deputy director indonesia investment promotion centre ... · cassava. business fields that are open...

Madrid, June 2018

Investing in Indonesia: Recent DevelopmentTheopita I. TampubolonDeputy Director

Indonesia Investment Promotion Centre (IIPC) London

2

Introduction

Investment Opportunities

Investment Performance

Investment Regulatory

Reform

1

2

3

4

OUTLINE

The Investment Coordinating Board of the Republic of Indonesia

3

INTRODUCTION

Gili Trawangan, Lombok


4

Indonesian Economy2018 GDP Growth Prospect (y/y)

5.2%Indonesian

Central Bank

5.3%World Bank

5.3%Asian

Development Bank

US$ 3,974.10(2017)

5.13 % (February, 2018)

GDP US$ 1.004 Trillion (2017)

Source: IMF and Ministry of Finance

5.17%(Ministry

of Finance)

SumateraGDP Growth4.30%

KalimantanGDP Growth4.33% Sulawesi

GDP Growth6.99%

Papua & MalukuGDP Growth4.89%

JavaGDP Growth

5.61%

Bali & Nusa TenggaraGDP Growth3.73%

Indonesia’ Spatial GDP Growth in 2017

261.1 million(2016)

Population

UnemploymentGDP per capita


5

$11

$17

$22

$66

$215

$305

$309

$321

$437

$1,010

$- $200 $400 $600 $800 $1,000 $1,200

Brunei Darussalam

Lao PDR

Cambodia

Myanmar

Vietnam

Singapore

Malaysia

Phillipines

Thailand

Indonesia

ASEAN GDP in 2017 (USD Billion)

The Largest Economy in Southeast Asia

Source: International Monetary Fund (IMF)


6

“More countries are able to innovate, but they

must do more to spread the benefits. Major

emerging markets such as China, India, and

Indonesia are becoming centers for

innovation, catching up with advanced

economies.”

- The Global Competitiveness Report 2017–2018

WEF Global Competitiveness Index (2017 – 2018)

COUNTRY 2015 2016 2017

Indonesia 37 41 36

India 55 39 40

Brazil 75 81 80

Philippines 47 57 56

Vietnam 56 60 55

Indonesia Competitiveness Rank compare to other emerging markets


7

Policy Reform

World Bank's Doing Business 2018: Indonesia Climbs in Rank

201520142013

129

120

114

2017

91

2016

106

2018

72

3 7Deregulations

72nd+ TOP REFORMER COUNTRYIncreased from 106 rank in

Doing Business 2016

EOD

B In

dic

ato

rs Starting a business

Dealing with construction permit

Registering property

Getting electricity

Paying taxes

Trading across boders

Getting credit

Protecting minority investor

Enforcing contract

Resolving insolvency

20

17 151

116

49

118

62

70

104

108

166

76

20

18 144

108

38

106

55

43

114

112

145

38

Ch

ange

7

8

11

12

7

27

10

4

21

38


8

Japan Credit Rating Agency, Ltd.

Indonesia Investment Grade Rating (May 2018)

May 19th 2017

Rating : BBBOutlook: Stable

Rating : BBB-Outlook: Stable

Rating : BBB+Outlook: Stable

December 20th 2017

Rating : Baa2Outlook: Positive April 13th 2018

February 9th 2018

Rating and Investment Information

R&I Rating : BBBOutlook: Stable March 8th 2018


9

Investment Performance

Indonesia as an investment destination

Mount Bromo, West Java

Indonesia: The 3rd investmentDestination in Asia

Source: The Economist Corporate Network, 2017Labuan Cermin Lake, East Borneo

Total FDI Realization in 2012-2017: Based on Top 20 Country of Origin

Source: BKPM, 2018

Top 10 EU Members Investment in Indonesia 2012-2017

Source: BKPM, 2018

Spain’s Investment in Indonesia

Jakarta, the Capital City of Indonesia

• The number of projects of investment from Spain in Indonesia have increased rapidly during 2010-2017.

• Between 2010 and 2013, investment value took a dip, but later regained growth by 2014.

Total FDI Realization in 2010-2017 from Spain: Based on Sector

“During 2010-2017, there are 322 projects from Spain. And more than a half of projects (217 projects) are on the Other services, Trade and Reparation, and Hotel and Restaurant”

Total FDI Realization in 2010-2017 from Spain: Based on Investment Value

Spain Outward Investment Destination 2008 - April 2018

*USD - millions

Source: www.fdimarkets.com

Spain Outward Investment Based on Industry Sectors 2008 - April 2018

*USD - millions


Spain Outward Investment Based on Parent Companies 2008 - April 2018

*USD - millions


LISTS OF BUSINESS FIELDS THAT ARE CONDITIONALLY

OPEN FOR INVESTMENT*

*) Presidential Regulation Number 44 of 2016 Concerning Lists of Business Fields That Are Closed To Investment and Business Fields That Are Conditionally Open For Investment

Tourism Industry

Energy Related Infrastructures

Agricultures

Business Fields That Are Open under Specific Conditions:

Tourism Industry

Foreign investment: Max. of 67%

Operation of historical and archaeological remains, such as temples, Sultan’s palaces, inscriptions, ruins, ancient buildings;

2 star hotels;

1 star hotels;

Non-star hotels;

Art Galleries;

Art Theatres;

Operation of karaoke;

Operation (exploitation) of coin/card-operated games;

Operation of natural tourism objects other than in conservation areas.


