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© 2015 by Indonesian Investment Coordinating Board. All rights reserved

Indonesian Business Updates on Ports, Shipbuilding, and Shipping Lines| Hamburg, 5th September 2016

Natalia Ratna Kentjana Director of Promotion Development

Indonesia Investment Coordinating Board (BKPM) Republic of Indonesia

How To Invest in Indonesia’s Maritime Sectors: an Introduction and Recent Development

Indonesia: Future Global Maritime Axis

Part 1

“Sea Toll” Development: Emerge Indonesia into a Global Maritime Axis

Government’s Vision on Infrastructure Development

"One of our most important goals is the

realization of the sea express

transportation project. The sea express

transportation system is among the

maritime infrastructure facilities that

will be supported by productive

shipbuilding industries in Indonesia“. –

President Jokowi, 2015 Sea Toll

Reliable Seaports

Effective inland access

Adequate West-East cargo flow

Developed shipping industry

Scheduled & routine shipping

The Investment Coordinating Board of the Republic of Indonesia

4

Tol Laut

“Sea Toll” Development Plan Indonesia’s Logistic Route

Industry: Shipbuilding

Service: Shipping

Infrastructure: Seaports

Logistics: Cold Storage, Storage Tank

ICT & Human Capital: ICT for Maritime, Capacity Building

aspects

of Maritime Industry

5 Hub Ports 19 Feeder Ports

Source: Bappenas, 2015

National Development Plan 2015-2019

How to Invest in Indonesia’s Maritime Sectors?

Part 2

Picture: http://agromaritim.net/


6

One-Stop Service (OSS) Centre Creating faster, simpler, more transparent & integrated services

Improvement of Investment Licensing Service

One-Stop Service (OSS) at BKPM

22

ministries & institutions integrated

3-hour Investment Licencing Service

More than

9,600 Permits issued

The Investment Coordinating Board of the Republic of Indonesia 7

“Invest in Indonesia” Apps : Complete Information is now in Investors’ hand

The mobile apps is available for Android and iOs.

Find Information about Investment Procedure in

Indonesia

Find updates on Indonesia’s investment

climate

Find out more about investment opportunity in

Indonesia

Track your investment license application by

mobile phone

Find all basic information needed to invest in

Indonesia



8

BKPM

• Arrive at BKPM directly from the airport.

• Consult with Director of Investment Service.

• Submit the required documents & data.

3-hour Investment Licensing Service

Requirements: Minimum investment of IDR 100 billion (USD 8 million) and/or employing 1,000 local workers

Wait at the investment lounge while documents are being processed by BKPM, in-house notary, liaison officer ministries & other government institutions.

Obtain eight licenses & a letter of land availability within three hours to start your business.

• Public works • Transportation • Energy and Mineral Resources • Communication and Information

Excluding for infrastructure projects, such as :

Investment Priority Service

The Investment Coordinating Board of the Republic of Indonesia 9

Certainty to start a business • Investment license • Certificate of incorporation • NPWP / Tax registration • TDP / Company registration

3 hours, 3 certainties

Certainty for Expatriate

to work • RPTKA / Employment plan • IMTA / Working permit

for your investment

Certainty to import

capital goods • API-P / Import identification • NIK / Customs registration

Land Availability information

+ Letter of land-booking from Agrarian Ministry to verify the status of a chosen land before acquisition.

Investment Priority Service


10

Simplification of Maritime Related Licenses in BKPM’s One-Stop Service (OSS) Centre 4 licenses services have been simplified by the OSS Centre

Location Determination Permit on Special Terminal

From 21 working days

To 19 working days

Development and Operational Permit on Special Terminal


To 19 working days

Development and Operational Permit on Special Terminal for Public Purposes Use


To 5 working days

Determination on Special Terminal


To 14 working days



11

TAX ALLOWANCE

(Govn’t Regulation No.18/2015)

30% of investment value

Reduction of corporate net income tax for 6 years (5% each year).

Under certain requirements among others: investment value or export orientation, manpower absorption, local content, and project location (especially outside Java island).

Investment Incentives and Facilities

Business Field KBLI Code* Additional Requirements

Boat and equipment industry for marine tourism, fishing, and sport

3011; 3012 -

Cargo services (including transhipment international ports)

52240 Integrated with warehouses or water transport support service (KBLI code 52101, 52102, 52109, 52221)

Boat, ship, and floating structure repair service

33151

Location: West Kalimantan, Central Kalimantan, South Kalimantan, East Kalimantan, North Kalimantan, North Sulawesi, West Sulawesi, Central Sulawesi, Southeast Sulawesi, South Sulawesi, Gorontalo, Maluku, Papua, West Papua, West Nusa Tenggara and East Nusa Tenggara.

