Special Economic Zones
Where an incentive is worth the structure it asks for.
Indonesia designates special economic zones, each with a declared focus — manufacturing, logistics, digital, health, tourism — and each offering facilities to investors who locate there and meet the conditions.
The facilities are real and so are the conditions. A tax holiday is granted against a committed investment in a permitted activity in a designated place, and the commitment is what is enforced if the project changes shape.
This is a site-selection decision with legal consequences, not a tax trick. We would rather you chose a zone because it suits the business than because of a headline rate.
Scope
We can assist with the following, and more.
Choosing a zone
- Which zones are designated, and for which activities
- Whether your licensed activity qualifies there
- Infrastructure, labour and logistics as they actually are
- What committing to a location costs you in flexibility
Facilities
- Tax facilities available in a zone, and their conditions
- Customs and import treatment inside the zone
- Minimum investment and employment commitments
- Application, and the evidence it rests on
Setting up there
- The company and licences the zone activity requires
- Land and building rights inside a zone
- Agreements with the zone administrator or developer
- Construction and occupancy approvals
Keeping it
- Reporting against the commitments made
- What happens where the investment is not realised
- Changing activity, scale or location afterwards
- Revocation, and how exposure is reduced
Conditions
A facility is a commitment about the future.
A tax facility is granted on the strength of what you say you will invest, in what, by when, and with how many people. Those statements become conditions.
Projects change. Scale slips, activity shifts, a line is added. Each of those can put a facility at risk, and the review arrives after the money has been spent.
We would rather commit to a realistic figure and keep the facility than a flattering one and lose it.
Questions
Frequently asked questions.
What is a special economic zone?
A designated area with its own administration and investor facilities, each zone focused on particular activities.
Which zone should we be in?
The one whose designated activities match yours and whose location suits the business. The facility should be the second consideration, not the first.
What facilities are available?
Tax facilities, customs treatment and streamlined licensing, all with conditions. The specifics differ by zone and by regulation, so we give them to you current and dated.
Do we still need a company?
Yes. A zone changes where and on what terms you operate, not whether you need an Indonesian company.
Can we lose the facility?
Yes, where the commitments behind it are not met. That is the main thing to plan around.
Is a zone worth it for a small investment?
Often not. The compliance that comes with a facility has a fixed cost, and below a certain scale it outweighs the benefit. We will say so.
Next step