ASEAN countries’ investors: Max. of 70%

Exploitation of natural tourism through provision of ecotourism facilities, activities and services within the forestry areas, including water tours, natural adventure tours, and Spelunking tours.

Business Fields That Are Open under Specific Conditions: Tourism Industry


ASEAN countries’ investors: Max. of 70%

Operation of Museums

Travel bureaus

Catering

Motel

Billiards houses

Bowling alleys

Golf courses

Impresario services

Organization of Meeting, Incentive, Convention, and Exhibition (MICE)

Domestic investment: 100%

ASEAN countries’ investors Max. of 51%

Motion picture advertising, advertisements, posters, stills, photographs,slides, negatives, banners, pamphlets, balihos, folders etc.

Business Fields That Are Open under Specific Conditions: Energy Related Infrastructures


Oil and gas construction services: Spherical tanks;

Oil and gas construction services: Offshore pipeline installation;

Oil and gas, geologic and geophysical surveying services;

Small-scale power generation (of 1 – 10 MW);

Power construction and installation: High / extra-high;

Testing and analysis of Electrical installation: Electrical utility construction and high / extra-high voltage electrical installation voltage electrical installation.


Oil and gas construction services: Platform;

Offshore oil and gas drilling services


Geothermal operating and maintenance services

Foreign Investment Max of 95 %.

Max. of 100% in case of Government-Private Cooperation during a concession period)

Power generation of > 10 MW;

Power transmission;

Power distribution.


Geothermal power generation with a capacity of ≤ 10 MW;

Business Fields That Are Open under Specific Conditions: Energy and Mineral Resources

Foreign Investment: Max. of 95%

Geothermal surveying services

Geothermal drilling services

Power installation consultancy

Power construction and installation: Electrical utility construction

Operation and maintenance of electrical installation

Domestic capital: 100%

Oil and gas construction services: Onshore oil and natural gas upstream production installation

Oil and gas construction services: Onshore pipeline installation

Oil and gas construction services: Horizontal / vertical tanks, onshore oil and natural gas storage and marketing installation

Onshore oil and gas drilling services

Oil and gas support services: Well operation and maintenance services

Oil and gas support services: Oil and gas design and engineering services

Oil and gas support services: Technical inspection services

Power generation of < 1 MW

Testing and analysis of electrical installation: Low / medium voltage electrical installation

Business Fields That Are Open under Specific Conditions: Agriculture


Annual fruit crops (01139)

grapes

Tropical fruits

Citrus fruits

Apples, pome, stone

Berries

Annual vegetables

Perennial vegetables

Drug crops

Floriculture crops


Grapes

Tropical fruits

Citrus fruits

Apples, pome, stone

Berries

Annual fruit (01132)

Leafy vegetables

Root vegetables

Fruit bearing vegetables

Chili peppers, paprika

Mushrooms

Ornamental plants

Non-flower ornamental plants

GROWING | PERBENIHAN GROWING | BUDIDAYA


Manufacture of horticultural crops: Post-harvest of fruits and vegetables

Horticultural research and quality test laboratories

Horticultural agrotourism activities

horticultural post-harvest services

Retail sale of flower arrangement/florists/decorators

Horticultural development consultants

Horticultural landscaping

Horticulture courses services

OTHER BUSINESS FIELD



Rice

Corn

Soybeans

Groundnuts

Green beans

Sweet potatoes, Cassava

SEEDING (PERBENIHAN) FOOD CROPS

GROWING (BUDIDAYA) FOOD CROPS


The nucleus is subject to sourcing at least 20% of its production from the plasma/smallholders

Jatropha curcas

Cashews

Other sweetener crops

Coconut palms

Sugar cane

Oil palms

Tobacco

Beverage crops (tea, coffee and cocoa)

Textile raw materials and and cotton

Rubber and other trees for extraction of sap

Essential oil crops

Peppercorns

Other spice crops

Medicinal/pharmaceutical crops Other crops not elsewhere classified

Cloves

PLANTATION BREEDING (PERBENIHAN) AND FARMING (PERKEBUNAN)