*KBLI Code: Indonesia Industrial Classification Code

List of Maritime Related Sectors Eligible for Tax Allowance


12

TAX HOLIDAY

(MoF Regulation No.159/PMK.010/2015)

5-15 years Tax relief facility, starting from the commencement of commercial production. Can be extended for Max. 20 years under certain consideration.

Pioneering Industries 1. Upstream metal; 2. Oil refinery; 3. Basic organic-chemical from oil and gas; 4. Machinery industry that manufacture industrial machine; 5. Processing industry based on commodity from agriculture,

forestry and fishery; 6. Telecommunication, information and communication;

7. Sea transport; 8. Processing industry as main industry located in Special

Economic Zone (SEZ); and or

9. Infrastructure (economical, non-PPP)

Max . 1 00 %

10-100% Reduction of corporate income tax for Pioneer Industry. Max. 50% for industry that implement high technology with investment plan IDR 500 M – less than 1 Trillion.

IDR 1 trillion Minimum investment plan (USD 80 million). Or Minimum IDR 500 Billion if introduce new technology

IMPORT DUTY FACILITY

Import duty on Machineries and Equipments, goods, and raw materials for production • Exemption of import duty on

machineries and equipments • 2 years exemption of import duty on raw

materials • Additional 2 years import duty

exemption for raw materials if the company using locally-produced machineries and equipments (min 30%)

Which produces goods and/or services, including:

1. Tourism and culture 2. Public transportation 3. Public health services 4. Mining 5. Construction 6. Telecommunication

7. Port 8. Automotive Assembling Industry

Industries

(MoF Regulation No.176/PMK.011/2009 jo. MoF Regulation No. 76/PMK.011/2012)

Investment Incentives and Facilities


13

Economic Policy Package on Maritime Sectors The Government has established 13 economic policy package since August 2015 to create more

conducive investment climate

Government Policy

Economic Policy Package IX Economic Policy Package XI

• Implementing Single Billing system for port services payment

• Integrating Indonesia National Single Window (INSW) portal and Port Information System or Inaportnet (yard planning system, customs, delivery order, trucking company, and billing system)

• Utilizing Indonesia National Single Window (INSW) to process all types of licensing applications

• Implementing single risk management to reduce dwelling time to 3.5 days this year and to less than 3 days in 2017

An Invitation to German Investors to Invest in Indonesia…

Part 3

Picture: http://www.kompasiana.com/


15

Rank Country 2010 2011 2012 2013 2014 2015 S1-2016 Total

1 Singapore 4,698 400 36,480 2,152 18,358 20,807 13,123 96,017

2 UK 21,381 4,031 25,412

3 China 3,496 7,304 10,800

4 Mauritius 6,699 6,699

5 Malaysia 1,002 1,200 2,000 21 655 4,878

6 South Korea 4,271 4,271

7 Germany 588 2,310 33 2,931

Total 9,945 31,453 85,860 40,094 20,005 25,399 20,467 233,222

FDI Realization in Indonesia Shipbuilding Industry

Source: BKPM, Aug 2016.

Investment Performance

Largest Investors by Country

Investment Value in USD thousands

Top-5 Investment Destination for Shipbuilding Industry, By Provinces Based on Investment Value (%)

Riau Islands 80%

West Java 16%

Bali 1%

West Nusa Tenggara

1% East Kalimantan

1%

Others 1%

Indonesia Industrial Classification Code

(KBLI) 3011; 3012


16 Source: BKPM, Aug 2016.

Investment Performance

Top-5 Investment Destination in Indonesia, by Provinces Based on investment value (%)

DKI Jakarta 49%

East Java 16%

East Kalimantan

10%

West Java 7%

Riau Islands 6%

Others 12%

Rank Country 2010 2011 2012 2013 2014 2015 S1-2016 Total

1 Singapore 41,240 63,022 374,888 112,519 1,019,466 527,253 170,075 2,308,462

2 Japan 81 4,001 13,264 17,315 33,518 43,869 49,664 161,711

3 South Korea 1,150 29,000 3,700 4,500 31,530 64,553 134,433

4 Malaysia 43,036 36,797 41,085 70 4,641 626 126,254

5 China 6,072 2,552 31,835 15,816 56,275

Total 153,630 151,701 454,611 157,869 1,231,004 742,779 316,380 3,207,973

Largest Investors by Countries

Investment Value in USD thousands

No investment from Germany was recorded in

this sectors

FDI Realization in Water Transport and Supporting Services

Indonesia Industrial Classification Code

(KBLI) 5011; 5012; 5013; 5014; 5021; 5022; 5210; 5222; 5224.


