What incentives are drawing Malaysian firms to invest in Nusantara?

Question

Accepted Answer

Tax Incentives and Land Use Permits are Key Attractions for Malaysian Investment in Nusantara

Malaysian firms are showing significant interest in investing in Indonesia's new capital, Nusantara, primarily driven by substantial tax incentives and long-term land use permits. Indonesia has received approximately 100 letters of intent for investments in Nusantara, with half originating from foreign entities, notably led by Malaysia. The United States and China also exhibit comparable levels of interest, indicating a broad international draw to the project.
Corporate Income Tax Exemptions and Holidays

Companies that register as taxpayers in Indonesia and commit to investments in designated priority areas within Nusantara are eligible for a complete 100 per cent exemption from corporate income tax. This exemption is a foundational incentive designed to encourage initial capital outlay. Furthermore, those investing in the top two priority sectors—infrastructure and public services—can secure a tax holiday, which provides a period of up to 30 years without corporate income tax liability, provided their investments commence between the present and 2030.
Extended Land Use Rights

Beyond tax benefits, investors in Nusantara are also being offered extended land use permits. A new regulation approved by Indonesian President Joko Widodo grants businesses investing in the new capital the right to land use for up to 95 years. This long-term assurance is a critical factor for businesses planning large-scale, long-term development projects, offering a stable foundation for their operations and investments in the nascent capital.
Priority Investment Sectors and Projects

The incentives are specifically targeted towards investments in a range of critical sectors deemed essential for Nusantara's development. Eligible projects encompass renewable energy initiatives, the development of toll roads, ports and airports, public transportation systems, industrial parks, as well as investments in healthcare and education facilities. At least 10 major Malaysian companies, including prominent names like Tenaga Nasional Berhad and Telekom Malaysia Berhad, are reportedly exploring substantial investments in these development areas.

Reading history

Hide →

This history is cleared when the page is closed.

What incentives are drawing Malaysian firms to invest in Nusantara?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends