Economic Zone Opportunity

Special Economic Zones

Special Economic Zones (SEZs) are developed by preparing areas with geo-economic and geo-strategic advantages, and they function to accommodate industrial, export, import, and other economic activities that have high economic value and international competitiveness.

Sectors Opportunity in Indonesia SEZ

Fiscal Incentive

Tax Holiday

Applies to income received or earned from the Main Activities carried out, as regulated in PMK 237/2020 in conjunction with PMK 33/2021 and Perdenas KEK No. 2/2021.

100% Corporate Income Tax reduction for 10 years
50% Corporate Income Tax reduction for 2 years

Tax Allowance

Applies to activities outside the main activities of the SEZ, as regulated in PMK 237/2020 in conjunction with PMK 33/2021.

1. 100% Corporate Income Tax reduction for a period of:

10 years for an investment value of IDR 100 billion to less than IDR 500 billion
15 years for an investment value of IDR 500 billion to less than IDR 1 trillion
20 years for an investment value of more than IDR 1 trillion

2. 50% Corporate Income Tax reduction for a period of 2 years

3. Facilities (for other Activities, investment value below IDR 100 billion): Tax Allowance

Value Added Tax (VAT) and Luxury Goods Sales Tax (LGST)

Not imposed on:

Delivery of certain tangible taxable goods from bonded logistics storage areas (TLDDP), free zones, and bonded warehouses to Business Entities and/or Business Actors;
Import of certain tangible taxable goods into SEZs by Business Entities and/or Business Actors;
Import of consumer goods into tourism SEZs by Business Entities and/or Business Actors; and other similar cases.

Import Duty

Exempted for purposes of SEZ development or expansion.
For SEZs that have completed development, import duties are exempted for consumer goods, and duty deferment is available for business activities within the SEZ.
For monitoring purposes, part or all of an SEZ may be designated as a Customs Area.

Excise

Exempted for raw materials or auxiliary materials used in producing final goods that are not subject to excise.

Import-Related Taxes

No Import Duty is collected on capital goods imported for SEZ development or expansion.
For SEZs that have completed development, Import-Related Taxes are not imposed.
Import Duty rate of 0% applies for goods with a minimum local content (TKDN) of 40%.

Goods subject to import and export regulations may be granted exemptions and/or relaxations.

Facilities in Special Economic Zones

1.Taxation, Customs, and Excise

Facilities and conveniences related to Corporate Income Tax, VAT, Luxury Goods Sales Tax, Import Duty, Import Taxes, and Excise
Application of Corporate Income Tax reductions on income from main activities
Exemption from VAT and Luxury Goods Sales Tax for certain activities
All SEZs may be designated as Customs Areas, with duty or excise deferral/exemption
Additional tax facilities in Tourism SEZs
Reduction or exemption of regional taxes/levies for Business Entities/Business Actors in SEZs of at least 50%

2.Goods Traffic

Import of goods into SEZs is not yet subject to import restrictions or trade regulations
Imported goods used in SEZs are not yet required to comply with Indonesian National Standards (SNI)- Implementation of import and export regulations is carried out through a nationally integrated electronic system

3.Manpower / Employment

Approval and extension of Foreign Manpower Utilization Plans (RPTKA) in SEZs- Extension of Work Permits for Foreign Workers (IMTA) in SEZs
Establishment of a special Tripartite Cooperation Institution

4.Immigration

Visa on Arrival (VKSK) valid for 30 days, extendable up to 5 times for 30 days each
Multiple-entry visas for foreign nationals

5.Land and Spatial Planning

Implementation of land acquisition
Land services and special procedures for granting, extending, and renewing land rights
Facilitation and coordination of spatial planning

6.Business Licensing

Issuance of business licenses for Business Entities and Business Actors in SEZs by the SEZ Administrator through the OSS system
Business licensing is implemented based on a risk-based approach