Indonesia has promised Nigerian investors preferential treatment, including potential tax incentives and a special visa arrangement, as the country seeks to attract more Nigerian businesses into its economy.
A senior trade analyst with Indonesia’s trade promotion authorities, Iska Huberta Sinural, disclosed this on Tuesday while addressing Nigerian journalists in Jakarta ahead of the 41st Trade Expo Indonesia.
Sinural said the Indonesian government was prepared to offer special privileges to foreign investors, including Nigerians seeking to establish businesses in the country.
“There will be special treatment actually when you have to invest here. For the investment, we will give special or privilege. The visa for investors will be a bit different.
“The tax and also other things will be incentives,” she said.
Investor Visa Options
One of the options available to qualifying foreign investors is the Investor KITAS, a temporary stay permit that allows eligible shareholders in Indonesian companies to reside in the country and, subject to the conditions of their permits, manage their investments.
The permit is designed to make it easier for foreign investors to establish a presence in Indonesia without bearing some of the costs associated with conventional employment-based immigration arrangements.
According to Indonesian immigration consultancy Lets Move Indonesia, qualifying investors can avoid the mandatory foreign-worker compensation fund associated with a conventional working KITAS, potentially saving $1,200 annually.
The consultancy estimates that investors opting for a two-year Investor KITAS could save $2,400 over the permit’s validity period, excluding other applicable costs.
The visa could offer Nigerian entrepreneurs an avenue to establish manufacturing, agricultural processing, food and beverage businesses in Indonesia, areas Sinural identified as potential opportunities for stronger commercial ties between the two countries.
She had urged Nigerian businesses to move beyond importing Indonesian products and consider investing in local production to improve access to goods and strengthen relationships with manufacturers.
“The option of shipping, is a bit hard. So why don’t you invest here? And then it will be easy for us to get the products when you invest here,” she said.
Sinural also encouraged Nigerian businesses to introduce locally produced food, beverages and other products to Indonesian consumers, suggesting that partnerships between companies in both countries could expand trade beyond conventional buyer-seller transactions.
What Is Indonesia’s Investor KITAS?
The Investor KITAS, also known as Investor ITAS, is a temporary stay permit for eligible foreign investors who hold shares in an Indonesian foreign-owned company, known as a PT PMA. It allows qualifying investors to reside in Indonesia and oversee their investments, subject to the conditions attached to their immigration status.
The permit is available for one or two years, depending on the applicant’s eligibility and passport validity, and may be renewed if the relevant requirements are met.
Unlike a conventional working KITAS, the Investor KITAS can exempt qualifying investors from the mandatory foreign-worker compensation contribution, commonly known as the DPKK fund. However, the permit does not automatically authorise every type of employment; the investor’s position in the company and applicable immigration and labour regulations determine the activities permitted.
According to Lets Move Indonesia, applicants generally need to hold at least 10 billion Indonesian rupiah in shares in a qualifying company. The company must also satisfy applicable capital and investment requirements and possess the relevant business registrations and licences to sponsor the application.
Applicants also typically need a valid passport, company incorporation documents, tax registration details, business licences and other supporting records. The final requirements, investment thresholds and processing costs should be confirmed with Indonesian immigration authorities or a qualified immigration adviser before an application is submitted.
The Investor KITAS may also provide a basis for eligible investors to apply for dependent permits for their spouses and children, subject to the applicable rules.
