PROGRESS OF INVESTMENT PERFORMANCE AND CLIMATEINDONESIA€¦ · · 2015-11-03PROGRESS OF...

INDONESIA INVESTMENT COORDINATING BOARD

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PROGRESS OF INVESTMENT PERFORMANCE AND CLIMATE

INDONESIA

BKPM, Jakarta, November3th 2015

The Investment Coordinating Board of the Republic of Indonesia

2

1. 2015(Jan –Sept 2015): Investment Realization Progress Investment Target

2. Investment Opportunities

3. The Simplification Of Investment Licensing Through One Stop Service And Investment Permits 3 Hours

4. Improvement of Investment Climate and Policy Packages I,II,III

5. Conclusion

Updates from Indonesia Jan –Sept 2015

Contents


3





5. Conclusion


Part One


4

InvestmentTarget in Indonesia

Investment Realization TargetBased on Capex, not including financial, oil & gas sectors

2015-2019

Jakarta


5

Investment Performance in Indonesia

Investment RealizationBased on Capex, not including financial, oil & gas sectors

2015(Jan-Sept)

IDR 222.8 T(USD 29.4 B)

IDR 400 T(USD 33.6 B)*

+16.7%(y-o-y)

Total FDI & DDI

67% FDI, 33% DDI

Total Foreign Direct Investment

(Ranked based on total Capex, in USD million)

2014 (Jan –Sept)

2015 (Jan –Sept)

Rank Business Field TotalGrowth(y-o-y)

1 Mining 3,107 -18%

2 Transport, storage & telecom 2,816 0.4%

3Metal, machinery & electronic ind.

2,127 37%

4Motor Vehicles & Other Transport Equip. Industry

1,645 2.7%

5 Electricity, Gas & Water Supply 1,636 139%

Others 10,005 -11%

Total 21,337


6Source: BKPM, 2015.

Rank Country 2010 2011 2012 2013 2014Q1 – Q3

2015Total

1 Singapore 5,565 5,123 4,856 4,671 5,832 3,551 29,599

2 Japan 713 1,516 2,457 4,713 2,705 2,495 14,598

3 United States 931 1,488 1,238 2,436 1,299 653 8,246

4 South Korea 329 1,219 1,950 2,205 1,127 1,002 7,832

5 Malaysia 472 618 530 711 1,776 2,917 7,025

6 Netherlands 608 1,354 967 928 1,726 908 6,492

7 British Virgin Islands 1,616 517 856 786 624 670 5,069

8 United Kingdom 276 419 934 1,076 1,588 444 4,737

9 Mauritius 23 73 1,059 780 541 34 2,509

10 Hong Kong, PRC 566 135 310 376 657 416 2,461

Total (Top-10 Countries) 11,099 12,462 15,156 18,682 17,876 13,090 88,568

12 China 174 128 141 297 800 406 1,945

13 Taiwan 47 243 647 403 115 96 1,551

Total (90 Countries) 16,215 19,475 24,565 28,616 28,530 21,337 131,335

Investment Performance

Total FDI Realization by CountryBased on Capex (USD million) in 2010-Q III2015, not including financial, oil & gas sectors


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Rank Business Field 2010 2011 2012 2013 2014Q1 – Q3

2015Total

1Motor Vehicles & Other Transport Equip. Industry

133 465 1,510 3,001 1,261 1,131 7,500

2Metal, Machinery & Electronic Industry

158 306 459 580 513 329 2,345

3Chemical and Pharmaceutical Industry

5 430 65 172 126 43 841

4Real Estate, Ind. Estate & Business Activities

0 0 38 72 71 423 604

5 Food Industry 85 39 46 136 138 84 528

Others 331 276 338 753 597 485 2,780

Total 713 1,516 2,457 4,713 2,705 2,495 14,599

Total 2010-Q3 2015Plan: USD 30,4 billionRealization: USD 14.6 billion

Investment Performance

Japan’s FDI RealizationBased on Capex (USD million) in 2010-Q32015, not including financial, oil & gas sectors

