Home Blog Why Surabaya is The Perfect Location for Manufacturing Business in East Java Business Setup | Surabaya Why Surabaya is The Perfect Location for Manufacturing Business in East Java InCorp Editorial Team 9 July 2025 7 minutes reading time Table of Contents Surabaya Manufacturing Business: A Gateway to Eastern and Western Indonesia Why Should Invest in Surabaya The Recent Developments of Surabaya Surabaya Manufacturing Business: Industrial Estates Surrounding The City Incentives in Setting Up A Business in Industrial Estate Surabaya Manufacturing Business: Commence it with InCorp Indonesia’s attractiveness as an investment destination stems from a combination of its advantageous natural resource endowments and geographically strategic location. Indonesia, a diverse archipelago nation with over 300 ethnic groups, continues to be Southeast Asia’s largest economy. The country’s growing young population and increasing urbanization have made it one of the world’s fastest-growing consumer marketplaces. Between 2000 and 2015, the proportion of the population living in urban areas increased from 42% to 54%. By 2030, 71% or 209 million people are predicted to live in urbanized areas. While the capital city of Jakarta and The Island of Gods Bali are in the spotlight for doing business in Indonesia, the rest of the archipelago has much more to offer. Surabaya, the capital city of East Java, is one such place with a treasured potential for conducting business. Surabaya Manufacturing Business: A Gateway to Eastern and Western Indonesia Despite the prevalence of the Covid-19 pandemic, East Java’s economic performance is commendable as it grew by Rp587.33 trillion in Quarter-I 2021, as assessed by Gross Regional Domestic Product (GRDP). East Java’s economy is strongly backed by the manufacturing sector (23.68%), the trade sector (21.11%), and the agricultural sector (12.18%), contributing 56.97% to its GDP. As the capital of East Java, Surabaya is quickly becoming a hub for doing business and investments. Surabaya’s investment in 2020 exceeded IDR 64 trillion, a significant increase from IDR 62 trillion in 2019. The investments consisted of Foreign Investment (PMA) of IDR 1.5 trillion and Domestic Investment (PMDN) of 62.55 trillion. READ MORE:Insider Tips on Import and Export Business in SurabayaWhy You Should Establish a Manufacturing Company in Surabaya Why Should Invest in Surabaya Various key factors are influencing foreign and domestic investors to set their footprints in Surabaya are: Strategic Location Surabaya is the commercial hub of eastern Indonesia and is known as the “gateway to the East.” It serves as a crossroads for all shipments to and from the east coast of Java. Moreover, the port of Surabaya, Tanjung Perak, continues to be a major economic engine. The port is now managed by Pelindo III, a governmental operator in charge of 43 ports around the nation. Tanjung Perak handles 13 international shipping lines to service dozens of destinations, including Singapore, Pusan, Hong Kong, and Manila, because of its strategic position. Growing Middle Class According to Surabaya’s Central Bureau of Statistics, the area’s gross regional domestic product (GRDP) was IDR 451.5 trillion ($34 billion) in 2016, indicating an 11% increase from 2015. It further spiked the per-capita income of IDR 10.4 million (USD 784) to IDR 15.8 million (USD 1190). As a result, Surabaya is witnessing higher consumption levels and a burgeoning middle class. Ideal Place for Property Investment Based on accessible land and high demand for property, realtors are enthusiastic about property investments in Surabaya. The local population is more optimistic to invest in real estate than other investment areas. Surabaya accounts for more than 80% of the buyers and has more land available than Jakarta. Moreover, economists predict that land prices will rise quickly in Surabaya due to the shortage of availability of land over time. Seamless Licensing and Business Permit Indonesia’s Presidential Regulation Number 97 of 2014 is a response from the government to the era of free investment in Indonesia. Under PR 97/2014, Surabaya Government established the Surabaya Single Window permit service, where the service system will facilitate people who want to take Trading Business Permit (SIUP). This also could be another advantage for Surabaya manufacturing business. The Recent Developments of Surabaya With growing interest from foreign businesses to invest in Surabaya, the city has made significant initiatives in infrastructure development to support economic and business growth. An Australian Government-supported institution has also collaborated with the Indonesian government to strengthen infrastructure policy, planning, and investment in Surabaya. Notable projects include: Suramadu Bridge: A key infrastructure project connecting Surabaya to the neighboring island of Madura, fostering regional connectivity and development. Autonomous Rapid Transit (ART): A cost-effective transit system designed to enhance business connectivity and improve Surabaya’s public transportation network. Surabaya Regional Railways Lines (SRRL): Supported by a €250 million loan from Germany’s Bank, this project involves constructing an electric commuter rail system to connect Surabaya with surrounding areas, promoting sustainable urban mobility. West Outer Ring Road (JLLB) and East Outer Ring Road (JLLT): These strategic projects aim to reduce traffic congestion and stimulate economic growth by connecting various city regions. Menganti-Wiyung Road Construction: A new road project to connect Surabaya’s western and central regions, improving mobility for residents and logistics. Gunungsari Drainage Diversion: A key initiative designed