Indonesia Unveils Priority List for Investors, Signs Treaty with Singapore

March 2021

The Indonesian government has just unveiled a priority list aiming to lure investors with fiscal & nonfiscal incentives and the removal of restrictions on foreign investment. The priority investment list contains high-tech, pioneering, export-oriented, research-oriented, capital-intensive, labor-intensive industries and national strategic projects.
The types of fiscal and nonfiscal incentives provided cover tax allowances, tax holidays and relaxed licensing procedures. Businesses allowed to take advantage of tax allowances range from e-commerce to small-scale power plants. Oil and gas refineries, vaccine manufacturers, electric vehicles (EV) and EV battery manufacturers are eligible for tax holidays. While the government’s negative investment list (DNI) restricts 20 sectors from foreign investors, one of those sectors, alcoholic beverages, is now open for investment in certain areas such as Bali and North Sulawesi. Also, the minimum requirement of IDR 10 billion (USD 700,000) for FDI is exempted for startups in special economic zones.
In March 2021, Indonesia signed a bilateral investment treaty (BIT) with Singapore. Under the treaty, investors from both countries will enjoy specific legal protection, such as access to international arbitration, thus safeguarding investments and boosting investors’ confidence. Indonesia received USD 6.5 billion and USD 9.8 billion worth of investment from Singapore in 2019 and 2020, respectively.
(Source: The Jakarta Post)

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