Group of sectors

RankEconomic Corridor

2010 2011 2012 2013 2014Q1 – Q3

2015Total

1 Java 689 1,450 2,205 4,643 2,638 2,268 13.891

3 Sumatra 14 17 95 11 5 187 329

2 Kalimantan 2 0 153 45 50 38 289

4Bali & Nusa Tenggara

8 45 4 8 11 1 77

5 Sulawesi - 1 1 5 2 1 10

6Maluku & Papua

- 3 - - - - 3

Total 713 1,516 2,457 4,713 2,705 2,495 14,599

Realization by sector Realization by location

Primary1%

Secondary87%

Tertiary12%

1,625

3,414

9,778

4,7174,124

6,754

713 1,516

2,4574,713

2,7052,494

0

2,000

4,000

6,000

8,000

10,000

12,000

2010 2011 2012 2013 2014 Jan-Sept2015

USD

Mill

ion

Plan

Realization


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5. Conclusion


Part Two


9

Infrastructure35 GW power

generation24 Sea ports

Agriculture Food estate Corn Plantation Cattle

Industry

Labor-intensiveindustry

Textile Food & Beverages Furniture Toys

Import-substitution industry

Chemical & Pharmaceutical

Iron & Steel

Export-oriented industry

ElectronicsCPO & derivative

products

Woodproducts, pulp

& paperAutomotive

Machinery Rubber productsFish &

derivative products

Shrimp

Downstream industry of natural resources

Cacao Sugar Smelter

Maritime Ship building Fishing industry Cold storage

Tourism,SEZ & Industrial ParkStrategic

tourism areasMICE 8+11 SEZs

15 New Ind. Parks

InvestmentOpportunities in Indonesia

Investment Priority Sectors2015-2019


10

SeiMangkei- Palm Oil Processing Industry- Rubber Processing Industry- Fertilizer and Miscellaneous Industry- Logistic- Tourism

TanjungApi-Api- Rubber Processing Industry- Oil Processing Industry- Petrochemical Industry

TanjungLesung- Tourism

Mandalika- Tourism

Palu- Manufacture Industry- Agro Based Industry Cacao, Rubber,

Seaweed, Rattan- Manufacturing Nickel, Iron Ore, Gold- Logistic

Bitung- Fisheries Processing Industry- Coconut Based Industrial and Medicinal Plants- Various Industries- Logistic

MaloyBatutaTrans Kalimantan- Palm Oil Industry- Logistic

Morotai- Tourism- Fisheries Processing Industry- Business and Logistic

Investment Opportunities in Indonesia

8 Existing Special Economic Zone (SEZ)

Source: Bappenas, 2015

Supporting Infrastructure:- Toll Aceh Lampung (Plan)- Gas and electricity- Port

Supporting Infrastructure:- Road- Electricity- Water and Waste Installation



Supporting Infrastructure:- Road- Electricity- Water and Waste Installation- Marina

Supporting Infrastructure:- Road- Electricity- Water and Waste

Installation



2015-2019


11

TanjungLesung

Mandalika

MaloyBatutaTrans Kalimantan

Palu

Morotai

Bitung

SeiMangkei

Lhokseumawe- Manufacture- Shipyard

TanjungApi-Api

Padang-Pariaman- Agro Based Industry

Cacao, Rubber, palm oil

Tarakan- Manufacture

Industry

BatuLicin- Refinery - Metal Industry

Garombong- Refinery- Logistic- Petrochemical

Taka Bonerate- Tourism based Maritime

Raja Ampat- Tourism based Maritime

Sorong- Fisheries Processing Industry

Merauke- Food and Energy

Indusrty

Existing SEZs

Planned New SEZs


11 New Special Economic Zone (SEZ)

TelukBituni- Fertilizer and

Petrochemical Industry


2015-2019


12

Kuala Tanjung- Aluminium Industry- CPO

SeiMengkei- CPO Processing

Industry

Tanggamus- Maritime Industry- Logistic

Ketapang- Aluminium Industry

Landak- Rubber Industry- CPO

Sayung- High-technology- Labor-intensive- consumer goods ind

BatuLicin- Stainless Steel Ind

Bantaeng- Smelter Ferronickel Industry- Stainless Steel Industry- Stainless Steel Downstream

Industry

Morowali- Smelter Ferronickel Industry- Stainless Steel Industry- Stainless Steel Downstream

Industry

Konawe- Smelter Ferronickel Industry- Stainless Steel Industry- Stainless Steel Downstream

Industry

TelukBintuni- Fertilizer Industry- Petroleum Industry

Buli- Smelter Ferronickel Industry- Stainless Steel Industry- Stainless Steel Downstream

