TRADE, INVESTMENT & TOURISM OPPORTUNITIES WITH INDONESIA

1. TRADE, INVESTMENT & TOURISM OPPORTUNITIES WITH INDONESIA Embassy of the Republic of Indonesia Praha, Czech Republic www.kemlu.go.id/prague Tel: +420257 214388

2. Economic Growth... • In 2010: 6.1% • in 2011: 6.5%

3. Economic Outlook • Total GDP: US$ 928 Billion(in 2011) • Per-Capita: US$ 3,495(in 2011) • GDP Composition by Sector: • Industry (46.4%) • Services (37.1%) • Agriculture (16.5%) • Unemployment 6.6 % (in 2011) • Inflation 4.5 % (present) • Interest rate 5.75% (present) • Debt-to-GDP ratio 24.5% (in 2011) • Balance of Payment surplus of US$ 11.9 Billion (in 2011) • International Reserves reached US$ 108,990 thousand, equivalent to minimum 7.1 months of import and the repayment of short-term government debts due. • Foreign Direct Investment (FDI) inflows of US$ 19,28 Billion (in 2011) • Rating by S&P BB+

4. Fourth most populous in the world, 245 mio. • Size of Middle Class Economy = Market • Population share of the middle class increased from about 25% in 1999 to 43% in 2009. In absolute size, the Indonesian middle class roughly doubled over the ten years, from 45 million to 93 million.” (ADB Report 2010 ”The Rise of Asia’s Middle Class”; • 56.5% share of middle class to total population (2010), shows an increasing number of wealthy middle class; • 60% productive age, average 40 years.

5. Fiscal Policy In 2011...

6. Rich Natural Resourcesmost of them are still intact to be processed into higher VA products About 40% is assumed feasible. Up to now, 1.200 MW has been developed. • Abundant resources for gas-based energy and petrochemical industries • Not including Non- Conventional Gases, from Coal Bed Methane and Coal Gassification Will be at least partially processed domestically by 2013 (new mining law: 4/2009)

7. Indonesia – World Trade Balance Value : US$ 000 1. Export (to 218 Countries) 2. Import (from 222 Countries) Source : Trade Map

8. Indonesia – Czech Trade Balance

9. Indonesia – Czech, Export & Import 2011Top Commoditties Traded

10. 4. List of Products Exported by Indonesia to Worldwide (30 of 1119 products)

11. 5. List of products imported by Indonesia from worldwide (30 of 97 HS : 2 digit) V : US$ 1000 Source : Trade Map

12. invest in INDONESIA AS A GREAT PLACE TO INVEST Invest in remarkable indonesia Invest in indonesia Invest in remarkable indonesia Invest in remarkable indonesia Invest in Invest in remarkable indonesia Invest in indonesia Invest in remarkable indonesia Invest in remarkable indonesia Invest in indonesia remarkable indonesia able indonesia Invest Invest in remarkable indonesia Invest in

13. Top 10 FDI to Indonesia by Countries – 2011 (in US$. million) Czech Republic investment realization was nil in 2011 Source: BKPM

14. Czech Republic Investment Realisation in Indonesia Source: BKPM

15. Czech Republic Investment Realisation in Indonesia by Sector Source: BKPM, 2012

16. Why In Indonesia? • Proven resilient economy: Macroeconomic condition remains strong with robust growth: • Market-based macro-economic policy. • Free foreign currency exchange regime. • Stable political transition towards democracy, respecting human rights and upholding supremacy of law. • Improved business climate: improving international perception and positive economic forecast. • Strategic geographic location and strong global presence. • Abundance of diversified natural resources. • Increasingly skilled labor. • Closer EU – Asian relations in the future.

17. Import Duty VAT Exemption Incentives • VAT Exemption on import and/or delivery of certain taxable goods that are strategic, including capital goods, animal feed and/or raw materials; seeds/seedlings of agricultural goods, plantation, forestry, animal husbandry, animal husbandry, fishery.