17

Badan Koordinasi Penanaman Modal (BKPM) Indonesia Investment Coordinating Board Jln. Jend. Gatot Subroto No. 44 Jakarta 12190 - Indonesia

t . +62 21 525 2008

f . +62 21 525 4945

e . [email protected]

www.bkpm.go.id

Danke

Terima Kasih

Director of Promotion Development Natalia Ratna Kentjana ([email protected])

Chief of Marketing Officer for Europe Lely Sartika ([email protected])

Deputy Director for Foreign Promotion Facilitation JS Meyer Siburian ([email protected])

1.

2.

3.


18

Source: Ministry of Transportation, 2015

18

Seaport and Terminal in Total: 2459

1130 Non Commercial Ports

Managed by Government

111 Commercial Ports Operated by: - Pelindo 1, 2, 3, 4 - BP SABANG - BP BATAM

1218 Special Terminals/Dedicated Private Terminals (April 2015) For Mining, Oil&Gas, Steam Power Plant, Forestry, Cpo, Fishery, Industry, Tourism, & Shipyard

Seaport Infrastructure in Indonesia

Attachment: Current Condition


19

Indonesia’s “Sea Toll”: Locally Integrated, Globally Connected

Shipping Infrastructure • Administer 6 well-organized cargo routes regularly • Optimize 96 pioneer sea transport routes • Develop up to 200 ships by 2019 • Develop and operate livestock carrier

Government’s Plan on Maritime Infrastructure Development in 2015-2019

Source: Ministry of Communication and Information RI, from Bappenas RI, May 2016. Picture: teknik-perkapalan.blogspot.co.id

Port Infrastructure • Expand 24 main seaports for Sea Toll • Complete 91 non-commercial seaports • Procure 11 loading and unloading equipment in seaports

Supporting Infrastructure • Develop 322 navigational aids • Improve the quality of 44 maritime telecommunication stations • Develop 20 navigating ships • Develop 50 sea and coast guard patrol vessels


20

Government’s Plan on Maritime Infrastructure Development in 2015-2019

“Sea Toll” has been inaugurated It serves 6 routes (5 routes to Eastern & 1 route to Western Indonesia)

Route 1

Route 2 Route 3 Route 4 Route 5 Route 6

Source: Ministry of Communication and Information RI, from Bappenas RI,

May 2016.


21 Source: Ministry of Industry, 2015.

Shipbuilding Industry Target

2012

2015

2020

2025

• The ability to produce vessel in various types

(passenger vessel, general cargo, tanker vessel) up to 300.000 DWT

• The ability to repair vessel up to 300.000 DWT

• Increase the ability to design and engineering vessel












• NaSDEC/PDKRN empowerment

Road Map Priority Industry Cluster Development 2010-2014


22

Business Field KBLI Code* Requirements

Wooden boat and wooden boat equipment industry for marine tourism, fishing, and sport

3011; 3012 Partnership with SME

Foreign and domestic sea transports 5011; 5012; 5013; 5014

49% max. of foreign share ownership

Foreign transport for passengers and goods (excluding cabotage – Central Product Classification/CPC 7211)

50121; 50122; 50123; 50141; 50142; 50143

• 49% max. of foreign share ownership

• 70% max. of ASEAN investors share ownership

Crossing transport inter provinces/cities; river and lake transport for regular and non-regular route, tourism, animal carrier, special/general/hazardous goods.

50214; 50215; 50216; 50217; 50218; 50211; 50212; 50213; 50221; 50222;

50223

49% max. of foreign share ownership

Foreign Capital Ownership (1/2) Negative Investment List according to Presidential Regulation No. 44/2016

Investment Regulation



23

Business Field KBLI Code* Requirements

Provision of harbor facilities (jetties, buildings, tugs at cargo container terminals, at liquid-bulk terminals, at dry-bulk terminals, and at Roll on-Roll off (Ro-Ro) terminals

52221 52222 52223


• Special permit from the Ministry of Transportation regarding minimum capital requirements

Provision of harbor facilities, i.e., waste reception facilities

52109 49% max. of foreign share ownership

Maritime cargo handling services with Central Product Classification/CPC 7412

52240


• 70% max. of ASEAN investors share ownership

• Only applicable in 4 ports in Eastern Indonesia (Bitung, Ambon, Kupang, and Sorong)

Foreign Capital Ownership (2/2) Negative Investment List according to Presidential Regulation No. 44/2016

Investment Regulation


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