to mitigate flooding while serving as a strategic link between Surabaya and Gresik. Surabaya Manufacturing Business: Industrial Estates Surrounding The City The government has mandated* industrial businesses to operate their activities in industrial estates in order to promote equal economic growth in the country. As the second-largest business center in the archipelago, East Java offers a bunch of industrial estates where foreign investors can opt to set their footprint in. Here are some of the notable location to support manufacturing business in Surabaya: Industrial EstateLocationKey SectorSurabaya Industrial Estate RungkutSurabayaFood and beverage, Steel, Automotive, Electronic and Circuit Parts, Papermill, and Basic Chemical IndustryJava Integrated Industrial and Port Estate (Special Economic Zone)Gresik Regency (30 km north of Surabaya)Warehouse and Shipping Yard, Food, Steel, Plastic, and Glass industry.Ngoro Industrial ParkMojokerto Regency (50 km south of Surabaya)Plastic, Paper mill, Feed mill, and Garment industry.Pasuruan Industrial Estate RembangPasuruan Regency (60 km south of Surabaya)Electronic Manufacturing, Feed mill, Plastic, Bottled Water, Cigarette, and Garment industry *This mandate is excluded for companies with the following conditions: (1) Companies operating in the region that do not have industrial estates or its industrial estates have been fully occupied; (2) Small and medium-sized companies that do not cause environmental impact; (3) companies that process special raw materials and/or whose production processes require a specific location. READ MORE:5 Key Reasons for Doing Business in Batam Industrial ParkRenewable Energy Investment in The Manufacturing Sector Incentives in Setting Up A Business in Industrial Estate In addition to its facilities and easier access to ports and major transportation routes for goods distribution and logistics, the Indonesian Government also offers attractive incentives for foreign investors who set their business operations in these Industrial Estates. Refer to the table below for more details: Industrial Estates IncentivesDeveloping Industrial Estates (Located in Java Island) 30% net Income Tax reduction for 6 years (5% per year) Value Added Tax (VAT) exemption Import Duty Exemption Potential Industrial Estates Category I (Located in South Sulawesi, East Kalimantan, North Sumatera)Potential Industrial Estates Category II (Located in Papua and West Papua)10-100% Income Tax reduction for 5-15 years Value Added Tax (VAT) exemption Import Duty Exemption Surabaya Manufacturing Business: Commence it with InCorp Setting up a manufacturing business in Surabaya is indeed lucrative, however, it comes with its fair share of challenges. While you focus on the core business aspect of your company, InCorp’s registers your company with the least hassle. InCorp also conducts due diligence and market research to rule out any loopholes. Our consultants readily aid you to obtain the necessary product registration and licenses like business and import licenses. We also provide professional advice and save you the management stress with our HR and recruitment services. To know more about how InCorp’s solutions can help you make investments in Indonesia, please fill out the form below or talk to an expert on our chatbot. Read Full Bio Verified by Teddy Willy Branch Manager - Surabaya Office at InCorp Indonesia With 10 years of experience in business consultancy, Teddy Willy offers expertise in financial and production auditing, sales and marketing, channels and distribution, supply chain management, and human resources for every business sector in Indonesia. Frequently Asked Questions What duties do investors have when they own shares in a company that has been liquidated? Shareholders must appoint a liquidator during the shareholders’ meeting approving liquidation. If no liquidator is appointed, the Board of Directors assumes the role. Creditors can submit claims within two years of the liquidation announcement, provided there are proceeds available. If proceeds have been distributed, shareholders must return them proportionally to settle creditor claims. Whereas employee termination packages vary based on employee status, service years, and reason for liquidation. How much is the minimum fund required to establish a PT PMA business in Indonesia? The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location. What is the minimum shareholder requirement to incorporate a PT? The minimum number of shareholders to incorporate a PT is two What kind of license does a PMA company need to get? In Indonesia, the licensing system has been updated with the implementation of the Omnibus Law. Businesses are categorized into four risk levels based on the PMA company classification. Licensing requirements vary accordingly, with three main types: Business Identification Number (NIB) Low-risk businesses needing only an NIB Standard Certification Standard Certification is necessary for medium-low and medium-high-risk businesses Licenses/Permits High-risk businesses require licenses/permits Additionally, basic requirements, including business location, must be met. Many licensing processes are facilitated through the Online Single Submission (OSS) platform managed by the Investment Coordinating Board (BKPM). Get in touch with us. Lead Form Newsletter 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 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. 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. More on Business Setup Company Incorporation Indonesia: Learning from the Expert Read more How to Open a Local and Foreign Currency Bank Account in Indonesia? Read more Exploring the Biggest Industrial Park in North Sumatra Read more