Home Blog Batam Free Trade Zone Setup: License & Office Guide Batam | Business Licenses | Business Setup Batam Free Trade Zone Setup: License & Office Guide InCorp Editorial Team 23 May 2025 6 minutes reading time Table of Contents Understanding the Batam Free Trade Zone Benefits of Doing Business in the Batam Free Trade Zone Required Business Licenses in the Batam Free Trade Zone Office Setup Regulation in Batam Challenges When Applying for Licenses in the Batam FTZ Start Setting Up Your Business in Batam FTZ with InCorp The Batam Free Trade Zone (FTZ) has become one of Indonesia’s most attractive local and foreign investment destinations. Strategically located near Singapore, Batam offers access to global trade routes, tax incentives, and government-supported industrial infrastructure. However, while the opportunities are clear, so are the regulations. Before establishing a company in the Batam Free Trade Zone, business owners must navigate a strict licensing framework and comply with physical office requirements. This article provides a practical, step-by-step guide to help you meet these requirements and operate legally within Batam FTZ. Understanding the Batam Free Trade Zone The Batam Free Trade Zone is a designated economic area offering streamlined customs procedures, tax benefits, and investment incentives. Managed by BP Batam (Badan Pengusahaan Batam), this zone is designed to facilitate manufacturing, logistics, trade, and service-based industries. Companies registered in the Batam FTZ enjoy exemptions from VAT, import duties, and other fiscal barriers, making it a preferred location for export-oriented businesses and supply chain operations. To operate legally within the zone, businesses must obtain several key licenses and fulfill infrastructure-related conditions, including requiring a physical office address. Benefits of Doing Business in the Batam Free Trade Zone Batam remains one of Indonesia’s most attractive business hubs, thanks to its strong infrastructure, easy access to neighboring countries, and investor-friendly policies. Here are the advantages of conducting business in the Batam Free Trade Zone (FTZ): Strong Infrastructure Batam’s infrastructure is among the best in Indonesia. Electricity and clean water are reliable and on par with those in Jakarta. Roads are well-maintained, with minimal traffic in industrial areas. Hang Nadim Airport and Batam Port support the smooth movement of goods and have now expanded to handle cargo more efficiently. This makes it easier for companies to move materials and finished products in and out of Batam. Close to Singapore and Malaysia Batam is located just 20 km from Singapore, approximately 45 minutes by ferry, and shares a border with Malaysia. This strategic location is perfect for regional trade, particularly for companies seeking proximity to Singapore’s business environment while maintaining lower operational costs. Fast Licensing and Business Setup Batam uses a one-stop licensing system through BP Batam and Indonesia’s OSS-RBA platform. Business licenses and permits can be completed in about 20 working days, much faster than in most other regions. This makes it easier and quicker for investors to start operations. Tax and Customs Benefits As part of Indonesia’s Free Trade Zone policy, Batam offers: No import duty, VAT, or luxury tax on goods used for business activities Simplified customs clearance for export-import activities Exemption from VAT on many local transactions within the FTZ Established Manufacturing Hub Batam is home to well-known electronics and manufacturing companies like Panasonic, Infineon, and Schneider Electric. The government continues to support Batam as a center for: Electronics Medical devices Logistics and maritime services Digital economy initiatives READ MORE:5 Key Reasons for Doing Business in Batam Industrial ParkHow Batu Ampar Port Will Attract More Investors for BatamInsights into Investment Opportunity in Batam’s Dynamic Economy Required Business Licenses in the Batam Free Trade Zone Businesses planning to establish operations in the Batam FTZ must obtain three key licenses. These are mandatory regardless of company size or sector and are issued through the OSS (Online Single Submission) system with coordination from BP Batam. Industrial Business License An Industrial Business License (Izin Industri) is required for any company engaging in manufacturing, processing, or industrial activities. This license serves as the foundational permit that legally allows you to operate within the industrial sector in the Batam Free Trade Zone. Key application steps include: Submitting a company profile Declaring the scope of industrial activity Providing floor plans, machinery lists, and production details Industrial Estate License If your business is located within a registered industrial estate (such as Batamindo, Panbil, or Kabil), an Industrial Estate License (Izin Kawasan Industri) must be obtained to confirm that your operations are permitted in that location. Compliance with industrial estate zoning and infrastructure requirements is essential for tenants in these zones. Environmental Impact Assessment (AMDAL) Environmental licensing is required for companies whose operations may impact the environment. Depending on the business type and scale, companies must submit an AMDAL (Environmental Impact Assessment) or a UKL-UPL (Environmental Management and Monitoring Plan). These permits ensure businesses identify potential environmental risks and implement appropriate mitigation measures. They are essential for manufacturers, warehouses, and logistics companies involved in chemical use, emissions, or large-scale water consumption. Office Setup Regulation in Batam In Batam, all businesses—inside or outside the Batam FTZ—must have a verified physical office for company incorporation. This strict local regulation does not allow the use of a virtual office for business registration purposes. The requirement ensures regulatory oversight, supports field verification, and confirms that businesses operate within approved zoning areas. Without a physical office, your business license application will not be processed. How to Secure a Physical Office in the Batam Free Trade Zone When selecting a location, ensure the space: Aligns with your business activity Falls