Indonesia is the largest country in Southeast Asia, with an economic growth rate of 5.17% in 2018. Indonesia’s steady growth in medium-tech exports reflects the strong performance of the palm oil industry, rubber tires (low-to-medium technology), automotive assembly industry, automotive components, and network cables (high school). At the same time, Indonesia is also the largest archipelagic country in the world. It can buy and own freehold property in private, or it can be purchased and developed on behalf of the company.
In order to accelerate economic development, the Indonesian government has vigorously developed a special economic zone plan in recent years. So far, Indonesia has 12 special economic zones. Investors can enjoy policy benefits in the following nine areas:
(1) Income tax exemption period concessions. Enterprises with an investment of more than 1 trillion rupees can enjoy a 10-25 year tax reduction and exemption, and the tax reduction and exemption rate is 20%-100%; enterprises with an investment of more than 0.5 trillion rupiahs can enjoy 5-15 years of tax reduction and exemption. The tax reduction and exemption range is 20%-100%.
In addition, investors can get a 30% discount for a 6-year tax cut; accelerated depreciation makes the total value of the income tax paid by the company lower; the dividend is only 10% of the income tax; the compensation period is 5-10 years.
(2) Value-added tax concessions. Imports of goods or raw materials from other countries and regions into the special economic zones are tax-free; from the special economic zones to other countries and regions, tax exemption is also possible; transactions between special economic zone enterprises are tax-free, and transactions between special economic zone enterprises and other special economic zone enterprises are also tax-free.
(3) Customs concessions. Import duties from the special economic zones into the domestic market are in accordance with the rules of origin.
(4) Foreign nationals may own real estate. Foreign investors or foreign enterprises may own apartments or real estate in special economic zones; foreign citizens or foreign enterprises with apartments or real estates may obtain residence permits through guarantees from special economic zone administrative agencies; the luxury goods they own may be exempt from VAT and luxury jewelry sales. tax.
(5) Concessions in tourism. The first phase of construction tax cuts of 50%-100% can be obtained; the entertainment tax can be reduced by 50%-100%.
(6) Privileges in terms of labor. The special economic zone will set up a wage committee and establish a cooperative organization composed of the government, employers, and employees; each enterprise has only one trade union or workers’ forum; the special economic zone has the right to directly issue and extend the plan for the use of foreign-funded employees; Foreign employee certificate.
(7) Immigration benefits. A 30-day initial visit visa is available, which can be extended for 5 consecutive periods of 30 days; a one-year multiple-visit visa is available; foreigners who own real estate in the Special Economic Zone can obtain a residence permit; Foreigners in the special economic zones can obtain a residence permit.
(8) Preferential land. The right to use the building can be obtained and can be extended continuously; the administrative organization of the special economic zone can provide land services directly to the operators.
(9) Preferential aspects of the license. The special economic zone administrator may directly issue the principle license and the business certificate; the time from the start of the application until the issuance of the permit shall not exceed 3 hours; a list of services for the license and non-license will be provided; Handling license aspects and non-licensing services.
At present, many countries have set their sights on the development of islands in Indonesia. To this end, Queen Law Firm recommends that foreign companies can purchase islands in Indonesia, apply for the island to the Indonesian government as a special economic zone, and develop industrial, trade, tourism, real estate, and other projects on the island, which will yield a very substantial return.
Queen Law Firm will use a wealth of legal knowledge and a broad network of contacts to escort Chinese investors in Indonesia’s island development and special economic zone construction projects.