Businesses in Batam Cheer News of SEZs

By Arlina Arshad, The Straits Times
July 25, 2020

Amid the economic doom and gloom, businesses in Indonesia's Batam Island have something to cheer about after a top investment council gave the nod to the development of two special economic zones (SEZs) worth 22.2 trillion rupiah (S$2.1 billion).

The first site is at Nongsa Digital Park, in the island's upscale north-eastern Nongsa area, which will be dedicated to digital economy and tourism, and the second is at Batam Aero Technic, Lion Air Group's facility dedicated to aircraft maintenance, repair and overhaul.

The National Special Economic Zone Council, chaired by Coordinating Minister for Economic Affairs Airlangga Hartarto, made the decision during a virtual meeting of ministers and senior officials on July 10, where they concluded that both sites had the potential to create employment and boost economic growth, among other things.

“We have agreed to grant them the Special Economic Zone status as they have fulfilled all the requirements,” said Mr Airlangga in a statement posted on the council's website.

The Straits Times understands that the council has submitted its recommendation to President Joko Widodo, who is set to approve it via a government regulation.

An hour by ferry from Singapore, Batam together with Bintan and Karimun islands form what is collectively known as the BBK free trade zone (FTZ).

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Businesses and potential investors told ST that they had chosen Batam for its safe geographical location away from earthquake fault lines, and its proximity to Singapore. Its designation as a SEZ has cemented their confidence in investing in Batam.

Mr Tan Tong Hai, executive director of SEAX Global, a Singapore-based submarine cable connectivity services wholesaler which has a cable route between Singapore and Batam, hopes the SEZ would provide clarity on rules such as corporate tax, income tax on business travellers, and data ownership.

“We do hope that with the establishment of the SEZ, Nongsa Digital Park plans will take off and we can also ride with the growth to provide more connectivity services to our customers,” he said.