AmCham Update
AmCham Update Vol. 4 #94
First Golden Visa Issued, ASEAN Summit: Priorities and Praise, New De-Dollarization Task Force, Manufacturing Sector Continues Rise
Sep 06, 2023 |


Golden Visa Officially Released

The highly-anticipated golden visa is officially out, with OpenAI Chief Executive Officer Samuel Altman receiving the first golden visa ever released. The visa was made official through the release of two regulations: Minister of Law and Human Rights Regulation (Permenkumham) 22/2023 and Minister of Finance Regulation (PMK) 82/2023. The former provides details on the specifications of the golden visa, such as the applicant criteria, while the latter deals with the visa fees.

The golden visa program for foreign nationals is intended for professional special talent, investors and industry players, who will benefit Indonesia’s future economic development. The visa will be granted for a period of five to 10 years, thanks to the previously passed Government Regulation (PP) 40/2023 which increases the maximum period of limited stay permits, alongside its extensions, from five to 10 years.

An individual who establishes a company with a minimum investment of $2.5 million is eligible for a five-year visa, while a $5 million investment allows for a 10-year visa. Additionally, directors and commissioners of companies being formed in the country qualify for five-year visas when their companies invest $25 million, and for 10-year visas with investments totaling $50 million.

Individual investors not planning to establish a company in Indonesia can also obtain a five-year golden visa, with a minimum investment of $350,000 in Indonesian government bonds, public company shares, or savings/deposits. For a 10-year stay, the minimum investment is $700,000.

As mandated by President Joko Widodo, this policy specifically targets companies (both established and growing stage companies) to create jobs and invest more in Indonesia.

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Initiative Documents and Top Priorities for ASEAN Summit

Four Indonesian initiative documents will be further discussed by heads of state at the 43rd ASEAN Summit in Jakarta, which ends on Sept 7. ASEAN economic ministers have agreed to support the documents to be adopted by state leaders, Coordinating Minister for Economic Affairs Airlangga Hartarto said.

They include the Leader’s Declaration on Strengthening Food Security and Nutrition in Response to Crisis; Leaders' Statement to Develop the ASEAN Digital Economy Framework Agreement (DEFA); ASEAN Leaders' Declaration on ASEAN as an Epicenter of Growth; and the ASEAN Blue Economy Framework.

Economic digital cooperation and energy transition will be the two top priorities for this year’s ASEAN Summit. Issues such as the Carbon Neutrality Strategy and the development of an electric vehicle (EV) ecosystem in the region will also be further explored by state heads, said Airlangga.

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IMF and World Bank Praise ASEAN Economic Resiliency

The World Bank and the International Monetary Fund (IMF) praised ASEAN’s economic resiliency against a backdrop of the global economic slowdown induced by the Covid-19 pandemic and global conflicts, during a plenary session at the 43rd ASEAN Summit in Jakarta, on Sept 5.

ASEAN’s projected economic growth of 4.9 percent, compared to the global projection of just 3 percent, made it a pinnacle of global cooperation, Minister of Foreign Affairs Retno Marsudi said. She added that promising fields of investment in ASEAN included health, education, and digital infrastructure.

ASEAN trade reached $3.9 trillion and foreign direct investment reached $222 billion, with intra-ASEAN trade continuing to grow, ASEAN Secretary General Kao Kim Hourn said. He added that more countries wanted to sign the Treaty of Amity and Cooperation with ASEAN.

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Indonesia Forms De-Dollarization Task Force

Indonesia's National Task Force for Local Currency Transactions (LCT) was officially formed to reduce reliance on the US dollar and promote use of local currency, on Aug 5.

The formation of the task force was marked by the signing of memorandum of understanding (MoU) between a number of ministers, alongside the heads of Bank Indonesia (BI), the Financial Services Authority (OJK), and the Deposit Insurance Corporation (LPS), during the sidelines of the ASEAN Indo Pacific Forum (AIPF) in Jakarta.

The LCT Task Force will enhance coordination and provide better policy synergy among government agencies to increase the use of local currencies in bilateral transactions between Indonesia and partner countries, said Governor of Bank Indonesia Perry Warjiyo.

Indonesia already has LCT cooperation with banks from neighboring countries Malaysia, Thailand, Japan, and China. Singapore and South Korea have also signed cooperation agreements to build a framework for LCT implementation with Indonesia.

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Healthy Manufacturing Sector On the Rise

Indonesia’s manufacturing sector continued to improve in August, with the Purchasing Managers' Index (PMI) rising slightly to 53.39 from 53.3 the previous month, its highest since October 2021. The score was due to an increase in foreign and domestic demand, which accelerated production expansion, said Economics Associate Director at S&P Global Market Intelligence Jingyi Pan.

Indonesia’s manufacturing index has been in the expansionary phase for the past two years, with companies also having a positive outlook in regard to production, driving expansion in labor usage and purchasing activities.

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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.

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