As global capital tightens and the OECD’s Global Minimum Tax (GMT) is fully implemented, the Indonesian government has chosen to go against the tide—extending its “tax holiday” policy until December 31, 2025, sending a strong signal of continued openness to high-quality foreign investment.
For Chinese enterprises looking for an investment destination that is policy-friendly, cost-efficient, and risk-predictable, Indonesia is now entering a prime window of opportunity.
Latest Policy Highlights:
In June 2024, Indonesia’s Ministry of Finance issued Regulation No. PMK 69/2024, officially extending the tax holiday policy through the end of 2025. The policy is aimed at enhancing Indonesia’s appeal to strategic industries, offering 100% corporate income tax exemption for 5 to 20 years to businesses entering key sectors such as energy, manufacturing, and the digital economy.
According to the announcements from BKPM (Indonesia Investment Coordinating Board) and the Ministry of Finance, the following are the latest applicable conditions:
Currently, projects benefiting from the “tax holiday” account for 25.2% of total foreign direct investment in Q1 2025, representing a 40% increase compared to the same period last year. These projects are primarily led by Chinese green energy manufacturing enterprises and data center investments from Western tech companies. [Source: BKPM Data Release, April 2025]
Strategic Logic Behind the Policy
Indonesia is not only the largest economy in Southeast Asia but also a key maritime hub for the Belt and Road Initiative (BRI). In response to the implementation of the Global Minimum Tax, Indonesia has opted to stabilize multinational capital through more targeted local tax incentives, aiming to prevent capital outflow to neighboring countries like Vietnam and Thailand.
At the same time, the policy has been integrated into the national energy transition and industrial upgrading agenda. Several industrial parks—such as Batang Industrial Zone in Central Java and the Green Industrial Park in North Kalimantan—have rapidly gained traction due to these tax incentives and become key areas for Chinese investment.
Economic Spillover Effects: Industrial Park Upgrading and Balanced Regional Development
It’s not just about tax incentives. The implementation of these policies has led to tangible regional economic growth. For example, in areas like Central Java, North Kalimantan, and Sulawesi, the entry of new enterprises benefiting from tax holidays has spurred rapid development in supporting sectors such as transportation and logistics, construction, and electricity infrastructure.
These developments are shaping an integrated pathway of “Infrastructure + Industry + Talent,” creating a more resilient ecosystem for long-term enterprise operations.
Choosing Indonesia: The Right Time. Choosing NBK: Worry-Free and Reliable
While Indonesia’s tax environment is attractive, its administrative procedures are complex and language barriers are significant. For companies to truly understand the policies and benefit from them, it is strongly recommended to work with a professional local team for application and compliance planning.
NBK (Nusantara Business & Tax Compliance Services) ，Headquartered in Jakarta, NBK specializes in supporting Chinese enterprises in Indonesia across the entire cycle of “Establishment + Compliance + Ongoing Operations.”
We provide:
- Full-service Company Setup
PMA / PMDN registration with tailored support in shareholding structure design and business license approvals - Tax Holiday Application & Planning
Industry screening based on PMK 69/2024, document preparation, coordination with BKPM and the Ministry of Finance - Tax and Financial Compliance Management
Bookkeeping, tax filing, annual reporting, BPJS (social security) submission, audit support - Trilingual Advisory Team (Chinese-English-Indonesian)
Full Chinese-language guidance throughout the process, ensuring efficient communication and clear understanding of policies - Long-Term Compliance Advisory Services
Real-time updates and strategic support in response to regulatory changes
Quick Tip
- The end of 2025 is the deadline for tax holiday applications. Missing this window could mean losing out on up to 20 years of tax incentives.
- After entering the Indonesian market, companies can also combine multiple incentives such as tariff reductions, SEZ (Special Economic Zone) free zone policies, and employee training subsidies to further optimize their cost structure.
The end of 2025 is the deadline for tax holiday applications. Missing this window could mean losing out on up to 20 years of tax incentives.
Let us seize this moment of Indonesia’s economic takeoff and position ourselves for the next growth engine.