Industry

TelukBitung- Agro Industry- Logistic

Palu- Rattan Industry- Rubber Industry- Cacao Industry- Smelter Industry



15 New Industrial Parks

JIIPE- High-technology- Labor-intensive- consumer goods ind

2015-2019

IndonesiaInvestment Coordinating Board

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No. Industrial Parks Outside JavaInvestment(IDR trillion)

Industrial sector Anchor Company Workforce

1 Teluk Bintuni, Papua Barat 31 Fertilizer & petrochemical Pupuk Indonesia 51,000

2 Buli, Maluku Utara 4.4 Ferronickel Feni Haltim 10,000

3 Bitung, Sulawesi Utara 2.5 Agro& logistics Pelindo 90,000

4 Konawe, Sulawesi Tenggara 28 Ferronickel Jiangsu Delong 18,000

5 Morowali, Sulawesi Tengah 49 Ferronickel Sulawesi Mining Investment 80,000

6 Palu, Sulawesi Tengah 12 Rattan & agro Bangun Pulau Sulteng 165,000

7 Bantaeng, Sulawesi Selatan 24 Ferronickel Hwadi & Bantaeng Sigma Energi 163,000

8 Ketapang, Kalimantan Barat 4 Alumina Well Harvest Winning 10,000

9 Landak, Kalimantan Barat 1.2 Rubber n/a 33,000

10 Batulicin, Kalimantan Selatan 2.1 Iron & steel Meratus Jaya 10,000

11 Tanggamus, Lampung 17 Maritime Repindo Jagat Raya 104,000

12 Kuala Tanjung, Sumatera Utara 4.5 Alumina Inalum 113,000

13 Sei Mangkei, Sumatera Utara 9.5 CPO Unilever Oleochemical Indonesia 83,000


13 Industrial Parks Outside Java• Outside Java is focused for processing industries of natural resources.

Java is focused for high-technology-based, labor-incentive, and consumer

goods industries.

• All manufacturing industry has to be located within industrial park,

unless it is not available in the province.

Source: Ministry of Industry, 2015.

2015-2019USD 14.8 B

Investment value (IDR 192 trillion).


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5. Conclusion


Part Three


15

Improvement of Investment Climate

Progress of Investment One-Stop Service

One-Stop Service(PTSP)

7,652Permits issued*

90%Regional

PTSP formed

61%Regional

PTSP implement e-

licensing

FTZ, SEZ, Industrial

ParkSupported by Regional PTSP

*) Period of 26 January - 30 June 2015.


16

POWER GENERATION

AGRARIA( 4 improvements)

FORESTRY( 13 Improvements)

TRANSPORTS( 4 improvements)

TAX ALLOWANCE APPLICATION

49 permits923 days

Land use permit (HGU) 3,000-6,000 ha

123 days

Forest land use permit111 days

Special terminal permit30 days

Not specified, unclear

25 permits256 days

90 days

47 days

5 days

28 days

Next target: Sea port,Construction &,Environmental permits.

AGRICULTURE(9 improvements)

INDUSTRY( 8 improvements)

TOURISM AREA(6 improvements)

Plantation permit751 days

Industrial business permit

672 days

Tourism area permit (TDK)

661 days

182 days

152 days

188 days

Improvement of Investment Climate

Progress of Licensing Simplification

I.1Indonesia Investment ClimateThe Process of 3 Hours Investment License Services and Direct Construction InvestmentLicense

Investment License

AOA Tax ID (NPWP)

OSS Center

in BKPM

(Issued in 3

hours)

Industrial

companies

located in the

Industrial Area

and / or certain

Bonded Zone

Paralell license:

OSS Center1. Import Identification Number2. Decision of capital goods inverstment facility3. Tax Allowance or Tax Holiday4. Foreign workers license

BPMPTSP Province or Municipal/City *)1. Building permit2. Environmental permit and legalization UKL/UPL3. Certificate of Company Registration4. Obligatory to report the labor

BPJS Ketenagakerjaan ( Worker Social Security)BPJS Kesehatan ( National Health Care Security)

Directly do the

construction

*) 1. The need for commitment / approval of the Governor and / or the Regent / Mayor Industrial Area location and / or specific Bonded Zone shall direct the licensing of construction with the parallel implementation.

