Fostering Jakarta’s Global Status :

Visioning The Metropolis as Southeast

Asia’s Premiere Investment Hub

Prepared By : Investment Division

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 Investment

Global Economic Prospects

The global economy is in the midst of its weakest half-decade performance

in 30 years

Global recession risks have receded, and it is still possible to achieve

the Sustainable Development Goals by 2030. We believe that
together, we can make a difference by enacting comprehensive policy
packages needed to:
• Boost trade and financial flows
• Become investor-friendly
• Consolidate government finances
• Strengthen fiscal and financial institutions

Global growth is projected to slow for the third year – from 2,6% last
year to 2,4% in 2024
Source : World Bank, 2024
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Outline
A Investment

B Investment Climate
1. B-Ready
2. Fiscal Incentives
3. Investment Masterplan
4. Strategic Investment Downstreaming’s Program
5. Investment Potential and Opportunity Map
6. ESG

C Investment Control

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 Investment
Understanding Local Government's Authorities on Investment Affairs
According to The Law no. 23 of 2014.

1. Investment Climate Development

2. Investment Promotion The Investment Division

3. Investment Services

4. Investment Control

5. Investment Data and Information

Regional Investment

Output Outcome

Investment Climate Improving the investment climate

Development  Increase aggregate demand (National Income)
 Increase capacity production
 Job creations
• Enhancing Investor Compliance in Reporting Investment  Per capita Income
Activity Report / LKPM  Technology transfer
Investment Control • Monitoring of investor who have obtained business permits  Knowledge transfer
• Facilitating Investment Debottlenecking

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 Investment

1. Investment Climate Development

Investment Determinants

Macroeconomic Conditions Government Corruption

(Global Economic Prospects) Political Stability and Security Ease of Doing Business
And Accountability (WGI) Human Capital (HDI)
(B-READY)

1. Voice and Accountability 1. Business Entry

2. Political Stability and Absence
of Violence/Terrorism
3. Government Effectiveness
1. Inflation
4. Regulatory Quality
2. Monetary Policy
5. Rule of Law
3. Credit Conditions
6. Control of Corruption
1. Survival (Under 5-mortality
rate)
2. School (Level of Education)
3. Health
2. Business Location
3. Utility Services
4. Labor
1. Crime 5. Financial Services
2. Corruption 6. International Trade
7. Taxation
8. Dispute Resolution
9. Market Competition
10.Business Insolvency

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 Investment Climate
1. B-Ready
(Ease of Doing Business)

B-READY Topics

Clo s in g a
Op e n in g a Bu s in e s s Op e ra tin g & Exp a n d in g a Bu s in e s s
Bu s in e s s
Bu s in e s s Bu s in e s s Utility Fin a n c ia l In te rn a tio n a l Dis p u te Ma rke t Bu s in e s s
La b o r Ta xa tio n
En try Lo c a tio n Se rvic e s Se rvic e s Tra d e Re s o lu tio n Co m p e titio n In s o lve n c y

B-Ready Indicators
In 2023, B-READY introduced as measurement for
new policy reform that support the development of
private sector as replacement of EODB report

Pilar I : Regulation
Topic Pilar II : Public Service Pilar III : Efficiency
Framework

Business Entry 37 24 4 World Bank will release the result of B-Ready

assessment in March – April 2024. Jakarta Government
Business Location 62 46 8 initiate to conduct the survey independently as overview
of ease of doing business condition in Jakarta

Link to access : https://thedocs.worldbank.org/en/doc/357a611e3406288528cb1e05b3c7dfda-0540012023/original/B-

READY-Methodology-Handbook.pdf 1
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Survey of Investor Perceptions regarding Ease of Doing
Business in DKI Jakarta
Objective
Understanding the current business climate and the investor
needs for ease of doing business.
Preparation
• The research preparation begins with FGD involving
the Ministry of Investment/BKPM RI, BPS DKI
Jakarta Province, and academics.
• The questionnaire is prepared in accordance with the
guidelines of B-Ready developed by the World Bank.
Investment Climate
Sample
The survey was conducted using sample of companies in the Jakarta
Special Capital Region, spread across 5 administrative cities and 1
regency. Total sample are 513 respondents.
Questionnaire
The B-Ready topics for arranging the questionnaire covers about
Business Entry and Business Location. Each topic consist of
three pillars: regulations, public services, and efficiencies.
Link : bit.ly/KuesionerKemudahanBerusahaDKIJakarta
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 Investment Climate

Survey of Investor Perceptions regarding Ease of Doing

Business in DKI Jakarta (Result)
Business Entry Business Location
73,20 72,44
72,82
Business Entry Business
7,43 7,26 Location

Pillar I : Regulatory
7,25
Pillar II : Public Service
7,20
Pillar III : Efficiency
Investor Perception Index of
EoDB
7,23
Based on the analysis, the investor perception index related to Ease of Doing
Business scored at 72.82 out of 100. This score represents that business entry and
7,21 business location aspects could be improved.

The highest scores in each indicator are in the regulatory pillar, indicating that the
quality of regulations related to starting a business and location permits in Jakarta is
in line with the expectations of investors.