Research and development on agricultural genetic resources sciences and engineering

Research and development on GMO (Genetically Modified Organisms) products sciences and engineering (genetic engineering)

Specific locations specified by the Ministry of Agriculture

Breeding and raising of swine (pigs) of more than 125 in number

OTHER BUSINESS FIELD


Rice

Corn

Soybeans

Groundnuts

Green beans

Sweet potatoes, Cassava



The nucleus is subject to sourcing at least 20% of its production from the plasma/smallholders

Cashews and manufacture of dried cashew nuts and cashew nut shell liquid (CNSL)

Oil palms and manufacture of palm oil (CPO)

Peppercorns and manufacture of dried white peppercorns and dried black peppercorns

Coffee and manufacture of coffee bean peeling, cleaning and sorting

Jatropha and manufacture of jatropha oil

Cocoa and manufacture of cocoa bean peeling, cleaning and drying

Sugar cane, manufacture of cane sugar, sugar cane top and sugar cane bagasse

Growing of tea and manufacture of black tea/green tea

Tobacco and manufacture of dried tobacco leaves

Cloves and manufacture of dried clove buds

Cotton and manufacture of cotton Essential oil crops and manufacture of essential oil

Coconut palms and manufacture of coconut oil

Rubber and manufacture of sheets, concentrated latex

Coconut palms and manufacture of copra, fiber, coconut shell charcoal, dust, nata de coco

Grains other than coffee beans and cocoa beans and manufacture of grain peeling and cleaning other than coffee beans and cocoa beans

INTEGRATED PLANTATION FARMING AND PROCESSING


Subject to sourcing at least 20% of raw materials from own farms

Crude vegetable and animal oils (edible oils)

Rude jatropha oil

Copra, fiber, coconut shell charcoal, dust, nata de coco

Rubber for sheets, concentrated latex

Coconut oil

Cotton fiber and cotton seeds

Palm oil

Dried clove buds

Peeling, cleaning, drying, and sorting of plantation products (cocoa beans and coffee beans)

Peppercorns for dried white peppercorns and dried black peppercorns

Cane sugar, sugar cane top and sugar cane bagasse

Cashews for dried cashew nut and cashew nut shell liquid (CNSL) Black tea/green tea

Dried tobacco leaves

MANUFACTURE | INDUSTRY


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Priority Sectors

What and Where to Invest?

Mentawai Island, West Sumatra


29

Tourism

Mentawai Island, West Sumatra

The Travel & Tourism Competitiveness Index 2008-2017, Overall Rank Indonesia ranks 42nd (2017) from 136 countries, climbing 38 places since 2008.

Travel & Tourism Competitiveness Index 2017: Indonesia Overall Performance

In 2017, Bali succeeded in reaching the Top in the prestigious Trip Advisor Travelers’ Choice Award named as the World’s Best Destination 2017. Outranked London, Paris, Rome, New York, Crete, Barcelona, Siam Reap, Prague and Phuket.

During 2017, Wonderful Indonesia received 27 awards at various events in 13 countries.

Indonesia won Dive Magazine’s Travel Award 2017 (Dive Magazine’s Travel Award, London)

• Best Destination:

• Indonesia (1st Winner for 2 years)

• Best Resort, and Spa

• Siladen, Bunaken (1st Winner)

• Wakatobi (3rd Winner)

• Best Live Aboard

• Pelagian, Sulawesi (2nd Winner) 14th UNWTO Awards for Innovation in Tourism, Spain, 18th January 2018

• Tourism Inovation Non-Governmental Organizations (NGO);

• TripOnYu (1st Winner)

• Sumba Hospitality Foundation (3rd Winner)

GLOBAL ACKNOWLEDGEMENT TO INDONESIA’S TOURISM

Ten New Bali: National Tourism Priority DestinationLake TobaArea : 1175 Ha Investment : USD 1,6 Billion

Tanjung KelayangArea : 324 HaInvestment : USD 1.4 Billion

BorobudurArea : 309,5 Ha Investment : USD 1.5 Billion

WakatobiArea : 532 Ha Investment : USD 1,5 Billion

MorotaiArea : 300 Ha Investment : USD 2,9 Billion

Tanjung LesungArea : 1500 Ha Investment :

USD 4 Billion

Kep. Seribu & Kota TuaArea : 1009 Ha Investment : USD 1,5 Billion

Bromo Tengger SemeruArea : 325 Ha Investment : USD 1,4 Billion

MandalikaArea : 1175 Ha Investment : USD 3 Billion

Labuan BajoArea : 400 Ha Investment : USD 1,2 Billion

Tourism Special Economic

Zone

National Strategic Tourism

Zone

Tourism

Authority

33

Growth of Foreign Tourist Arrival 2008-2017“Foreign tourist arrivals to the country was recorded at 14.04 million in 2017, or 21.88 percent higher than the figure in the previous year, which was at 11.52 million, or 125 percent higher than the figure in 2008.”