within approved zoning areas Can be verified during the licensing process Finding the right physical office is essential—not just for compliance, but also for smooth operations and successful licensing. InCorp Indonesia (an Ascentium Company) offers ready-to-use, compliant office spaces in Batam, including serviced offices in prime business districts and industrial zones. All our spaces align with local regulations, making them suitable for company registration and business license approval. Challenges When Applying for Licenses in the Batam FTZ Despite clear regulations, many investors face delays or complications due to: Confusion between OSS and BP Batam processes Delays in AMDAL approvals Incomplete documentation or non-compliant office addresses To reduce risk, InCorp Indonesia (an Ascentium Company) can assist you by mastering the complex legal and operational framework of the Batam Free Trade Zone in depth. Guide to Doing Business in Batam Mailchimp Free eBook Batam Subscribe Full NameEmail I have read InCorp's Privacy Policy and agree to InCorp using my information provided to contact me about related content, and services.*Download Start Setting Up Your Business in Batam FTZ with InCorp Setting up a business in the Batam Free Trade Zone opens the door to regional trade, tax benefits, and scalable growth—but only if your licenses and office setup are in full compliance. InCorp Indonesia (an Ascentium Company) provides end-to-end support to help you set up your business in Batam with confidence and full compliance. Here’s how we assist: Business Licensing: We handle your licenses through OSS and BP Batam, ensuring you meet all local and national requirements. Office Solutions: Serviced offices are available and fully compliant with company registration. Complete the form below to start your business in Batam FTZ and ensure your setup is smooth, compliant, and built for long-term success. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions How A PMA company can be eligible to conduct import activities? What licenses and procedures are necessary while engaging in import-related activities? A PMA company in Indonesia must obtain an NIB, which also functions as: Importer Identification Number (Angka Pengenal Impor or API) Producer Importer Identification Number (Angka Pengenal Impor Produsen or API-P), which is required for the import of machinery and equipment, goods, and materials used in production. General Importer Identification Number (Angka Pengenal Impor Umum or API-U), which is required for the import of specific goods for trading purposes, is grouped under one section in the Customs Classification System. Customs Identification Number (Nomor Identitas Kepabeanan or NIK), It functions as an identifying document for the applicable Customs and Excise authorities during the customs clearance process. Some goods may face limitations or restrictions on importation in Indonesia, potentially requiring additional approval from the Ministry of Trade. Recommendations from technical ministries like Industry or Agriculture may influence these approvals. What are the functions and responsibilities of a PMA company’s board and management? Indonesian Company Law establishes a two-tier governance system with Directors managing day-to-day operations and representing the company, while the Board of Commissioners supervises and advises them. The articles of association may empower board of Commissioners to provide consent or assistance to Directors for specific legal acts. Can investors own shares with preferential rights? Under Indonesian Company Law, shareholders can hold shares with various preferential rights, such as voting rights, nomination rights for board members, priority dividend or liquidation proceeds, and options for conversion or withdrawal after a set period. Can you provide pricing examples for company registration services? To provide you with accurate pricing information for our product registration services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, don’t hesitate to contact our consultants. Get in touch with us. Lead Form Notify Full NameEmailPlease provide corporate email where possiblePhone NumberOffice SetupWhich city are you planning to expand into?JakartaSemarang/Central JavaBali/LombokBatam/SumateraSurabaya/East JavaOther ProvincesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Package (20% OFF)[SPECIAL PACKAGE] Product Registration + License Holder (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (25% OFF) + Office Space (Private Office 30% OFF)[SPECIAL PACKAGE] Company Registration + Investor KITAS (25% OFF)[SPECIAL PACKAGE] Accounting + Tax Services+ Annual Fintax Report (20% OFF)[SPECIAL PACKAGE] Payroll Services for Executive Role (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (20% OFF) + Office Service (25% OFF)[SPECIAL PACKAGE] Company Registration + Micro Finance Services (25% OFF)[SPECIAL PACKAGE] Property Assistance: Due Diligence + AJB Purchase/Lease Agreement (25% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesServices Company Registration Renting Virtual and Serviced Office Mergers and Acquisitions Business and Import Licenses Corporate Recovery and Insolvency Closing of Company (Dissolution) Land and Property Ownership Shelf Company Local NomineeServices Accounting and Tax Reporting Audit and Review Transfer Pricing Compliance Tax RefundHuman Resource Sub Services Payroll Outsourcing Employer of Record Recruitment and HR Establishment Employment ServiceServices Business Visa Work Permit and KITAS Dependent Visa (Spouse and Family) OtherBusiness Visa Subservices Business Visa Visit Visa Visa ExtensionServices Medical Device Beauty (Skincare and Cosmetic) Food and Beverage Health Supplement Household Product Halal Certification TrademarkServices Legal Consultation Legal Agreement Service Due Diligence and Background Check Company Documents RevisionBusiness Advisory Business Advisory Services ESG Reporting & Advisory Internal Audit Risk ManagementMore Services Market Research and Analysis Local Distributor and Partner Bank AccountMessageSubmit What you’ll get A prompt response to your inquiry Knowledge for doing business from local experts Ongoing support for your business Disclaimer The information is provided by PT. 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