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Pushing the Investment Through Special Economic Zone (SEZ)

Special Economics Zone (SEZ) was established as a region in where different industries can build, grow and thrive. SEZ serves as a center for economic growth that drives a region and it even has the power to influence nationally. In addition, SEZ is usually a region that has a lot of saturation in manpower. As this is an important area for economic growth, SEZ acts as a magnet for investors who wish to especially invest in areas that are developing. Even after a period of time spent, SEZ is able to improve Indonesia’s infrastructure development.

With these considerations, the Investment Coordinating Board (BKPM) will focus on encouraging investment through SEZ regions. As a result, the integration of SEZ will be a step BKPM needs to take after integrating the PTSP center and area. By initiating the integration of SEZ licensing, it will facilitate investment in Indonesia with more ease.

All this while, BKPM felt as though the policies and regulations in SEZ often did not support investment but instead, hindered it. Namely permits for industrial development that has to be submitted by investors before they begin on construction, production or infrastructure. Many of the permits could take up to months or even years to be approved.

It is expected with this ease, licensing issues will be eliminated for SEZ once investment begins. Previously, before investors began on construction, they had to submit all permits required. Whereas now, investors only need to submit the principle permit first and they can start building their factories simultaneously whilst preparing other permits. The simplest example in regards to licensing is AMDAL. In SEZ, the logic for them is that AMDAL has examined all the areas before, so to get permission, they do not need wait to be examined. This is different with areas that are non-SEZ, with environments that are different; all permits need to be submitted before any construction begins.

In addition to the ease of licensing, in June 2016, the government held a socialization to focus on SEZ to increase the ease of investment in the field of taxation, customs and taxation. Not only that, the government also provided guarantee regarding the availability of labor. They even assured the ease in process for immigration, land and licensing and others. Currently, there are nine SEZs that have been approved by the government in order to provide convenience to the investors. The nine SEZs approved are SEZ Tanjung Kelayang, SEZ Tanjung Lesung, SEZ Maloy Batuta Trans Kalimantan, SEZ Sei Mangkei, SEZ Mandalika, SEZ Morotai, SEZ Bitung, SEZ Tanjung Api-Api, and SEZ Palu.

In the SEZ area, investors can obtain easier licensing facilities offered by the government. Should an investor run into any trouble when investing in Indonesia, there is a new facility from the government that can help to resolve the issue. This is known as Held Desk, a new breakthrough from the SEZ Board that will help investors solve their problems. It will also act as a facilitator so that the government can keep their initial promise made to the investors when they first invested in Indonesia, which was that the investing in SEZ regions will be easy.

Lastly, to support the government’s focus on increasing investment in the SEZ region, BKPM has promised a three-hour service. Through this three-hour service, investors can get the certainty of being able to start a business, assurance of labor according to their needs, as well as the certainty in the ease of imported machine production. When needed, BKPM will provide accurate information on the availability of land for investors. With these efforts, the government hopes that foreign investment in Indonesia will increase to the maximum, and for the development of infrastructure to increase more rapidly and for economic growth to be improved.