Source: Indonesia Statistics, 2018

Foreign Tourist Arrival 2008-2017: Based on Nationality

“78 percent of foreign tourist are from Asia Pasific Region. Most foreign tourist during 2008-2017 originated from Singapore, Malaysia, Australia, Japan, and China.”

Source: Indonesia Statistics, 2018

Infrastructure

Mass Rapid Transportation, Jakarta


38

35 GW Electricity Program Status

1,584 MW are operating (4%)

17,024 MW are in construction (46%)

1,095 MW are in planning (3%)

3,414 MW are in procurement (10%)

35 GWElectricity program

*) Per April 2018

Source : Ministry of Energy & Mineral Resources (MEMR)

12,690 MW have signed PPA (37%) prior to financial close


39

Independent Power Producer (IPP) Potential Projects (I)

Source: PLN, RUPTL 2018-2027

No Type LocationCapacity

(MW)COD Target Province

1 Hydro Power Scattered 400 2025 South Sulawesi

2 Hydro Power Bakaru 2 2x70 2022 South Sulawesi

3 Hydro Power Buttu Batu 2x100 2025 South Sulawesi

4 Hydro Power Poigar 2 30 2023 North Sulawesi

5 Hydro/Mini Hydro Power Scattered 582,2 2021-2025 Aceh

6 Hydro/Mini Hydro Power Scattered 147,7 2021-2025 North Sumatera

7 Hydro/Mini Hydro Power Scattered 21,25 2021-2025 Bengkulu

8 Hydro/Mini Hydro Power Scattered 18 2021-2025 West Sumatera

9 Wind Power Scattered 60 2027 South Sulawesi

10 Gas Gunung Megang (Expansion) 40 2020 South Sumatera

11 Gas/Gas Engine Belitung 1 30 2019/2020 Bangka Belitung Island


40

IPP Potential Projects (II)


12 Combined Cycle Gas Fired Jawa-3 600 2021 East Java

13 Combined Cycle Gas Fired Riau-2 250 2021 Riau

14 Combined Cycle Gas Fired Jawa-3 200 2021 East Java

15 Combined Cycle Gas Fired Senipah (ST) 35 2019 East Kalimantan

16 Wind/Solar Power Scattered 25 2023 Bali

17 Wind/Solar Power Scattered 25 2023 Bali

18 Waste to Energy Power Scattered 85 2022 DKI Jakarta

19 Coal Fired Jawa-5 (FTP2) 1000 2022 Banten

20 Coal Fired Sulbagsel 2x200 2023/24 South Sulawesi

21 Coal Fired Kalbar 2 2x100 2021/22 West Kalimantan

22 Coal Fired Poso Peaker 2x65 2022 South Sulawesi

23 Coal Fired Sulbagut 3 2x50 2023/24 Gorontalo

24 Coal Fired Bau-bau 2x15 2021/22 Southeast Sulawesi

25 Main Mouth Coal Kalselteng 5 100 2027 South Kalimantan




41

IPP Potential Projects (III)




26 Geothermal Wayang Windu (FTP2) 120 2025 West Java

27 Geothermal Rawa Dano (FTP2) 110 2022 Banten

28 Geothermal Scattered 110 2024 Central Java

29 Geothermal Baturaden/Slamet (FTP2) 85 2025 Central Java

30 Geothermal Baturaden/Slamet (FTP2) 85 2025 Central Java

31 Geothermal Dieng (FTP2) 55 2022 Central Java

32 Geothermal Ijen (FTP2) 55 2021 East Java

33 Geothermal Wilis/Ngebel (FTP2) 55 2021 East Java

34 Geothermal Ijen (FTP2) 55 2022 East Java

35 Geothermal Wilis/Ngebel (FTP2) 55 2025 East Java

36 Geothermal Lahendong VII & VIII 2x20 2025 North Sulawesi

37 Geothermal Scattered 40 2025 Central Java

HOW TO PARTICIPATE IN ELECTRICITY PROJECTS IN INDONESIAfor Foreign Direct Investment (FDI)

ELECTRICITY PROJECTS - INVESTMENT SCHEME

Independent Power Producer

(IPP)

Engineering Procurement and

Construction (EPC) Contract Private Power Utility (PPU)

Public Private Partnership

(PPP) Project

▪ This scheme is implemented

on electricity development.

▪ As IPP, private sector roles

as project owner and our

State Owned Company (PT

PLN) as an off-taker.

Private sector acts as contractor

/ sub-contractor both for

government projects and

private’s projects through tender

process and the project owner

provides financing.

▪ It is a private initiative or B-

to-B projects that mainly

used for own

interest/purpose and not

guaranteed by the

government.

