Batam Industrial Park: 5 Secrets to Unlocking Growth

5 Key Reasons for Doing Business in Batam Industrial Park

  • InCorp Editorial Team
  • 23 June 2025
  • 7 minutes reading time

Batam Industrial Park is a premier choice for businesses expanding in Southeast Asia. Strategically situated near major shipping routes and offering attractive incentives, Batam combines logistical advantages with a business-friendly environment.

What is the Purpose of An Industrial Park?

Industrial parks are vital in boosting economic growth in developed and developing countries by creating a concentrated hub for businesses and industries to thrive. These parks provide many advantages that enhance economic activities and overall development. The essential functions of industrial parks encompass:

1. Building Infrastructure

Industrial parks offer essential infrastructure like roads, utilities, and communication networks, making it easier for businesses to establish themselves without the hassle and expense of building from scratch.

2. Saving Costs

By providing centralized services and shared resources like security and waste management, industrial parks help businesses save money.

3. Simplified Regulations

Industrial parks often streamline regulatory processes and provide one-stop service centers, simplifying permits and compliance procedures for businesses.

4. Cluster Effect

Industrial parks encourage collaboration, knowledge sharing, and synergy among companies by housing multiple businesses close together, fostering innovation and competition.

5. Job Opportunities

Industrial parks create numerous job opportunities for the local workforce. As industries within these parks grow, they require skilled and unskilled labor, leading to increased employment rates.

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The Role of Industrial Parks in Economic Development

For several reasons, industrial parks are vital in boosting economic development, making them crucial assets for developed and developing countries. Their multifaceted benefits make them indispensable components of a country’s economic strategy, driving sustained growth and development. Those are:

1. Drawing Foreign Investment

Industrial parks often attract foreign direct investment (FDI). Governments use these zones to attract international companies to expand into new markets.

2. Boosting Exports

Businesses in industrial parks typically focus on exporting goods, which can contribute to a country’s export growth.

3. Enhancing Skills

The presence of diverse industries in industrial parks creates opportunities for skill development and knowledge transfer.

4. Promoting Regional Growth

Industrial parks are often strategically located in areas in need of economic development. As these zones expand, they bring infrastructure improvements, higher living standards, and an enhanced quality of life to neighboring communities.

5. Sharing Technology

Companies within industrial parks are encouraged to innovate and adopt advanced technologies, facilitating technology transfer within the host country.

The Role of Industrial Parks for Business

Due to various factors, industrial parks are essential for business growth and development. They provide businesses access to critical infrastructure, resources, and services, creating an environment conducive to innovation and economic expansion.

1. Integrated Infrastructure

Industrial parks provide all-in-one hubs with integrated infrastructure, making operations efficient for manufacturers and service providers.

2. Tailored Spaces

Beyond generic offerings, industrial parks tailor their spaces to meet specific business needs, contributing to overall success.

3. Modern Infrastructure

Industrial parks maintain and enhance integrated transportation networks within their premises.

4. Dedicated Management

Industrial parks offer a dedicated on-site management team, ensuring smooth operations and a sense of security and community among partners.

5. Increased Productivity and Cost Savings

Operating within an industrial park allows businesses to focus entirely on core activities without the complexities of managing standalone facilities.

6. Collaborative Environment

Industrial parks foster business collaboration and synergy, leading to symbiotic partnerships, knowledge exchange, and resource sharing.

Why Invest in an Industrial Park in Batam?

Batam Industrial Park: 5 Secrets to Unlocking Growth

Batam offers various incentives for foreign investors to establish a presence, such as tax exemptions, simplified regulatory processes, and a strategic location near major shipping routes.

1. Prime Location

  • Situated near key international sea routes like the Malacca Strait and the Singapore Strait.
  • Proximity to ASEAN countries with a combined population of 640 million.
  • It is just 20 km from Singapore, accessible within a 45-minute ferry ride.

2. Appealing Incentives

  • Exemptions from import duties are granted on machinery, equipment, raw materials, and spare parts used for export-oriented production.
  • Eligible imports are exempt from VAT and luxury goods sales tax.
  • Article 22 income tax exemption on production-related imports.
  • Generalized System Preferences (GSP) facilities reduce export-import duties to recipient countries.
  • Indonesia has double taxation avoidance agreements with 56 countries.

3. Modern Infrastructure

  • Batam’s international airport features the country’s longest runway at 4,025 kilometers.
  • There are five international passenger ports and four cargo ports.
  • Six bridges connect Batam, Rempang, and Galang islands.
  • Seven reservoirs meet industrial and consumer water needs. Wastewater treatment plants (WWTP) can process 230 liters/sec.
  •  538.95 MW of installed electricity capacity. 1,670 km of constructed roads.
  • Telephone capacity of 111,700 line units and high-speed Fibre Optic internet reaching 1Gbps.
  • BP Batam’s IT service center has disaster recovery benefits.

4. Additional Advantages

  • Competitive investment costs, particularly for export-focused industries.
  • A clean and healthy environment with a balance between green spaces and industrial areas.
  • Security and comfort, as Batam serves as a cultural melting pot in Indonesia.

