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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 extremely strategic location which is only 20 km away from Singapore and relatively safe from natural disaster occurences due to its location outside the area of ring of fire. It makes little possibility of Batam experiencing earthquake and tsunami.

A few countries from this region, such as Philippine, Malaysia, and etc. offer income tax incentives towards companies which move manufacturing into their countries. Are similar benefits available for manufacturing investments to Batam?

Indonesia government has offered a tax incentive program called “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 national economy
  • A minimal investment value of Rp 100 billion
  • 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 –
  • 5 year tax deduction period for a Rp 500 billion –
  • 7 year tax deduction period for a Rp 1 trillion –
  • 10 year tax deduction period for a Rp 5 trillion –
  • 15 year tax deduction period for a Rp 15 trillion –
  • 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 in the next 2 years for a Rp 500 billion minimum investment and 25% of the income tax payable in the next 2 years for a minimum of Rp 100 billion – <Rp500 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 be 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 of workers is based on Riau Islands Governor’s decision to set a minimum wage. As for 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 became the focus of Indonesia and Batam to be brought into Batam?

Batam currently focuses on 2 main industries, the manufacturing and service industries. Included in manufacturing industries are Electronics and Electricity; industrial machinery, construction, shipbuilding, and oil & gas equipment; ICT; semiconductors and other electronic equipments; motor vehicles and parts. 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 all kinds of 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 concerning Integrated Electronic Business Services and Presidential Regulation No. 91 Year 2017 concerning Business Implementation Acceleration, has launched a new policy called Online Single Submission on 9 July, 2018, to further improve the licensing process. All applications can be submitted via www.oss.go.id.

  • Applicants must submit the following documents:
  • Tax file number
  • Foreign worker recruitment permit
  • Social and healthcare security
  • Fiscal facility
  • Business License

Afterwards, the applicant must meet a notary who is authorized to issue deeds to then take down the Identification Number from the ID Card / Passport of the established shareholder 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 free trade zone or is the whole of Batam covered?

Since Batam free trade zone applies to the whole island, so it doesn’t matter in which part of it you manage your company, 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 find out more details about the investment process in government. For information on factory set up and licensing process, we also have a Mall of Public service which is located in Sumatera Promotion Center building.

The central government also has the Online Single Submission program that allows investors to submit factory establishment application through the website www.oss.go.id.

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

The main labor issue was related to the Annual Minimum Wage (UMK), but to solve this problem, there was already an organization called Tripartite consisting of the Government (Labor Office), Businesspeople, and Workers so every issue can be resolved properly through negotiation.

Can you point out the reasons why 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) Facilities
  • Tax allowance
  • Tax holiday
  • Double tax avoidance agreements with 57 countries
  • Competitive investment with efficient operational cost
  • Super deductible tax
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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