The lowest scores in both indicators are found in the efficiency pillar, indicating that
improvements are still needed in related indicators such as the cost of the licensing
process.

Based on the text analysis of the open question answers, things that are considered
important for investors are the leadtime for the licenses issued, accessibility and
transparency of regulations and procedures.
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 Investment Climate
2. Fiscal Incentives Trend

New Investment incentives by main type and region, 2011 – 2021

Tax policy is used around the world as an instrument to promote international investment.
(Number of incentives)
Countries rely on a variety of fiscal incentives to attract investors to priority sectors or
regions. An analysis of tax-related investment policy measures adopted worldwide over
the last decade shows that profit-based incentives, such as tax holidays and reduced
corporate income tax (CIT), are among the most frequent and widespread.

Source : World Investment Report, 2022

Competitive Fiscal Incentives and efficient administration are one form of instrument that
can attract foreign investors to invest in Indonesia.

Source : Penyusunan Kajian Arah Kebijakan Pembangunan Ekonomi Jakarta dan

Mitigasi Dampak Pemindahan Ibu Kota Negara (IKN) oleh PWC, 2023

The policy of fiscal incentives is really needed by Indonesia Government in responding to

world challenges amidst the trend of providing fiscal incentives to increase investment.

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 Investment Climate
The Arrangement for Policies to Providing Incentives
and Ease of Investment

Background Government Regulation on Providing Incentives and

Facilitation of Investment
Incentives and Ease of Investment as
an effort to increase investment Regional Regulations on Incentives and
attractiveness in Jakarta Ease of Investment
Sector:
1. Tourism Fiscal Incentive:
2. Real Estate 1. Tax Exemption
3. Transportation 2. Tax Deduction
4. Construction 3. Tax Relaxation
Regulated in Government Regulation No.
24 of 2019 concerning to Providing
Incentives and Facilitation of Investment
in Regions
Criteria:
1. Contribution through community income;
2. Absorb 60% of Local workforce;
3. Using local resources;
4. Contribute to Public service;
The Impact of Incentive Policies 5. Contribute to GRDP;
6. Environmental friendly;
7. Infrastructure development that supports regional priorities;
8. Technology transfer;
9. Intelectual property Rights;
Investment 10.Research, development, and innovation;
Incentive Policy Investor Economy, employment, and income
Increased 11.Partnership with MSME’s.
Increased

Incentives reduces income ? Non Fiscal Incentive:

• None of decreased to the Original Local Government Revenue (PAD) because of a

new investor not as a tax target
• Incentives increase the Original Local Government Revenue (PAD), due to the
1. 2. 3. 4. 5. 6. 7.
creation of New Investment projects. Providing
Providing Data Providing of Simplify and Providing Easy Access to Promotion
and Information Infrastructure Accelerate the Technical Investment Skilled Facilitation
Licenses Assistance Securities Workforce

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 Investment Climate

3. Provincial Investment Masterplan

(RUPMP of 2025 - 2045)
Law Background Position

RPJP of RUPM of
Enhanced the National Investment RENSTRA K/L
2025 - 2045 2025 - 2045
Climate
The Law No. 25 of 2007
Concerning of the Investment,
Article 4 Number 1
Boost the investment RPJPD of RENSTRA SKPD
RUPMP of
2025 - 2045 2025 - 2045 PROV

Agenda Plan The Policy Guideline of Investment 2025 - 2045

a. The RUPMP of 2015 Evaluation (The Governor Regulaton No. 22 of
2015 concerning The Province General Investment Plan/RPUMP)
b. Background Study RUPMP of 2025 - 2045
a. Development Industrial Priority;
b. Export Oriented;
c. Green Investment;
d. Investment in Infrastructure to support connectivity and logistic;
e. Research and Innovation Oriented;
f. Syncronization and Harmonization of the investment between national –
regional level;
g. Increasing investment climate and business certainty;
h. Incentives and ease of doing business;
i. Investment Fasilitation in the overseas.

*RPJMN 2025-2045
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 Investment Climate

4. Strategic Investment Downstreaming’s Program

The Downstream Roadmap document includes seven aspects as the basic framework: Policy Aspects, Upstream Aspects, Industry
Aspects, World Supply Chain Aspects, Risk Analysis, Infrastructure and Regional Aspects, and Policy Recommendations. The roadmap
describes the current condition of all aspects and the projections of downstream Industry development over the next 20 years.

Capture Fisheries Seaweed Aquaculture

The largest potential is in Jakarta Utara and Kep.
Seribu.
Main capture fish include tuna, cakalang, tongkol, hiu,
layur, lemadang, lemuru, lencam, pari kekeh, selanget,
sotong, tenggiri, teri, bawal etc
Potential cultivation of Eucheuma Cottoni seaweed in
Kepulauan Seribu, such as on Panggang Island,
Tidung Island, Pari Island, and Lancang Island.
Kepulauan Seribu has the potential to produce
seaweed up to 150 tons per year.
Potential for fish cultivation throughout the DKI
Jakarta region, with a production of more than 3,869
tons in 2020 (DKPKP DKI Jakarta).
The main types of fish include nila, bandeng, bawal
Bintang, gurami, kakap merah, kakap putih, lele, mas,
mujair, kerapu lumpur, patin etc.