▪ This scheme is used for

government infrastructure

projects which cooperated

with private sector.

▪ By this scheme, the investor

is given a consession time to

operate the project.

▪ After concession period is

completed, the project must

be transfered to the

Government.

42Source: BKPM

43Indonesia Investment Coordinating Board

Foreign Capital Ownership for Electricity Project

Source: Presidential Regulation Number 44 Year 2016

NEGATIVE INVESTMENT LIST

Sector Maximum Foreign Capital Ownership

Power Plant

< 1 MW Closed for Foreign Investor

1 – 10 MW 49 %

≤ 10 MW 67 % (for Geothermal PP/PLTP)

> 10 MW 95 % (for non PPP scheme) or100% (for PPP scheme during concession period)

Power Transmission95 % (for non PPP scheme) or

100% (for PPP scheme during concession period)

Power Distribution95 % (for non PPP scheme) or

100% (for PPP scheme during concession period)

Power Installation Consultation95%

Construction and Installation of Electric Power

95% (for power plant), 49% (for power transmission),

Closed for Foreign Investor (for power distribution)

Operation and Maintenance of Electric power Installation95%

Examination and Testing of Electric Power Installation49% (for power plant and power transmission),

Closed for Foreign Investor (for power distribution)


44

Power Tariff by Region (cent/kwh)

Java-Bali

6.5

Aceh

10.4

North Sumatera

9.3

West Sumatera

8.1

Riau

10.1

Lampung

7.8

South Sumatera

7.9

West Kalimantan

12.4

South & Central

Kalimantan

9.0

East Kalimantan

10.2

North & Central

Sulawesi

12.1

Bangka

13.7

South Sulawesi

12.1

East Nusa

Tenggara

17.5

West Nusa Tenggara

13.7

Maluku

17.3

Papua

13.5

Source: Ministry of Energy and Mineral Resources Decree No. 1404/2017

National Tariff: 7.4Regional Tariff: 6.5 – 17.5


45

IPP BUSSINESS PROCESS SCHEME

Special Purpose Company

Project Sponsors

Lender(s)

Fuel Supplier

O&M Contractor

EPC Contractor

Power Purchase Agreement

Financing Agreement

Shareholders Agreement

O&M Contract

Procurement Process

Financing Process

Source: PLN


46

Stages to Process the IPP Project

Source: PLN


47

PROCUREMENTSCHEME

OPEN TENDER DIRECT SELECTION DIRECT APPOINTMENTDIRECT ASSIGNMENT

(TO PLN SUBSIDIARIES – IP/PJB)

REGULATORY • Law (UU) No 30/2009• Gov. Reg. (PP) No. 23/2014• MEMR Reg. No. 01/2006 jo No. 04/2007• MEMR Reg. 10/2017 (New)• MEMR Reg. 19/2017 (New)

• Law (UU) No 30/2009• President Reg. 14 Tahun

2017 (New)

Project Criteria By bussiness nature, the project can be opened to many participants (open competition)

a) Expansion of the existing IPP project in the same grid system but different location.

b) There are more than one interested parties.

a) IPP with energy from : renewable energy; marginal gas, main mouth coal and another local energy.

b) Excess Powerc) Condition of crisis or

emergency for electricity provision.

d) Expansion for the same location.

a) Main Mouth / Non Main Mouth CFSPP (PLTU)

b) Open/ Combined Cycle Gas Fired Power Plant (PLTG/PLTGU)

PROCUREMENT PROCESS FOR IPP PROJECT

Source: PLN


48

RUPTL

PLN issues Assignment and also the project document to PLN

Subsidiaries (IP or PJB)Project IPP

Partner selection process by IP/PJB(IP/PJB : min. share 51%)

Price NegotiationSign of the Agreement

(PPA)IP/PJB & Selected Partner submit

the project proposal to PLN

Approval from Ministry of Energy and Mineral Resources

(ESDM)

DIRECT ASSIGNMENT TO PLN SUBSIDIARIES (IP/PJB)


49

Engagement with PLN Subsidiary for Coal Fired Plant Project

Projects Announcement

https://supplier.indonesiapower.co.id/

Letter of Interest (LoI) to:

Director of Business and Development

PT.Indonesia Power

Jl. Gatot Subroto, Kav.18

Document reviewed by

PT Indonesia Power

(Legal and Financial Aspects)

RFP

(Shortlisted)

One-on-One Meeting

Partnership scheme:

• PT Indonesia Power (Share 51%);

• PT Indonesia Power (Share Equity 10%);

• Max 2 entities (Local/Foreign)

Contact:

Henry Asdayoka

Kepala Divisi Pengembangan Bisnis

HP: +811-250-480

Projects Announcement

Newspaper media: The Jakarta Post

Letter of Interest (LoI) to:

PT PJB Representative Office

Cq. Division Head of Business Development, Product and Marketing

PLN Building, 2nd Floor.

Jalan Gatot Subroto Kav 18, Jakarta

Document reviewed by

Price Waterhouse Coopers (as PJB’s consultant)

duration 3 weeks

RFP

(Shortlisted)

One-on-One Meeting

Partnership scheme:

• PT Indonesia Power (Share 51%);

• PT Indonesia Power (Share Equity 10%);

• Max 2 entities (Local/Foreign)

Contact:

Nyoman Ngurah Widyatnya

Kepala Divisi Strategi Bisnis , Produk dan Pemasaran

HP: +62-8121718108

IndonesiaInvestment Coordinating Board

50

2

3

Investors Local Government

Directorate General of Electricity, Ministry of Energy & Mineral Resources

Meeting by MEMR, PLN, and BKPM

to response the application of certain

Business Area

Determination of Business Area

(MEMR Regulation No. 35/2014)

OSS - BKPM

Site Visit to the Business Area

Establishment of IUPTLBy Local Government / Regional

DPMPTSP(UU No. 23/2014)

Construction

Commercial Operation Date

(Due Diligence)By Team Directorate

General of Electricity and

Local government

Recommendation / Official

Report on the Release of

the Business Area

Investment RegistrationFrom One Stop Service BKPM

Source: Ministry of MEMR Regulation No. 28 Year 2012 j.o Ministry of MEMR Regulation No. 7 Year 2016

PRIVATE POWER UTILITY (PPU)

Procedure on Determining of the Business Area (Penetapan Wilayah Usaha)


51

Business Flowchart for Electricity Project

Company Establishment Licensing Process

Principle LicenseLocation Permit

Temporary IUPTL

Land Acquisition

Commercialization

Certificate of Operation Worthiness (SertifikatLaik Operasi/SLO)

Commercial Operation Date (COD)

Construction Phase

Environment License, Construction Permit (IMB), and IUPTL should be obtained first

Construction

Contracts& Financing

PPAFinancial Close

- Investment License- Certificate of incorporation- NPWP / Tax registration- TDP / Company registration- RPTKA / Employment plan- IMTA / Working permit - APIP / Import identification- NIK / Customs registration- Letter of land availability

1. 2.

3.4.

A business license must be granted before an entity can supply electrical power or run an electrical power-supporting business. Business licenses for the supply of electrical power consist of the following:a) An IUPTL to supply electricity for public use, which may be issued for a maximum validity period of 30 years and may be extended; andb) An Izin Operasi to supply electricity for own use (i.e. for PPUs) with electricity capacity of more than 200 kVA, which may be issued for a maximum validity period of ten years and may

be extended


52

Investment Regulatory Reform

PRO INVESTMENT POLICY

Borobudur Temple, Yogyakarta


53

One-Stop Service(PTSP) at

BKPM

One place

22 ministries integrated 3-hour

Investment Licencing Service

3-hourInvestment Licencing

Service for Infrastructure and mineral resources

KLIKDirect

Construction Facility for Investment

project

96%Regional PTSP

formed.68%regional PTSP

implement e-licensing.

Industry, power

generation, oil &

gas, tourismat one place

All sectors167 permits

are delegated to BKPM

BKPM Priority Agenda

Improving Investment Services in Central and Regional

One-Stop Integrated Services


54

INTEGRATED BUSINESS LICENSING

• Single submission of data and information and

single and synchronous processing of data and

information.

• All licensing data and business requirement

compliance for every ministries /government

agency will be in 1 integrated business license

system.

• The operational and the admin of Online Single

Submission will be performed in 1 (one) building

set by the Government.

INA-TRADE

Building Permit (IMB)

Forestry Permit

IUJK

Mining LicenseBusiness License

E-licensing PPI

NPWP& KSWP

Deed ofEstablishmentAuthentication

ESDM

PUPERA

LHK

AGRARIA

KEMENAKER

FINANCETAX

PERDAGANGAN

FINANCECUSTOMES

TRANSPORTATION

LEMSANEGDigital Signature

Transportation License

INSW

NIK

Masterlist

KEMKUM

HAM - AHUForeign Worker

KOMINFO

AGRICULTURE

MARINE FISHERY

HOME AFFAIRS

BPJS

BIG

PTSP - DPMPTSP

(ONLINE SINGLE SUBMISSION)

TDPPERINDUSTRIAN

2018 Agenda: Single Submission System (NSWi)

: Integrated: On Process: Coordinating: Un-Integrated Yet

ONLINE SINGLE SUBMISSION SYSTEM (NSWI)


55

3-Hour Investment Licensing Service

BKPM

• Arrive at BKPM directly from the

airport.

