The Special Economic Zone (SEZ) development in Indonesia resulted in an investment commitment of IDR70.4 trillion. Data by the end of 2020, there was also investment realization of IDR23.1 trillion. Several companies in SEZs (or KEK – Kawasan Ekonomi Khusus), had produced export commodities for more than 30 countries, contributed to foreign exchange valued at IDR5.2 trillion in 2020 only.
Indonesia’s SEZ is designed to maximize industrial activities with high economic value. According to official website of SEZ, there are 18 SEZs in Indonesia, consist of 10 industrial SEZs and eight tourism SEZs by June 15, 2021.
As part of Making Indonesia 4.0 program, several SEZs hold priority sectors. The Kendal SEZ, Central Java, for example. It excels in the export-oriented industry, import-substitution, high-tech products (HTP), and special applications that support industry 4.0 and industry 4.0-based logistics.
Investors in SEZs can enjoy incentives offered by the government. Investment of IDR1 trillion or more in an SEZ can expect a corporate income tax holiday ranging from 10 to 25 years. Moreover, there are non-fiscal incentives available from regional authorities, such as a more straightforward land acquisition process.