated

3-hour

Service

Direct Construction

91% Regional PTSP formed. 61% regional PTSP

implement e-licensing.

Industry, power, oil & gas, tourism at one place

All sectors

167 permits are delegated

to BKPM One-Stop Services

Investment Service Reforms


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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 Service Available 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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Direct Construction No 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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Central Java KI Kendal KI Bukit Semarang Baru KI Wijayakusuma

East Java Java Integrated Industrial & Port Estate

South Sulawesi KI Bantaeng

Banten Modern Cikande Industrial Estate

KI Terpadu Wilmar Krakatau Industrial Estate Cilegon

West Java Bekasi Fajar Industrial Estate

KI Delta Silicon 8 Karawang Internasional Industrial City

Suryacipta City of Industry GT Tech Park

North Sumatra KI Medan

14 Industrial Estates for Direct Construction

Priority Investment Service

Java, Sumatra, Sulawesi are Indonesia’s most

populous islands

WHERE ON EARTH


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Easing export & import Companies 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

Various sectors Oil and gas, mining, textile, chemical, food, cosmetics, also automotive industries

11 strategic locations In Java, Bali & Kalimantan islands

Bonded Logistics Centers

Java, Bali & Kalimantan are three

of main islands.

WHERE ON EARTH

Policy Reforms


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© 2016 by Indonesia Investment Coordinating Board. All rights reserved

Green Line acceleration facility

Import Facility for Capital Goods

Acceleration and assurance of custom clearance process

Projects in the construction phase can begin operation immediately

Capital goods do not require screening

Valid since 14 December 2015

Specifically for Companies: • In the construction phase • Obliged in reporting their quarterly investment activities (LKPM) • Have obtained a recommendation from BKPM

Improvements of Investment Service


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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.

Negative Investment List 2016

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 ministries, agencies, or regions.

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 partnership; 3. Open with conditions.


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More open to foreign investments

Investment Guideline 2016

100% FDI Distributor affiliated with

production

67% FDI for distributor not affiliated with

production

100% FDI Raw material for Pharmacy

From previously open to 85% FDI

100% FDI E-Commerce

in partnership with SMEs

From previously closed to FDI

100% FDI Marketplace

For min. Investment of IDR 100 billion (USD 8 million).

Open 49% FDI for investment

< IDR 100 billion

100% FDI Film

Industry

Production, post-production, distribution, projection

100% FDI Tourism

Sports center, restaurant,

bar, cafe

67% FDI Transport

infrastructure & support services

Including cargo handling, air

transport, renting & leasing


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OSS One-Stop

Service

One-stop Shop for Investment

3-hour Service

MO Marketing

Officers IRO

Investors Relation Officers

22 ministries & agencies. Licencing at one place: industry, power, oil & gas, tourism, etc.

Permits to start business, to work & to import capital goods. Land-booking letter.

Dedicated to Taiwan. Consultation & facilitation services.

Dedicated to each region in Indonesia. Monitoring & facilitation to realize investment.

Indonesia Investment Promotion Centre (IIPC)

Taiwan Desk

Consultation & facilitation services in Mandarin.


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Badan Koordinasi Penanaman Modal

(BKPM)

Indonesia Investment Coordinating Board

Jln. Jend. Gatot Subroto No. 44

Jakarta 12190 - Indonesia

t . +62 21 525 2008

f . +62 21 525 4945

e . [email protected]

www.bkpm.go.id

Xie xie Terima Kasih

Head of BKPM’s Marketing Officer Team Mr. Ikmal Lukman, [email protected]

Director in charge of Marketing Officer for Taiwan Mr. Husen Maulana, [email protected]

Investment Marketing Officer for Taiwan Mr. Delfinur Rizky Novihamzah, [email protected]

Director Indonesia Investment Promotion Center in Taipei Mr. Mohammad Faizal, [email protected]

Taiwan Desk in Jakarta Mr. Irvan Wu, [email protected]

Documents

Investing in Indonesia