Indonesia's industrial estate is recognized by the international market. Indonesian Industrial Estate is considered to have several advantages compared to other countries. Finding the most suitable location for your manufacturing company in Indonesia is very important for the success of your business.
There are several advantages or benefits if you build a manufacturing company in Indonesia. According to the Indonesian Industrial Estate Association (HKI) there are 73 industrial areas in 20 regions throughout Indonesia.
Many manufacturing company licenses are very dependent on the factory location. Therefore, it is very important to choose the location that is most suitable for your manufacturing company.
Before you decide to open your manufacturing company in Indonesia there are several important things that you must considered such as the demand for your product, the distance to natural resources and labor, the port, and the main transportation routes. Here are some advantages or advantages of building a factory in Indonesian Industrial estate such as:
Direct Construction Investment Service or“Kemudahan Langsung Investasi Konstruksi (KLIK)” for certain Industrial Estate
The advantages of building a factory in an Indonesian industrial estate is that you can directly start your project construction before obtaining construction permits or Direct Construction Investment Service (KLIK). This privilege is granted by Indonesia government for certain Industrial Estate. Currently, Karawang New Industry City already have that privilege. Direct Investment Services Program (KLIK) allows the construction process starts after the acquisition of a principal license while waiting other additional licenses. However, the industrial license along with other licenses must be completed as soon as 80% of your main production machine has been installed and before operations begin.
Indonesia Government also urge manufacturing company to open their factories inside Industrial Estate according to Regulation (“Undang undang”) number 3 year 2014. According to zoning regulations for property development, areas such as green zones or settlements prohibit industrial activities. So, it's a good idea to build a factory inside an industrial estate.
The next advantages of building a factory inside the Indonesian industrial estate like Karawang New Industry City is the availability of a complete infrastructure. Industrial estates have provided easy and cost-effective access to electricity, water and roads because the infrastructure has been established to support industrial activities. As a result, you can focus more on your core activities.
It is also easier to access ports and major transportation routes for goods distribution and logistics which if not take more time and produce a greater trace of waste. In addition, most industrial estates also provide support for industrial waste disposal where tenants do not need to worry about complicated processes and regulations regarding it.
Tax Incentives in Industrial Estates
One of the advantages of building a factory in the Indonesian industrial estate is the tax incentives. In some regions, local governments also create incentive programs that can benefit companies. For example, VAT tax allowances for imported products or machines entering industrial estates, and customs tax allowances for goods originating from selected ports such as ports in free trade zones.
Those are some of the advantages building a factory in the Indonesian Industrial Estate. Make sure you consider these things, if you want to build a manufacturing company or factory in Indonesia.