industrial parks in indonesia

Invest in Industrial Parks in Indonesia and Your Business Will Grow

  • InCorp Editorial Team
  • 9 January 2024
  • 4 minute reading time
Indonesian industrial parks are considered one of the most effective tools to generate employment, boost the economy, and increase market competitiveness.

This industrial acceleration is able to provide an institutional framework, modern infrastructure, and services that can’t be seen in the rest of the archipelagos in Indonesia, thus the creation of Indonesia industrial park.

As a result, having your manufacturing plant located in the perfect area plays a significant role in leading your business towards success. The facilitation of investments in these areas along with a number of incentives provided through the reform package, making them even more enticing for investors.

In this article, you will see some of the advantages of finding your factory a permanent home in one of the well-positioned industrial parks.

Definition of Industrial Parks

Indonesian Government Regulation No. 24/2009 defined that an industrial park as an area in which industrial activities are gathered, and supported with complete facilities and infrastructure.

Industrial parks are developed and managed by reputable and sometimes multinational developers. Statistics from the Industrial Estate Department in Indonesia (Himpunan Kawasan Industri Indonesia, HKI) show that in 20 regions across Indonesia, there is a total of 73 industrial parks.

The chairman of HKI, Sanny Iskandar mentioned that the rapid progress of a number of industries in these industrial parks can be observed, including food and beverages, automotive components, and consumer products.

Especially for large automotive companies, at least 100 ha of industrial land are utilized to build just one automotive factory.

Invest in industrial parks in indonesia

Advantages of Indonesia Industrial Park

Along with the attractive incentives provided by the Indonesian Government for investors, Industrial parks also offer a cost-effective and efficient way for you to build your plant. Here are some of the main benefits:

Complete Infrastructure and Facilities

Integrated infrastructure and facilities are available in Indonesia industrial park, for factories to access electricity, gas, water, and roads easily specially built for the development of these areas.

Hence, the existing infrastructure allows investors to save cost without bearing the cost of constructing the infrastructure from scratch.

Aside from that, an industrial park is at a location that makes transport and distribution of factory goods much more convenient, through major ports and highways surrounding the area.

No Construction License Required

A lot of the manufacturing licenses approval depends on where you build your factory. Another good thing that comes from building your plant in an industrial park is that there is no need for you to obtain a building permit to do that.

This perk not only saves you a substantial amount of initial investment capital but also speeds up the market entry in Indonesia. Apart from a building permit, most Industrial Parks have already obtained related environmental permits.

This is a huge benefit as compared to building a plant in some specific areas that might prohibit such activity. For instance, residential areas are often the no-development-zone for a property.

Existing Land

Finding land and make it become your own for your manufacturing plant can be the hardest part. The bureaucratic process is tedious and lengthy. Furthermore, you might have to deal with residents around your factory if they claim that operations of your factory have caused any disturbance.

Thus, building your factory in an industrial park that is aligned with all criteria and regulations will help you avoid unnecessary conflict—making your business venture less stressful and more successful.

Alluring Government Incentive

Government Regulation (PP) No. 142/2015 concerning industrial estates was enacted to grant tax incentives to investors building their plants in industrial parks. The amount of tax incentives is based on the grouping of Industrial Development Zones (WPI).

The incentives include exemption or reduction of local government taxes. Examples of such local government taxes are Tax on Land and Building, Fees for the Acquisition of Rights to Land and Buildings, Street Lighting Tax, etc.

Kendal Industrial Park in Semarang

Kendal Industrial Park in Semarang can be one of the best industrial parks to build your factory and do business in Indonesia—due to its cost-competitiveness, integration, and sustainability.

It was opened in 2016 and has since become a hotspot for investors from all over the world. It is the first major industrial investment between Indonesia and Singapore.

Being the capital of the province of Central Java, Semarang is strategically located near major transport hubs and interconnected with the neighboring countries.

Looking for an industrial park to start your business in Indonesia? Cekindo is here to help. With offices in Jakarta, Semarang, and Bali, we can find the best place for you to invest.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

Lead Form

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.

Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.