Indonesia offers one of Southeast Asia’s most comprehensive investment incentive frameworks for export-oriented businesses. In 2025, it provides tax holidays, PPN exemptions, bonded zone benefits, and regulatory support to attract foreign investors. These initiatives are part of Indonesia’s broader strategy to stimulate exports, strengthen foreign exchange reserves, and maintain GDP growth above 5%.
Also read: Why Indonesia Remains an Attractive Foreign Investment Destination in 2025
Key Tax Incentives for Export-Oriented Investments
Tax Holiday Program (PMK No. 69/2024)
Indonesia’s tax holiday program offers 50–100% corporate income tax exemptions for up to 20 years. The scale and duration depend on investment thresholds:
- 100% exemption for investments over IDR 500 billion, valid up to 20 years.
- 50% exemption for investments between IDR 100–500 billion for 5 years.
Sectors eligible include digital economy, green infrastructure, manufacturing, and EV ecosystems.
Also read: Step-by-Step: How to Qualify for Tax Holiday in Indonesia
Tax Allowance for Priority Industries
Businesses in labor-intensive, export-heavy sectors enjoy:
- 30% tax-deductible allowance over 6 years
- Accelerated depreciation
- 10% withholding tax on dividends to foreign entities
- Loss carryforward up to 10 years
Applicable industries range from agriculture and logistics to high-tech manufacturing.
Also read: Tax Holiday vs Tax Allowance in Indonesia: What Investors Need to Know
PPN Exemption and Bonded Zones
Value-Added Tax (PPN) Exemptions
PPN exemptions apply to machinery and raw materials imported for production:
- 100% exemption in Special Economic Zones and bonded logistics zones
- These incentives are also available in Free Trade Zones such as Batam, Bintan, and Karimun.
This drastically reduces production costs for exporters reliant on imported components.
Also read: VAT Exemption in Indonesia: Key Policies and Implications
Bonded Zones and Warehousing Incentives
Bonded logistics centers (BLCs) allow duty suspension on goods stored and processed for export. Exporters operating in these zones gain:
- Deferred import duty payments
- Simplified customs procedures
- Centralized inventory systems
These zones improve cash flow and logistics efficiency, particularly for just-in-time exporters.
Also read: Top Indonesian Strategic Sectors for Tax Incentives in 2025
Strategic Export Sectors with Enhanced Incentives
Pioneer Industries
Indonesia designates 18 “pioneer sectors” for elevated incentives:
- EV components, pharmaceuticals, aerospace, robotics, shipbuilding, digital infrastructure
- Minimum investment of IDR 100 billion
- Eligible for tax holiday extension to 2027
These sectors receive priority processing and full tax exemptions if criteria are met.
Green and Digital Sectors
Businesses exporting renewable energy or digital technology products benefit from:
- Super deductible R&D tax incentives (up to 300%)
- 0% income tax for data centers > IDR 1 trillion in capital
- Carbon credit markets integrated into investment returns
These forward-looking sectors align with Indonesia’s sustainability and innovation goals.
Also read: Investment Incentives for Green Tech and Renewable Energy Projects in Indonesia
Export-Based Foreign Exchange Incentives (PP No. 22/2024)
To stabilize the rupiah, Indonesia encourages FX retention by exporters:
- 0% income tax on FX earnings held over 6 months
- 2.5% rate for FX retained under 6 months
- Applies primarily to natural resource exporters
This FX retention policy supports macroeconomic resilience while rewarding compliant exporters.
Regional and Zone-Based Incentives
Special Economic Zones (KEKs)
KEKs like Sei Mangkei and Batam offer:
- Corporate tax exemption up to 20 years
- PPN and customs duty exemption
- Accelerated permits and land rights (HGB up to 80 years)
- 100% foreign ownership in key sectors
Businesses in KEKs benefit from consolidated regulatory treatment and proximity to export hubs.
Also read: The Benefits of Investing in Indonesia’s Special Economic Zones (SEZs)
Ibu Kota Nusantara (IKN) Investment Benefits
Investing in Indonesia’s new capital brings:
- 100% corporate tax exemption for 10 years (IKN HQ relocation)
- PPN and PPnBM exemptions
- Special immigration facilities and longer land use rights
- Digital licensing with OSS and IKN-specific permits
IKN represents a forward-looking investment zone designed to host sustainable, tech-driven export operations.
Administrative Simplification through OSS
The Online Single Submission (OSS) system consolidates:
- Investment licensing
- Tax incentive applications
- Land use and immigration permits
Export businesses can use OSS to track their application status, upload documents, and receive approvals—all through one national platform.
Also read: How to Apply for Indonesia Investment Incentives via OSS
The 2025 investment incentive framework in Indonesia positions the country as a strong contender for export-driven enterprises. From tiered tax holidays and PPN exemptions to bonded zones and digital R&D support, the ecosystem is tailored for scalability, innovation, and compliance.
With a robust OSS framework and a government keen on attracting FDI, investors have clarity, legal certainty, and tangible fiscal advantages. For global exporters seeking a resilient ASEAN base, Indonesia is a top-tier destination.
If you are considering starting a business in Indonesia, there are a number of resources and support services available to help you get started.
InvestinAsia is among the companies that specialize in aiding you with Indonesia company registration. We boast a team of seasoned experts who can guide you throughout the process of:
- Foreign company / PMA registration in Indonesia
- Indonesia representative office registration
- PT PMDN Set Up
- Virtual office setup in Indonesia
- Business registration number in Indonesia
- Indonesian Business Licenses
- Indonesia Trademark Registration
- Indonesia Tax Consultant and Compliance Services
If you are interested in starting a business in Indonesia, you can start by contacting us for FREE consultation.
FAQs
What tax incentives are available for exporters in Indonesia?
Exporters can access tax holidays, PPN exemptions, bonded zone benefits, and FX income tax relief.
What are the requirements for tax holidays?
You must invest over IDR 100 billion in a pioneer sector and register via OSS with BKPM.
Exporters receive 0% income tax if they retain FX earnings in domestic banks for over 6 months.
What is the benefit of setting up in a KEK?
KEKs offer long-term tax exemptions, import duty relief, and simplified customs procedures.
Are digital and green sectors eligible for incentives?
Yes, including super deduction tax for R&D and zero corporate income tax for major digital infrastructure.
References:
