General Questions

What makes Batam outstanding in comparison to other regions in Indonesia as an investment destination?

Batam, as one of the main destinations for foreign investors, offers many advantages, partly due to its strategic location which is only 20 km away from Singapore and relatively safe from natural disasters due to its location outside the ring of fire, making it unlikely to experience earthquakes or tsunami.

Few countries from this region, including the Philippines, Malaysia, and so on offer income tax incentives for companies that move manufacturing to their countries. Are similar benefits available for manufacturing investments in Batam?

The Indonesian government offers a tax incentive program “Tax Holiday” with the following requirements:

  • Falls into the pioneer industry category*
  • Industry with wide interdependency
  • Provides added value and high externality
  • Introduces new technology
  • Posseses strategic value for the national economy
  • A minimum investment value of Rp 100 billion
  • Possesses Indonesian legal entity status
  • An investment which has not been issued with the decision or notification of tax holiday approval or rejection
  • Meet the provisions based on the ratio between debt and equity with regard to income tax calculation


  • 100% deduction from total corporate income tax payable for a Rp 500 billion minimum new investment.
  • 50% deduction from total corporate income tax payable for a Rp 100 billion – <Rp 500 billion new investment.
  • 5 year tax deduction period for a Rp 500 billion – <Rp 1 trillion new investment.
  • 7 year tax deduction period for a Rp 1 trillion – <Rp 5 trillion new investment.
  • 10 year tax deduction period for a Rp 5 trillion – <Rp 15 trillion new investment.
  • 15 year tax deduction period for a Rp 15 trillion – <Rp 30 trillion new investment.
  • 20 year tax deduction period for a Rp 30 trillion minimum new investment.

* After the tax holiday period expires, Taxpayers are given additional Corporate Income Tax deductions: 50% of the income tax payable over the next 2 years for a Rp 500 billion minimum investment and 25% of the income tax payable over the next 2 years for a minimum of Rp 100 billion – <Rp 500 billion investment.

What are the requirements for companies engaged in manufacturing to obtain certificate of origin for their products when they are produced in Batam? (We've seen cases such as 30% of the product value be manufactured in the host country, etc.)

40% of the product value must contain local content According to Minister Regulation No. 3 / M-Dag / PER / 8/2010, to obtain a Certificate of Origin (COO), the following documents must be submitted:

  • Articles of Association
  • Industrial License
  • Company registration number
  • Taxpayer Identification Number
  • Signature specimen
  • Cost Structure
  • Company Photos (10 pieces)
  • Company Domicile Letter
  • Owner or Director’s Identity Card (or passport)
  • Customs Identification Number
  • Import Identification Number
  • Business License from BP Batam
  • Raw material invoices and Import Declaration documents
Do you have an overview of the current cost of blue-collar labor, i.e. welder, electrical assembly worker, general labor, etc.?

The minimum wage for workers is based on the Riau Islands Governor’s decision to set a minimum wage. For the year 2020, as stated in Riau Islands Governor Decree No. 1047 Year 2019 dated November 21, 2019, the Minimum Wage is Rp. 4,130,279 / month (around USD 297).

What types of companies do Indonesia and Batam want to encourage investing in Batam?

Batam is currently focusing on 2 main industries, the manufacturing and service industries. Included in the manufacturing industries are Electronics and Electricity; industrial machinery, construction, shipbuilding, and oil & gas equipment; ICT; semiconductors and other electronic equipment; motor vehicles and parts. The service industries include tourism, health care, Maintenance Repair and Overhaul (MRO), offshore banking, Logistics, and Education.

Describe the government processes required to establish a company, set up a factory and receive authorization to manufacture products in Indonesia?

To promote the ease of doing business in Batam and the successful implementation of i23j (3 hour investment licensing service) policy, the Central Government, through Government Regulation No. 24 Year 2018 regarding Integrated Electronic Business Services and Presidential Regulation No. 91 Year 2017 regarding Business Implementation Acceleration, launched a new policy called Online Single Submission on 9 July, 2018, to further improve the licensing process. All applications can be submitted via

Applicants must submit the following documents:

  • Tax file number
  • Foreign worker recruitment permit
  • Social and healthcare security
  • Fiscal facility
  • Business License

The applicant must also meet an established notary who is authorized to issue a shareholder deed to then obtain the Identification Number from the ID Card / Passport; and within 1 hour, the OSS System will issue an NIB (Business Identification Number) which includes TDP (Company Registration Certificate), API ( Importer Identification Number), and Customs Access.

Explain how free trade regulations work in Batam. For example, do you have to be in a designated zone to benefit from the free trade zone or is the whole of Batam covered?

Batam free trade zone applies to the whole island, so it doesn’t matter in which area your company operates in, the incentives offered apply.

Do you have a reference company we can talk to that understands government and factory set up processes in Batam?

Batam Indonesia Free Zone Authority has a Directorate called “Directorate of Goods Traffic and Investment” to provide more details about the investment process. For information on factory set up and licensing process, we have the Mall of Public Service located in the Sumatera Promotion Center building.

The central government also has the Online Single Submission program that allows investors to submit factory set up applications through the website

We have heard that there were labor related issues in the past, can you explain what the main cause of these labor issues were and what actions have been taken to solve these problems?

The main issue concerning labor was the Annual Minimum Wage (UMK). To solve this problem, a Tripartite organization consisting of the Government (Labor Office), Businesspeople, and Workers, was set up so that issues can be resolved properly through discussion.

What are the main reasons we should invest in Batam?
  • No fees imposed on export – import
  • No Value Added Tax (VAT) imposed
  • Exemption on luxury goods sales tax
  • GSP (Generalized System of Preferences) Facility
  • Tax allowance
  • Tax holiday
  • Double tax avoidance agreements with 57 countries
  • Competitive investment with efficient operational cost
  • Super deductible tax
If you have any questions, please contact us at


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Emergency Numbers

Nomor telepon Pemadam Kebakaran

PBK Batu Ampar

PBK Duriangkang

PBK Sekupang

PBK Sagulung

PBK Sei Panas

Nomor Telepon RS BP Batam

Fire Department phone number

Batu Ampar Fire Prevention Center

Duriangkang Fire Prevention Center

Sekupang Fire Prevention Center

Sagulung Fire Prevention Center

Sei Panas Fire Prevention Center

BP Batam Hospital Phone Number