In recent years, Surabaya has affirmed its leading role in the country’s economy with the continuous increase in investments, especially the foreign direct investments. Business in Surabaya, then, has been filled with many foreign investors.
According to a report by the Ministry of Planning and Investment, the food industry (UKM) of small-medium enterprises (SMEs) is the largest contributor to the investment spike. Service sectors such as hotels and restaurants have also contributed significantly to the burgeoning investment.
The investment value of the city has exceeded the target IDR 41.6 trillion set for 2018, reaching IDR 50.4 trillion, reported by One-Stop Integrated Services and Investment Service (DPM- PTSP).
Even with the excellent result, the government of Surabaya would still like the investments to go beyond the target value of IDR 45 trillion in 2019, in order to become one of the world-class international destinations for business opportunities such as trades and services.
In this article, you will see why the city of heroes has attracted so many business ventures and investors, and the city’s relentless effort to bring Surabaya to a heightened level to compete with other big cities in the world.
With the natural tourism potential, Surabaya has been awarded the “Best Tourism City” at Yokatta Wonderful Indonesia Tourism Award. This competition recognises cities for their “outstanding commitment, performance, innovation, creation and leadership in developing regional tourism” and the city topping the list of ten best tourist destinations indeed became one the investor’s favourite investment heaven in Indonesia.
The investments mostly come from Japan, China, Singapore, South Korea and other middle-east countries that have recently emerged in the investment scene — Oman, UAE and Saudi Arabia. The increase of investment can also be observed in the rise of a business license application.
As of 2018, 9657 business licenses have been registered. Among those business licenses, there are 3 domestic capital companies (PMDN), 44 foreign-owned companies (PMA) and 9610 non-entities such as micro, small and medium enterprises (MSMEs).
The government of Surabaya cooperates with several stakeholders to work on the strategic ideas in enhancing and developing investments in the city. They also organised events for investment promotion such as the one held at the Diamond Meeting Room, Grand City Mall Surabaya on July 26, 2018.
In 2018, the city already achieved the target by the first quarter. Therefore, the city is also optimistic about the investments in 2019 — Surabaya’s investments are expected to exceed its goal and increase by at least 5%, or even 20%.
Unceasing efforts have been put into the progress by the government to bring more investors to the city. One of the initiatives is to improve the city’s infrastructure and to enhance the city’s appearance so that the investors will see the improvement Surabaya is making. Other than that, regional zoning needs to be done to stretch the investment opportunities.
For instances, property investments are now concentrated in the West Surabaya region, while service investments are located in the city centre. With the regional zoning placement, Surabaya is destined to become an extraordinary investment haven.
According to the Tourism Board of Indonesia (DEPARI), other supporting factors that boost the investments is the easy and convenient business licensing via the Surabaya Single Window (SSW).
Various policies implemented recently to decrease the bureaucracy and simplify the investment processes have also pushed the investment amount by another 20%.
The rampant construction of hotels in Surabaya further shows that Surabaya is indeed the favourite destination for investors. Currently, the city has 251 units of hotel buildings with 42 thousand rooms. This makes foreign business owners or investors reside in Surabaya even though their businesses are mostly outside Surabaya.
Surabaya has gained prominence as an optimal destination for business development. As Cekindo is closely monitoring the market trends in Surabaya, we can provide tailor-made business solutions for both domestic and foreign entrepreneurs anywhere in Indonesia, including Surabaya. Talk to us now by filling in the form below or visit our offices in Jakarta, Bali and Semarang.