Indonesia Lays Out Customs Incentives for New Capital City Project
Indonesia has recently issued various fiscal and non-fiscal incentives to attract investments to Nusantara, the country’s new capital city. Nusantara is roughly four times the size of the current capital, Jakarta. and is expected to begin operations in 2024. The project presents opportunities for foreign investors in a variety of sectors from smart city development, and maritime infrastructure, to renewable energy. Among the incentives accorded to investors are corporate tax exemptions, tax holidays, personal income tax exemptions for investments in priority projects, hiring of foreign workers, and land rights, among many others. Moreover, under Indonesia’s Government Regulation No. 12/23, the government will also offer exemptions on duties for the import of goods used for the construction and development of Nusantara. In addition, import duty exemptions will be extended for goods and materials used in the construction and development of industries within the new capital city. Among the construction projects eligible for such incentives are electricity plants, toll roads, ports, airports, and clean water projects.