Provision of Fiscal and Non-Fiscal Incentives for Investors in the Nusantara Capital City

Understand the provisions regarding the investment facilities in the Nusantara Capital City and Partner Regions, including the criteria for investors who can obtain investment facilities, and the forms of providing fiscal and non-fiscal incentives.

1. Investors can obtain investment facilities in IKN and Partner Regions in the form of fiscal and non-fiscal incentives.
2. There are criteria that must be fulfilled by investors to obtain investment facilities in IKN and Partner Regions.
3. Provision of fiscal incentives to investors includes reduction, relief or exemption on (i) income tax, (ii) VAT and/or sales tax on luxury goods, and (iii) special tax and IKN special revenue.
4. Provision of non-fiscal incentives to investors includes (i) customs facilities, and (ii) facilitation, provision of land, and infrastructure.
   
   

Apart from serving as Indonesia’s new capital city for Indonesia, the establishment of the Nusantara Capital City (“IKN”) aims as an Indonesia-centric center of economic activity and future economic growth.

Therefore, to encourage the involvement of business actors in economic activities in IKN and other regions in Kalimantan Island (“Partner Regions”), the government provides fiscal and non-fiscal incentive as the investment facility for investors. The policy is regulated under the:

1. Law No. 25 of 2007 on Investment as amended by Article 77 of Law No. 6 of 2023 on the Stipulation of the Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation become Law (“Investment Law”);
2. Government Regulation No. 2 of 2023 on the Granting of Business Licensing, Ease of Doing Business and Investment Facilities for Business Players in the Nusantara Capital City (“PP 12/2023”).

1. absorb a lot of labor;
2. including high priority scale;
3. including infrastructure development;
4. carry out technology transfer;
5. do pioneer industry;
6. are in remote areas, underdeveloped areas, border areas, or other areas deemed necessary;
7. maintaining environmental sustainability;
8. carry out research, development, and innovation activities;
9. partnering with Micro, Small, And Medium Enterprises (MSME) or cooperatives;
10. industry that use domestically produced capital goods or machines or equipment; and/or
11. including tourism business development.

1. reduction of corporate income tax by up to 100% until 2045 for business actors building infrastructure and public services, economic generation, construction services, real estate, and tourism;
2. reduction of income tax for financial sector activities in the Financial Center area;
3. reduction of corporate income tax for the establishment and/or transfer of the head office and/or regional office;
4. reduction of gross income for the implementation of specific competency-based human resource development activities;
5. reduction of gross income for specific research and development activities;
6. reduction of gross income from donation and/or construction costs for public facility, social facility, and/or other non-profit facility;
7. income tax Article 21 is borne by the government for certain types of work;
8. 0% final income tax on revenue from the gross turnover of certain businesses in MSMEs; and
9. income tax reduction for the transfer of land rights and/or building for the first-time transfer until 2035.

1. there is no collection of VAT until 2035 on the delivery of goods and imports of goods for development construction services activities; and
2. exemption from sales tax on luxury goods for the delivery of taxable goods until 2035 for luxury residences with activities.

1. incentives in the form of tax reduction, relief or exemption specifically for IKN, namely in the form of a reduction or imposition of a 0% tariff on land acquisition tax (BPHTB) for a certain period for (i) granting land rights to business actors, and (ii) transferring land rights for the first time;
2. reduction, relief, or exemption from IKN special revenue, namely in the form of a reduction or imposition of a fee of Rp0,- for a certain period for applications for the issuance of certificate of feasible function (SLF).

1. exemption from import duty and/or tax facilities on imported capital goods for industrial construction and development until 2045; and
2. exemption from import duty on the import of goods and materials for the construction and development of industries until 2045.

1. provision of land or location for business actors;
2. provision of facilities and infrastructure/infrastructure;
3. providing investment comfort and security; and/or
4. easy access to a ready-to-use and skilled labor.