• Consult with Director of

Investment Service.

• Submit the required documents

& data.

REQUIREMENTS:

Minimum investment of IDR 100 billion (USD 8 million) and/or

employing 1,000 local workers

Exception for investment plan in infrastructure sector (power,transportation, public works and ICT) and oil and gas sector Wait at the lounge while

documents are processed by

BKPM, in-house notary, ministries,

& other government institutions.

Obtain eight documents & letter of

land availability within three hours

to start your business.

9 documents obtained

Certainty to work• RTKA / Employment plan

• IMTA / Working permit

Certainty to start

a business• Investment license

• Certificate of incorporation

• NPWP / Tax registration

• TDP / Company registration

Certainty to import

capital goods

• APIP / Import identification

• NIK / Customs registration

• Letter of land availability

Accurate land

information

Source: BKPM, 2017

NO TYPE OF SERVICES REGULAR SERVICE

1. Temporary Business License for Electricity 20 Working Days

2. Temporary Business License for Oil / Fuel / LPG Storage 32 Working Days

3. Temporary Business License for Storage of Processed Products / CNG

32 Working Days for Processed Products---------

40 Working daysfor CNG

4. Temporary Business License for LNG Storage 32 Working Days5. Temporary Business License for Oil Refinery 32 Working Days

6. Temporary Business License for Processing Oil Residue Industry 32 Working Days

7. Temporary Business License for Natural Gas Processing 32 Working Days

8. Temporary Business License for General Trade of Oil/Fuel 40 Working Days

9.Temporary Business License for General Trade ofProcessed Products

40 Working Days

ESDM3J service is given if the company has fulfilled the checklist of administrative and

technical requirements as regulated on MEMR Ministerial Decree No. 15 of 2016.

3 Hours Investment

Licensing Service For Energy

And Mineral Resources

Sector


56

• Director ARRIVES at Central OSS.• SUBMIT required documents.

RECEIVERequested licensing products BKPM

9 Type of Licensing

Issued by ESDM3J service

REQUIREMENTS

ESDM3J service is given if the company has fulfiiled thechecklist of administrative and technical requirementsas regulated on MEMR Ministrial Decree No. 15 of 2016as revised in Ministerial Decree No. 13 of 2017.

3 HOURS INVESMENT LICENSING SERVICE FOR ENERGY AND MINERAL RESOURCES SECTOR

NO TYPE OF SERVICES REGULAR SERVICE

1. Temporary Business License for Electricity 20 Working Days

2. Temporary Business License for Oil / Fuel / LPG Storage 32 Working Days

3. Temporary Business License for Storage of Processed Products / CNG 32 Working Days for Processed Products---------

40 Working days for CNG

4. Temporary Business License for LNG Storage 32 Working Days

5. Temporary Business License for Oil Refinery 32 Working Days

6. Temporary Business License for Processing Oil Residue Industry 32 Working Days

7. Temporary Business License for Natural Gas Processing 32 Working Days

8. Temporary Business License for General Trade of Oil/Fuel 40 Working Days

9. Temporary Business License for General Trade of Processed Products 40 Working Days

WAITINGIn Priority Lounge

• OSS : One Stop Service (PTSP)• MEMR : Minister of Energi and Mineral Resources


57

Direct Construction Facility/KLIK

Direct Construction No Requirements• No minimum investments or workers is required.

• Available for 47 selected industrial parks in 12 provinces and

12 existing SEZs.

• Construction permits can be obtained in parallel with construction

process.

Investors can directly start their project construction before obtaining construction permits. This service is supported

by both Central and Regional Governments.

Obtain investment licence at One-stop

Service (PTSP) at national or regional

level.

• Survey a land within selected industrial parks.

• Acquire the land for your industry.

• Start the construction of your project. No

other permits are required.

• Apply for building construction permit &

environmental permit, in parallel with construction

process.

Project that already utilized

KLIK (2016-2017): 115

Projects, total area 1.322,96

ha, investment value IDR

130,62 Trillion (10% of

National Investment

Realization)

Source: BKPM, 2018

Land Transaction

Requirements

preparation of IMB

Example: EIA /AMDAL, Environmental Permit

(6 months-1,5 year)

IMB Application

(10-14 days)

Construction

(1 – 2 years)

By investing in KLIK Industrial Estate,

investor will efficiently safe time ± 6

months – 1,5 year

Land Transaction

Doing

Construction

(1 – 2 years)

Ready for commercial

production (all technical

permits complete)

• IMB

• EIA (AMDAL)

• etc.

