AmCham Update
AmCham Update Vol. 4 #9
New Golden Visa, $2.6b Investment Secured at Davos, First Kraken Covid Case, Gov’t to Retain Commodity Export Earnings
Jan 27, 2023

Golden Visa for Talented Foreigners

The government is to release a Golden Visa scheme, said Minister of Law and Human Rights Yasonna Laoly, at the request of President Joko Widodo. The Minister said the scheme aims to attract more investment and has undergone rigorous research and comparisons with similar schemes in other countries.

Minister of Tourism and Creative Economy Sandiaga Uno has also said the Golden Visa is intended for "special talents" who contribute to the Indonesian economy, and would prioritize foreigners with talents in the digital, health, and investment sectors. The Golden Visa is part of the larger Second Home Visa program. While the Second Home Visa is a general program for foreigners who want to make Indonesia their second home for 5-10 years, the Golden Visa is intended for special talents and offers more generous benefits, Sandiaga said.

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Indonesia Attracted $2.6b From Investors at Davos

Indonesia attracted $2.6 billion worth of foreign investment during the World Economic Forum (WEF) held in Davos, Switzerland, on Jan 16-20, Minister of Investment Bahlil Lahadalia said.

In a discussion panel, Bahlil asked foreign investors to take part in developing Indonesia’s downstream ecosystem through technology transfer and capital support in return for eased business permits. In response to the controversial bauxite export ban, he said Indonesia will continue to ban exports of raw materials to develop domestic industry and that the practice has been implemented by other developed economies in the past. 

Bahlil had previously met with Germany-based chemical maker BASF and French miner Eramet to finalize a partnership deal to invest in a nickel processing facility in Indonesia. The partnership is part of the government’s plan to create value added for the country’s rich nickel resources.

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Gov’t to Retain Export Earnings for Larger Commodities

The government is to require exporters in several manufacturing sectors to park their export proceeds (DHE) domestically for three months, according to Coordinating Minister for Economic Affairs Airlangga Hartarto.

There have been discussions over the past few weeks to revise provisions on export proceeds in Government Regulation 1/2022 for the sake of increasing domestic foreign exchange reserves. Other potential revisions to the regulation include having exporters convert dollars to rupiah and expand the required business sectors to repatriate export proceeds, including downstream and manufacturing.

The existing regulations only require DHE retention for natural resources related sectors such as mining, plantations, fisheries and forestry. Exporters in these sectors are obliged to put DHE in domestic banks through a special DHE account at a bank conducting business activities in foreign currency.

However, the government also plans to provide incentives to ensure exporters comply with these provisions. It is still up in the air whether the incentives will be in the form of interest incentives or interest income, but there have also been discussions on providing tax incentives for exporters who keep their money in the country. A Bank Indonesia regulation will be released to regulate the provision of these incentives.

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Covid-19 Not Finished (Yet) as Kraken Variant Found Here

The first Indonesian case of the Covid-19 XBB 1.5 variant or “Kraken” has been found in Balikpapan, East Kalimantan. This variant is said to be quite contagious, but recovered cases in Poland said isolation only took eight days.

Minister of Health Budi Gunadi Sadikin said he was not worried about a spike in Kraken cases since the immunity of Indonesians is good. He urged the public to maintain health protocols and get the second booster dose as soon as possible.

So far, vaccines can still be accessed free of charge, but the government is planning to start charging around Rp 150,000, although a start date has not been confirmed. Previous vaccines, such as AstraZeneca, Pfizer, Sinovac, Sinopharm, can still be accessed, but Biofarma's production of IndoVac has been postponed pending confirmation of the quota requested by the government.

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Power Wheeling Scheme Concern in Renewable Energy Bill

The "power wheeling" scheme in the Renewable Energy (EBT) bill has drawn criticism amid claims it would make electricity more expensive. The scheme would allow private parties or independent power producers (IPP) to use existing PLN power grids to distribute and sell electricity to consumers.

Although the scheme would come at a price for IPPs, it remains blurry and would potentially lead to problems for PLN, said Marwan Batubara of Indonesia Resources Studies (IRESS), a public policy think tank focused on natural resources. The power wheeling scheme has also been highlighted by the Ministry of Finance for its potential to incur losses to the state.

The losses are due to the fact that electricity is currently at oversupply in several parts of Indonesia, including Java and Sumatra. The inclusion of IPPs on the electricity grid would worsen the oversupply, diminish demand of electricity from PLN, and cause a higher base price of electricity, said Marwan.

Other observers also pointed out that electricity is a strategic good mandated by the constitution to be controlled by the state, not delegated to private providers. Power wheeling is one of the main points of contention in the EBT bill, which is being discussed by a working committee consisting of Commission VII of the House of Representatives (DPR) and the Ministry of Energy and Mineral Resources. The Ministry submitted an inventory list of problems (DIM) to the DPR on Jan 24, in hopes the bill will be finished and approved this year.

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AAP Business Summit 2023 – Trade Winds ASEAN

AmChams of the Asia Pacific (AAP) is pleased to invite member companies to Bangkok, Thailand for the 2023 AAP Business Summit, held in partnership with Trade Winds ASEAN and the US Commercial Service.

This three-day program is an unparalleled opportunity designed to help companies achieve growth and exposure in Asian markets with exciting conference programing as well as multiple networking opportunities with leading US and multinational companies, senior US commercial diplomats from over 20 Asian countries, regional industry experts and government officials. Participation includes the ability to self-schedule one-on-one networking meetings with other forum attendees.

Companies can RSVP through the following link: AAP Business Summit 2023 –Trade Winds ASEAN

For more information, please contact: Heidi at 66 02 119 3350 or [email protected]


Now is the Time to Join AmCham!

Now is the Time to Join AmCham!

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What is Your Company Doing on COVID-19?

Please let us know what measures your company may be taking in the form of donations and other assistance to help Indonesia during this time of confusion and concern. Contact [email protected] with your news. We would like to publicize the ways that our AmCham companies are pitching in.

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We urge you to send us press releases and other information that we can pass on to the broader AmCham community. If you have items of interest, please email material to [email protected]. Follow this link to information provided by the US Embassy

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AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard is the Managing Editor.

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