Downstream priority products: Priority downstream products: Priority downstream products:

Frozen fish, Processed fish, Fish powder, Fish oil, Gelatin, Refined Carrageenan, Biostimulants, Agar-Agar Collagen, Fish Oil, Fish powder, Fish Fillet
Collagen Powder

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 Investment Climate

5. Investment Potential and Opportunity Map

(SK BKPM No. 50 of 2023 Concerning to Guideline of Regional Investment Potential and Opportunity)

Investment Potential Map Investment Project Ready to Offer Investment Opportunity Map
(IPRO)

Assessing investment potential or formulating
Objective policy recommendations for specific sectors
Detailed study on incomplete aspects and packaging
of project information to be offered based on existing
planning documents (Study/Pre-feasibility Study/Pre-
FS/FS)
Identifying the feasibility level of the project based on
several fundamental analyses (legal, technical, market,
financial, socio-economic, and sustainability aspects).

Scope  Sector/Industry overview  Masterplan  Legal Analysis

 Location/Business Activity Indications  Detailed Location  Technical Analysis
 Market Condition Analysis  Project Mapping  Market Analysis
 Analysis of Issues and Challenges  Development Concept  Social-Economy Analysis
 Analysis of Policies/Regulations on  Infrastructure Support  Environment Analysis
Investment Development  Market Analysis and Demand Assesment  Financial Analysis
 Business Players Analysis (Market Player)  Financial Analysis  Suistainable Aspect
 Investment Opportunities Analysis (Market  Risk Mitigation
Opportunity)  Digitation of Project Location

 Primary  Primary
 Primary
Data  Secondary
 Secondary  Secondary
 Survey  Detailed Survey

 Mapping of Sectoral Investment  Detailed Study  Pre-FS Document

Output
Development Plans  Pre-FS/FS Resume  Infomemo & Infografis
 Investment Potential Indicative  Infomemo & Infografis  Project Location Video
 Policy Recommendations  WebGIS

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 Investment Climate

Output Example Input – Output Analysis

Business Entry

A macroeconomic analysis based on the interdependencies between

different economic sectors or industries.

Input-output analysis used to estimate the impacts of stimulus given

to the economy and analyze the ripple effects throughout the
economy.

Direct impact, Indirect impact, Induced income, Impact

Multiplier and Dynamic Economic Effect
Source: BKPM (2023)
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 Investment Climate

6. Accelerating green investment projects through the implementation of ESG based on Green
Taxonomy and Sustainable Investment Guidelines."

JAKGREENVEST

ESG
A set of considerations, including
environmental issues, social issues
and corporate governance that can be
considered in investing.

ESG and FDI

Green Investment has become a focus of the Special Capital Region of Jakarta, not only to
ESG criteria is rising in importance as a driver of foreign direct investment (FDI), with boost the economy but also to achieve a sustainable economy. Its the attempt by the Special
investors increasingly taking into account such criteria as part of their site selection Capital Region of Jakarta to attract environmentally friendly by creates dashboard for
decision. Business Entry delivering green investment in Jakarta a.k.a JakGreenvest to the investors.

Green Taxonomy Sustainable Investment

Definition Definition
Classification of economic activities that support in protecting and managing the environment Sustainable investment or investment with good ESG considerations, where investors
and climate change mitigation not only expect financial returns but also economic, social and environmental impacts

Legal Basis
Legal Basis
 POJK No. 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for
Financial Services Institutions, Issuers and Public Companies  The Law no. 25 of 2007 concerning Capital Investment
 POJK No. 60/POJK.04/2017 concerning Issuance and Requirements for Environmentally  Presidential Regulation no. 16 of 2017 concerning on Masterplan of
Friendly Securities (Green Bond) Investment (RUPM)

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 Investment Control

Supervision of Business LKPM Reporting Facilitation of Investment Barriers

01 Licenses 02 03
Compliance and Problems
Type
Objectives: Objective:
o Ensure compliance with Help to resolve problems and obstacles
requirements and obligations by Ensure that business actors report that become bottleneck in a business
Business Actors LKPM in accordance with applicable activities.
o Implementation of business regulations
activities in accordance with
applicable regulations

Investment Realization
160.0
Types: 142.9

o Routine Supervision 140.0

o Investment Realization Target in
123.9
Carried out on a scheduled basis 120.0 114.24 2023  Rp 128,4 T
103.3
o Incidental Supervision 100.0 o Investment Realization in Q3 2023
94.9
Based on complaints from the 80.0  Rp 50,9 T
public, etc
60.0 (DDI Rp. 34,2 T, FDI Rp. 16,7 T)
40.0 o Achievement of investment
20.0
realization until Q3 2023 (Jan-
Sep)  Rp 130,3 T (↑ 19,7 %
93.1 100.2 110 94 124.5
0.0
2018 2019 2020 2021 2022
compared with 2022)

Realization Target Realiazation *In Trillions Rupiah

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Thank You