2. No examination of the technical SKPD while taking care of the construction permit and the Environmental Permit, etc3. Determination of the Industrial Zone and / or certain Bonded by the Chairman of BKPM

1. OSS Center in BKPM provide in-house notary2. AOA legalization and Tax ID Number (NPWP)

can be done through online system in OSS Center in BKPM

I.1Indonesia investment climate 3 Hours Investment License Services and Direct Construction InvestmentLicense

1. The Product: 1) Investment license2) Article of association and Approval from the Ministry of Law and Human Rights as a

Indonesia legal entity3) Tax ID Number (NPWP)

2. 3 Hours Investment Services Criteria:1) Applicant / shareholders could come directly to OSS Center in BKPM if one prospective

shareholder representing other shareholders, must bring a power of attorney letter. 2) Minimum Investment is Rp. 100.000.000.000,00 (USD 80.000.000) and/or3) The planned use of Indonesian workers at least 1,000 people.

3. Direct Construction InvestmentLicense:1) Industrial companies located in the Industrial Area and / or certain Bonded Zone2) Determination of the Industrial Zone and / or certain Bonded Zone by the Chairman of

BKPM.3) Companies can directly carry out construction activities, in parallel with other licensing

based on rule and norms of: a. construction of buildingsb. Environmentc. Good industrial practiced. Management / human resource managemente. Other legislation.

I.1Indonesia Investment Climate 3 Hours Investment License Services and Direct Construction InvestmentLicense

1. Regulation of The Chairman of The Investment Coordinating Board Number 14 Year2015 Regarding Guidelines and Procedures for Investment Principle License

2. Regulation of The Chairman of The Investment Coordinating Board Number 15 Year2015 Regarding Guidelines and Procedures for Licensing and Non-LicensingInvestment.

3. Regulation of The Chairman of The Investment Coordinating Board Number 16 Year2015 Regarding Guidelines and Procedures for Investment Facility.

4. Regulation of The Chairman of The Investment Coordinating Board Number 17 Year2015 Regarding Procedures for Investment Controlling and Implementation.

Regulation that has published


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5. Conclusion


Part Four

Indonesia Investment Climate

Investment PolicyI.1

1. Deregulation :

• Reduce the number and type of licensing duplication

• Harmonization of the legislation

• Consistency of regulation/policy

2. Debureaucratization :

• Simplification licensing to reduce the requirements licensing, a clear SOP

and SLA.• The delegation of authority to OSS center (place , form , time and cost)

• Licensing and nonlicensing services through electronic system

3. Law Enforcement and Business Certainty:

• Facilitation of problem solving (debottlenecking)

• Eradication of snuggery and illegal charges

• Implement strict sanctions and completed in every regulation/rule

1. Simplify the licensing and requirement, so Investment Principle License can beimplemented without having the obstacles which been administrative includingeliminate the interlocking licensing.

2. Increase the realization national investment.

3. Improve the legal certainty and business certainty.

4. Recover and increase the industry / the utilization capacity industry, and removedistortion industry that debits consumers, by releasing additional burden ofbureaucratic and regulations for industries.

5. Accelerate the infrastructure in order KPS / IPP including the gap industrialcompetitiveness (payment systems, the lower price industrial gas, the electricityinvestment licenses of 35.000 mw );

6. Give an incentive investment priorities in accordance with the development of thebusiness sector and investment distribution to all regions (Tax Allowance, TaxHoliday and Exemption of Import Duty Facility).

7. Created new initiative such as tax facility to boost transportaion sector, tradefinancing, financial inclusion, inland FTA, logistics centre), therefore national industrywill be able to survive in domestic market and expansion to export market.


The Purpose of Investment DeregulationI.1


The Package Of Policy Deregulation Phase I

Purposed:Move economy to encourage national competitiveness

Scope :

1. Investment expansion

2. Industry Development

3. Trading and Logistic

4. Supplies of raw materials, especially for the agricultural

sector , marine and fisheries, forestry products and

mining product.

1. The Ease of 3 Hours Investment Service• Providing quickly services in the form of investment licenses in three hours• The investment licensing holders have been able to do the construction activities

in the industrial park.2. Obtaining the Tax Allowance and Tax Holiday More Faster

• Tax AllowanceThe government provide and rejected tax allowance for investor, after 25 days as a condition and completed the aplication.

• Tax HolidayThe government legalized the granting of tax holiday, maximum 45 days after all the requirements has completed.

3. The Government Does Not Collect VAT for Transportation facility• Does not collect VAT for several transportation facility especially for shipyard,

train, airplane including the sparepart.• This policy is stated Government Regulation No. 69/ 2015 concerning import and

impor and distribution instrument certain transport and distribution services taxable, related certain transport free of vat.