List of Batam Industrial Parks

For individuals interested in setting up a business in Batam Industrial Park, there is a highly recommended company that you should consider partnering with. 

  • Batamindo Industrial Park
  • Latrade Industrial Park
  • Bintang Industrial Park 2
  • Lytech Industrial Park
  • Cammo Industrial Park
  • Malindo Industrial Park
  • Citra Buana Industrial Park 1
  • Megacipta Industrial Park
  • Citra Buana Industrial Park 2
  • Nongsa Digital Park
  • Citra Buana Industrial Park 3
  • Panbil Industrial Park
  • Dragon Industrial Park
  • Puri Industrial Park 2000
  • Executive Industrial Park
  • Sarana Industrial Point
  • Hijrah Industrial Estate
  • Sekupang Industrial Estate
  • Horizon Industrial Park
  • Taiwan International Park
  • Indah Industrial Park
  • Tunas Industrial Estate
  • Kabil Integrated Industrial Estate
  • Union Industrial Park
  • Kara Industrial Park
  • Wiraraja Industrial Park

Reasons Why Investors Should Choose Batam Industrial Park for Their Business

Batam, a dynamic and lively Southeast Asian hub, is increasingly being recognized as a premier choice for conducting business. Here are the reasons why:

1. Strategic Location and Connectivity

Its proximity to Singapore provides quick access to global markets. Regular flights to Southeast Asian cities allow entrepreneurs to explore the region and expand their business networks.

2. Efficient Infrastructure and Services

Hang Nadim Airport’s modern facilities ensure a seamless travel experience for business travelers.

3. Investment Opportunities and Incentives

As a free trade zone, BP Batam provides a favorable environment for industries like manufacturing and logistics. It streamlines regulations and offers incentives like tax cuts, encouraging foreign investment.

4. Robust Industrial Ecosystem

Batam’s diverse industrial sectors, including electronics and shipbuilding, foster creativity and collaboration.

5. Quality of Life and Cultural Vibrancy

Batam offers an excellent quality of life with access to modern amenities and beautiful natural surroundings. Its multicultural environment adds to its appeal, providing opportunities to experience diverse traditions, arts, and cuisines.

Guide to Doing Business in Batam & Surabaya​

Mailchimp Free eBook Batam

Start Investing in Batam Industrial Park with InCorp 

Batam Industrial Park is a gateway to Southeast Asia’s thriving economy, offering numerous opportunities for foreign investors. InCorp Indonesia (an Ascentium Company) simplifies your entry by expertly handling company registration, Investor KITAS processing, and more. 

We will assist you through the entire setup process, ensuring a smooth launchpad for your success in Batam’s dynamic business environment. 

Our comprehensive services include expert assistance with company registration and Investor KITAS processing, ensuring a seamless and efficient setup process for your venture.

By filling out the form below, you can take advantage of Batam’s thriving investment potential and set the stage for success in this vibrant business environment.

Verified by

Ales Cina

Consulting Manager at InCorp Indonesia

Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights.

Frequently Asked Questions

    The procedures for (voluntarily) liquidation typically involve the following steps:

    • Conduct a general shareholder meeting to approve the liquidation and the liquidator’s nomination
    • Notify the Ministry of Law and Human Rights as well as the creditors of the liquidation and the distribution plan for the assets by newspaper notice
    • All business licenses and tax numbers should be canceled or revoked; the tax office will conduct a tax audit to revoke the tax number
    • Make sure creditors are paid and that any liquidation funds are distributed to shareholders (if any)
    • Conduct a general meeting of shareholders to approve the liquidator’s discharge and acquittal
    • Notify the Ministry of Law and Human Rights of the liquidation’s outcome. After receiving the notification, the Ministry of Law and Human Rights will deregister the company’s status as a legal entity and remove its name from the Company Registry
    • Release the liquidation’s outcome in a newspaper

    Completing the liquidation process can take around two years.

    A foreign-owned company (PT PMA) in Indonesia is a popular choice among foreigners to set up a business. Foreign investors must check Indonesia’s Positive Investment List to see which businesses are open to foreign direct investment.

    A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.

    • Import facilities
      Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production.
    • Tax holiday
      The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status.

      • Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.

    • Tax allowance
      For companies in certain designated areas or regions, the government may provide the following tax concessions:
      Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
      Accelerated depreciation and/or amortisation deductions
      An extension of tax losses carried forward for a maximum of ten years
      A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
      The applicant eligible has to meet high-level-criteria for the above tax facilities:
      High investment value or for export purposes
      High manpower absorption
      High level of local content
    • Investment allowance
      The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project.
    • Super deduction
      This facility could be granted to certain businesses, such as:
      60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
      Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
      Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia.

    For tax purposes in Indonesia, companies must maintain their books in Rupiah, using the Indonesian language, and store them within the country. Exceptions for using USD and English in bookkeeping require prior notification to the authorities and any use of languages other than Indonesian needs approval from the Ministry of Finance.

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Disclaimer

The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

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