Business Permit/IUI

KLIK

Set Up Factory in Non- KLIK Area

in parallel processing technical permits

Ready for commercial production (all

technical permits complete)

Principle Permit / Investment Permit

Set Up Factory in Industrial Estate with KLIK Facility

IndonesiaInvestment Coordinating Board

58

47 Industrial Estates in 12 Provinces for KLIK

58

DKI Jakarta (2)▪ Kawasan Berikat

Nusantara/KBN ▪ Jakarta IE Pulagadung/JIEP

58

➢ Head of BKPM Decree No. 41 of 2018 on the Enactment of Certain IEs for KLIK (Direct Construction Facility).

Central Java (5)▪ Kendal IE▪ Bukit Semarang Baru IE▪ Wijayakusuma IE▪ Jatengland Industrial Park Sayung▪ Tanjung Emas Export Processing Zones

East Java (4)▪ Java Integrated Industrial

& Port Estate▪ Maspion IE▪ Tuban IE▪ Kawasan Industri & Pergudangan Safe

N Lock

South Sulawesi (2)▪ Bantaeng Indutrial Park▪Makassar Industrial Park

Banten (4)▪ Modern Cikande IE▪ Wilmar IE▪ Krakatau IE Cilegon▪ Millenium IE

North Sumatera (1)Medan IE

Phase I

Phase II

Phase III

Note:IZ: Industrial Zone

Riau Islands (5)▪ Batamindo IE▪ Bintang Industrial Park II ▪ Kabil Integrated Industrial Park ▪ West Point Maritime Industrial Park ▪ Bintan Inti IE

East Kalimantan (1)KI Kariangau

Riau (2)▪Dumai IE▪ Tanjung Buton IE

Total Luas :14.996,85 hadi 12 Provinsi25 Kab/Kota

West Sumatera (1)▪ Padang Industrial

Park

D.I. Yogyakarta (1)▪ Piyungan IE

West Java (19)▪ Bekasi Fajar Industrial Estate▪ Delta Silicon 8 IE▪ Karawang Internasional Industrial City▪ Suryacipta City of Industry▪ GT Tech Park▪ Artha Industrial Hill▪Marunda Center IE▪ Greenland International Industrial

Center (GIIC)/Deltamas

▪ Jababeka Tahap III▪ Kota Bukit Indah Ind. City▪ Indotaisei Kota Bukit Indah IE▪ East Jakarta Industrial Park▪ Bekasi International IE▪ MM 2100 Industrial Town▪ KI TeIDRadu Indonesia China ▪ Kujang Cikampek IE

▪ Lion IE▪ Rancaekek IE▪ Cibinong Center IE

(MoF Regulation No. 35/PMK.010/2018)

5-20years tax exemption*With another 50% tax exemption for additional 2 years (transitional period).

17 eligible pioneer industries: 1. Basic metal industries;2. Oil refinery industries ; 3. Petrochemical industries from oil, gas, or coal;4. Basic an-organic chemicals5. Basic an-organic chemicals from agriculture, plantation, or forestry;6. Basic material industry for pharmaceutical ;7. Semi-conductor and other computer main component industries;8. Main component industry for telecommunication;9. Main component industry for medical devices;10. Machinery industries;11. Machinery industries for automotive;12. Main component industry for robotic;13. Main component industry for marine transportation;14. Main component industry for aiIDRlane;15. Main component industry for railway;16. Electric Power Generation industries;17. Economic infrastructure.

IDR 0,5 trillion

Minimum investment plan(USD 38 million).

(Government Regulation No.9/2016)

145business fieldsEligible for tax allowance, expanded from 143 segments in the previous regulationwith additional segment: clothing industry.

30% of investment valueReduction of corporate net income tax for 6 years, 5% each year.

Under certain requirements among others:

investment value or export orientation, manpower absorbtion, local content, and project location (especially outside Java island).

Tax Holiday Tax Allowance

Fiscal Incentives for Investment

(MoF Regulation No.176/PMK.011/2009 juncto. No. 188/PMK.010/2015)

- 2 years import duty exemption or- 4 years for companies using locally-

produced machines/equipment (min.30%).

a. Machinery/equipment import duty exemption

b. Raw materials for production

Which produces goods and/or services, including:1) Tourism and culture 2) Public transportation 3) Public health services 4) Mining 5) Construction 6) Telecommunication 7) Port

Industries

Import Duty Facility

*) Based on value of investment threshold.

Thank You

T: +44(0)20 3440 3830D: +44 (0)20 3440 3831W: www.investinindonesia.uk

THEOPITA I. TAMPUBOLONDEPUTY DIRECTOR OF IIPC LONDON

Indonesia Investment Promotion Centre (IIPC)Landmark Barbican, 200 Aldersgate (South)London EC1A 4HDUnited Kingdom

tel:+44 20 3440 3830

tel:+44 20 3440 3831

http://www.investinindonesia.uk/

deputy director indonesia investment promotion centre ... · cassava. business fields that are open...

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