Investment Priority Business Field

Before, all of us must be very familiar whereas the government always regulate the business field which is closed and opened with requirements for investment. The regulation regarding this matter is often change over time. However, in 2021, the government has revoked Presidential Regulation Number 44 of 2016 concerning Business Fields that are Closed and Business Fields that are Open with Requirements for Investment ("Perpres 44/2016") and replace it with Presidential Regulation Number 10 of 2021 concerning Investment Business Field ("Perpres 10/2021"). Although the government still stipulates several closed business field and business fields which open with certain requirements for investment, it is clear that through this Perpres 10/2021, the government's focus has changed. This change can be seen clearly from the initial articles which did not focus on closed business field and business fields which open with certain requirements, but instead focused on business fields that were open for investment. When explored intensely, the list of business fields open with certain requirements is reduced.

Business field which are open for investment shall be divided into 4 (four) field, as follow:

1. Priority Business Field;

2. Business field allocated or partnership with Cooperative and Micro, Small and Medium Business;

3. Business Field with certain Requirements;

4. Business Field which is not included in letter a, b and c which may be engaged by all Investors.

What are the criteria for business field which categorized as the priority business field pursuant to this Presidential Regulation? Priority business field constitutes as business field which comply to the criteria, as follows:

1. National Strategic Program/Project: 

2. Capital Intensive;

3. Labor Intensive;

4. Pioneer Industry;

5. Export orientation/import substitution; and/or

6. Orientation in research, development, and innovation activities.

The list of Priority business Field is set forth clearly in the Attachment I of Perpres 10/2021.

Investors who invest in priority business fields are even entitled to get fiscal incentives and non-fiscal incentives. The fiscal incentives consist of incentives in the taxation sector in the form of tax allowances, tax holidays and investment allowances and incentives in the customs sector in the form of exemption from import duties or imports of machinery and goods and materials for industrial development or development in the context of investment. The government also provides non-fiscal incentives which include ease of business licensing, provision of supporting infrastructure, guaranteed energy availability, guaranteed availability of raw materials, immigration, employment and other conveniences in accordance with the provisions of the prevailing laws and regulations.

With the various facilities that have been offered by the Indonesian government, especially for priority business fields, we hope that more investors will invest in Indonesia.

Suria Nataadmadja & Associates Law Firm

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