18. Tax Allowance Incentives • Tax Allowance for an investment up to Rp 1 Trillion (approx. US$ 111.1 million) in certain business activities and/or certain locations: • A reduction of up to 30% of total investment value on annual net taxable income, spread over 6 year period. • Depreciation and amortization accelerated to fixed intangible assets (building and non-building) • Income Tax on dividends paid to foreign tax subject to a 10% or a lower rate according to double taxation avoidance agreement • Compensation for losses of more than 5 years but not more than 10 years. • Examples of high priority business activities and investment locationsin the national scale include: • 1) Cocoa industry, food and confectionary industry containing cocoa • 2) Development of the eastern part of Indonesia: • Salt industry in the East of Nusa Tenggara • Manufacturing industry of brass ingot, aluminium ingot, copper ingot, and other basic non-iron metals in Kalimantan, Papua, Maluku, and Sulawesi Provinces.

19. Tax Holiday Incentives • Tax Holiday for an investment up to Rp 1 Trillion (approx. US$ 111.1 million) in certain business activities: • 5 Priority Sectors: Basic metals, Oil Refinery and/or Organic Basic Chemical which use oil & gas, machinery industry, industrial in the field of renewable resources, and communications equipment industry. • The facility : • Tax exemption over 5-10 years period effective from the commercial production of the investment project (100% investment realisation). • On top of the above exemption, a 50% reduction of Corporate Income Tax for 2 years period which brings it down to 12.5%.

20. Doing Business • FDI in Indonesia has to set up an Indonesian legal entity. • FDI has to be initially registered with the Indonesia Investment Coordinating Board (BKPM) and subsequent permits by the central and regional governments where the investments take place. • Indonesia strives to improve the investment climate by simplifying the regulatory system for business Time in starting new investment has been reduced from 105 days to 30 days since 2007. • Use of services from local lawyers or consultants to set up your business is recommended. Source: BKPM, 2012

21. TAXATION • Primary types of Taxation: • Corporation Income Tax: 26,6% • Individual Income Tax: 10,6% • Value Added Tax (VAT): 10% • Sales Tax on Luxury Goods: 10% – 75% • Tax on Land and Buildings: 0,5% • Stamp Duties: IDR. 6000,00 (eqv 50 cents Euro) • Transfer Tax • Excise Duties Source: Tax Board, Ministry of Finance

22. Nine Core Areas for Investment • First: Infrastructure Building (seaports, toll-roads, railways, power plants, drinking water) • Second: Transportation • Third: IT and Telecommunications • Fourth: Food Industry and its R&D • Fifth: Energy Industry, including renewable industry • Sixth: Mining Industry • Seventh: Manufacturing Industry • Eighth: Creative Industry • Ninth: Training and Education, Research, Development and Innovation.

23. TOURISM INVESTMENT OPPORTUNITY

24. Toba Lake (North Sumatra) POPULAR DESTINATIONS Toraja, Makassar (South Sulawesi) Batam & Bintan Bunaken (North Sulawesi) Jakarta EMERGING DESTINATIONS Yogyakarta & Borobudur Lombok & Gili Islands (West Nusa Tenggara) Bali Bromo (East Java)

25. ADVENTURE Bohorok National Park (OrangUtan) Bandaneira Way Kambas (Elephant) Culture Jayawijaya Ujung Kulon N.P. (Rhinoceros) Tanjung Putting NP (OrangUtan) Spa Golf Mentawai (Surfing) Diving Rinjani Merapi & Merbabu (Hiking) Komodo Island MICE Bali Barat National Park (Bird Watching)

26. West Sumatera Adventure Toraja Banten CULTURE Papua Yogyakarta & Borobudur Spa Golf Diving Tengger in Bromo Sumba MICE Bali

27. Bintan, Riau Islands Adventure Jakarta East Java Culture Lombok SPA Golf West Java Diving Central Java MICE Yogyakarta Bali

28. Adventure • Batam & Bintan Culture • Medan Papua Spa GOLF Diving Jakara Bali MICE Bandung • Surabaya

29. Bunaken Adventure Morotai PulauWeh, Aceh Culture Wakatobi Raja Ampat Spa Golf Nias DIVING Flores Komodo Island Karimunjawa MICE Bali

30. MEDAN BALIKPAPAN PADANG LOMBOK INDONESIAN MICEDESTINATIONS MANADO BATAM PALEMBANG JAKARTA MAKASSAR SURABAYA BANDUNG YOGYAKARTA BALI SOLO

31. 9.

32. DEKUJI / THANK YOU / TERIMA KASIH • Usefull links: ww.bkpm.go.id, www.kemendag.go.id