How Batu Ampar Port Will Attract More Investors for Batam

Batam has long been a strategic economic hub in Southeast Asia. Its proximity to Singapore and its status as a free trade zone have attracted numerous businesses and investors. However, the island’s true potential is about to be unlocked with the transformational development of Batu Ampar Port.

The Plan for The Development of Batu Ampar Port

Batu Ampar, located on Batam Island, Indonesia, has become a focal point in international trade. The port is highly advantageous for shipping and services. To maximize its potential, the Indonesian government has developed a three-stage plan for its transformation.

Phase 1

The first phase, from 2023 to 2025, focuses on enhancing infrastructure and streamlining bureaucracy. The aim is to improve Batu Ampar’s ability to serve domestic cargo ships.

Phase 2

In the second phase, from 2025-2028, the government will build a new terminal. The process also will include importing six more STS cranes, adding 20 hectares of container yards, and deepening the port channel to 16 meters. This development will cost IDR 2.6 trillion.

Phase 3

In the third phase of transformation, Batu Ampar is expected to grow into an international transit port like Singapore or Tanjung Pelepas. By 2028, its cargo volume is targeted to reach 1.6 million TEUs.

What Does the Port Offer to Investors?

The Batu Ampar Port presents several appealing aspects for potential investors. These include:

Strategic Hub in Global Trade

Batam is one of the biggest islands in the Riau Islands Province, located south of Singapore. The island’s growth is mainly due to the Batu Ampar Port, central to Indonesia’s economic development. The port’s strategic location near the Malacca Strait is a significant advantage for international trade. 

The Malacca Strait is a major shipping route connecting the Indian and Pacific oceans, making it the busiest trade route in the world. Because of its strategic location, Batu Ampar Port has become a primary gateway to Indonesia and Southeast Asia.

Government Incentives

Since Batam was designated as a Free Trade Zone (FTZ) by Presidential Regulation No. 44 of 2007, the government has provided four advantages outlined in the Law on Free Ports and Free Trade, including exemption from Value-Added Tax (VAT), Luxury Goods Sales Tax (LST), and Import and export duties.

Meanwhile, the Special Economic Zone (SEZ) is designated based on Presidential Regulation No. 96/2015, with 14 investment facilitation including:

• Investment allowance
• Accelerated depreciation
• Dividend tax
• Longer loss compensation
• Tax holiday
• Exemption from Article 22 Import Income Tax (PPh)
• No VAT on imported goods
• No VAT on domestic purchases
• Exemption from VAT and/or LST
• No tax collection on goods delivery to other facility recipients
• VAT refund to foreign passport holders
• Import duty suspension
• Import duty exemption
• Excise tax exemption

Infrastructure Development

With the support of the Batam Indonesia Free Zone Authority (BP Batam), the Indonesian government has proposed a plan to develop the Batu Ampar Port into one of the leading ports. 

The aim is to improve the port’s efficiency and competitiveness, which will attract more investment and boost international trade. This development will introduce the Batu Ampar Terminal Entry Gate, which is integrated with the Auto Gate System. 

The Auto Gate System is a port facility that utilizes automation, allowing users entering and exiting the port area to be automatically recorded in the system without the need to queue. This system is part of the Batam Logistic Ecosystem (BLE).

Challenges and Opportunities

Below, you can find some key points describing the challenges and opportunities Batu Ampar Port faces.

Challenges

Like other major maritime hubs, Batu Ampar Anchorage faces congestion issues due to high traffic volume, various types of cargo, and logistical tasks. Infrastructure improvements such as terminal expansions and dock enhancements are essential to meet growing service demands and ensure smooth maritime operations.

In addition, achieving operational efficiency and environmental protection necessitates a comprehensive strategy incorporating eco-friendly practices, strategic planning, and innovative technologies.

Opportunities

BP Batam’s steps to accelerate its industrial development are primarily focused on the manufacturing industry. Since the early stages of its development, the manufacturing sector has been the mainstay of the economy. 

In addition to the manufacturing industry, Batam is also focused on developing the service industry as one of the potential sectors in Batam’s development acceleration.

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Start Your Business Journey in Batu Ampar Port

Batam Ampar Port is on the cusp of significant growth, paving the way for exciting economic opportunities in Batam. Recognizing this potential, InCorp Indonesia stands ready to empower businesses with:

• Streamlined Company Registration: Simplify your setup process and hit the ground running.
• Investor KITAS Services: Secure the necessary work permits to operate seamlessly.

Whether you’re a local or international entrepreneur, InCorp Indonesia is your trusted partner in navigating the dynamic business environment of Batam. Let us help you unlock your full potential and thrive in this thriving market.