Special Economic Zones

There are eight existing Special Economic Zone or SEZs (Kawasan Ekonomi Khusus or KEK) in Indonesia and until 2019, 11 new SEZs will be developed troughout the archipelago. Each of SEZs is developed for specific sectors. The existing SEZs are:

  1. Sei Mangkei in North Sumatra Province, for Crude Palm Oil (CPO) and rubber industry, fertilizer industry, logistics, and tourism.
  2. Tanjung Api-api in South Sumatra Province, for CPO, rubber, and petrochemical industry.
  3. Tanjung Lesung in Banten Province, for tourism.
  4. Maloy Batuta in East Kalimantan Province, for CPO, coal, and mineral industry.
  5. Bitung in North Sulawesi Province, for fishery and agro industry and logistics.
  6. Palu in Central Sulawesi Province, for smelters, agro industry, and logistics.
  7. Mandalika in West Nusa Tenggara Province, for tourism.
  8. Morotai in Maluku Province, for tourism, manufacturing industry, and logistics.

The government offers additional fiscal and nonfiscal facilities for industries in SEZ. About 20-100% tax discount for period up to 25 years is offered under certain criteria. The government also provide free value added tax for importation of raw materials. In addition, foreign investors in SEZs are eligible to own properties and receive residential permits.