The main point of policy

I.1Indonesia Investment Climate

The Package Of Policy Deregulation Phase II

4. Investment facility in Bonded Zone• Construction of two bonded logistics center, in Cikarang for manufacture sector

and in Merak for fuel, and planning to be ready by the end of the year.• Benefits: manufacturing companies do not need to be imported and do not need

to take the goods from abroad, they can take from bonded warehouses.5. Incentive for deposit interest tax deduction

• Deposit interest tax deduction given to exporters who have had an obligation toreport the export proceeds (DHE) to Central Bank (BI).

• the export proceeds (DHE) which is stored in the form of deposits : (i) 1 monthreduced by 10 percent, (ii) 3 months reduced by 7,5 percent, (iii) 6 monthsreduced by 2,5 percent dan (iv) above 6 months reduced by 0 percent.

• If converted to Rp: (i) 1 month 7,5 percent, (ii) 3 months 5 percent, and (iii) 6months 0 persen.

6. Streamlining the Forestry Sector licensingAccelerate the investment permit and production of forestry sector to reduce from14 license to 6 license


The Package Of Policy Deregulation Phase II


1. The decline in fuel prices , electricity and gas• The decline in fuel prices (Avtur, LPG, Solar) start from October until Desember

2015• The decline in gas prices for industrial needs decending begin January 2016• The decline in electricity tariff for I3 dan I4 customers, discount rates and the

delay in the payment of electricity bills by up to 60% of the electricity bill a yearfor labor-intensive industries.

2. Expansion for the citizen business credit receiver (KUR)• The interest rate lowered from 22% to 12%• Every families who have fixed income can receive KUR for productive business

sector3. Simplification of Land Permit in Investment Activity

• All applicants get information about the availability of land from 7 days to 3 hours• Completeness of licensing principles simply attach the proposal of company

establishment• Land rights become first requirements to start the business activities• Other requirement can be submitted later on before the land of right use decision

issued


The Package Of Policy Deregulation Phase III


1. ImprovingLaborWelfareFair,simple,andprotectedwagessystemandalsoflatsandhousingdevelopmentprogramforworkers. Government exist to improve workers welfare through provision of safety net with minimum

wagepolicywhichformulatedbytakingintoaccountonproductivityandeconomicgrowth. Flatsandhousingdevelopmentprogramwithlow-costfinancingprogramforworkers.

2. People'sbusinesscredit(KUR)policywhichismoresimpleandbroadercoverage Decreasinginterestratefrom22%to12% ExtendedthereceiverofKURtoindividualandlegalentitiessuchasproductiveSME’s,prospective

Indonesian Labor who will work abroad, family members of employee or fixed income labor,Indonesialaborafterworkingabroad.


The Package Of Policy Deregulation Phase IV


1. Income tax tariff (PPh) reduction for assets revaluation for legal entities orindividual who doing the accounting book. Previously, only limited companies with USD accounting book that can propose

an asset revaluation. From previously 10%, the tax rate cuts are as follow: 3% for those who propose asset revaluation until 31 December 2015; 4% for those who propose asset revaluation in first semester of 2016; 6% for those who propose asset revaluation in second semester of 2016.

2. Double-tax removal for infrastructure & real estate investment trust.


The Package Of Policy Deregulation Phase V



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5. Conclusion


Part Five

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Conclusion

1. The Government of Indonesia seeks to increase national competitiveness,economic growth with investment as the main driver of the economy.

2. The latest policy to further simplify licensing and investment requirementsinto account, one stop with the investment license three hours allowingindustrial companies located in the industrial estate directly to theconstruction.

3. The provision of investment incentives more competitive through TaxAllowance and Tax Holiday with a faster process by filing a incentiveapplication to BKPM.

4. We hope that Japan Investor can further enhance its new investments andcan convey information policy improvements made by the government ofIndonesia to its business partners in overseas.

Finally, for all the attention I thanks you very much.

Badan Koordinasi Penanaman Modal (BKPM)

Indonesia Investment Coordinating Board

Jln. Jend. Gatot Subroto No. 44Jakarta 12190 - Indonesia

t . +62 21 5292 1334

f . +62 21 5264 211

e . [email protected]

www.bkpm.go.id

Thank You

Terima Kasih

Indonesia Investment Promotion Centre (IIPC)

PROGRESS OF INVESTMENT PERFORMANCE AND CLIMATEINDONESIA€¦ · · 2015-11-03PROGRESS OF...

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