Out-Law News | 21 Jul 2021 | 11:01 pm |
Indonesia’s Java integrated industrial and port estate (JIIPE) Gresik special economic zone (SEZ) is expected to attract $17 billion in investment from domestic and foreign investors, according to the president of one of its owners PT AKR Corporindo Tbk (AKRA).
The JIIPE, owned by AKRA and Indonesian state-owned port operator PT Pelabuhan Indonesia III, was officially appointed as a technology and manufacturing SEZ by the country’s president Joko Widodo in June.
JIIPE is designed as a green project with zero emission that has complete utility facilities including utilities needed by industry such as power plants, clean water and waste management, gas supply, telecommunication networks, and multimodal transportation. It is a national strategic object for Industry 4.0. SEZ status will provide additional incentives to investors. Fiscal incentives include income tax, customs and excise. Non-fiscal incentives include one-stop approval and licensing, ease of traffic of goods, and flexibility in employment.
Infrastructure expert John Yeap of Pinsent Masons, the law firm behind Out-Law, said: “The development of a zero emissions green project together with fiscal and non-fiscal benefits must be a positive development for the nation both economically and environmentally. As with any such projects, the success will much depend on the implementation. It is encouraging to see this development is already off to a good start.”
Joko Widodo signed government regulation on special economic zones in January 2020.
Meanwhile, Indonesia loosened the foreign investment rules for local tech start-ups in SEZ, foreign investment in local tech start-ups does not have to meet the minimum capital requirement of Rp10 billion ($710,111).