Aceh Open for Business and Investment

Great potential: The 2,622-hectare-Special Economic Zone of Arun Lhokseumawe is ready for future investment of US$ 3.8 billion by the year 2027 with an estimated 40,000 new jobs in the fields of oil and gas, petrochemicals, logistics, agro produce and pulp paper. (Courtesy of Pemprov Aceh/)

The rising flow of global capital to a country or a region calls for a competitive edge in investment, which commonly includes the development of infrastructure, resource availability, productivity and workforce skills, as well as the development of the business value chain.

Of highly equal importance are the regulatory environment, stability, openness to regional and international trade, which will ensure that investors reap profits from their long-term investment.

The government of Aceh is positioning itself as one of the leading destinations for investment in Indonesia by leveraging its strategic location along the Strait of Malacca, productive workforce and top-ranked infrastructure.

“Our regional government has been focusing on the development through cooperation with the private sector,” said Aceh’s acting governor, Nova Iriansyah.

With its special autonomy status, natural resource-rich Aceh is open to private sector businesses that wish to seize opportunities in one of the fastest emerging markets in Asia.

Nova said the province was open to national and international investment, especially in four sectors: agribusiness, tourism, energy, infrastructure and special industrial zones.

This explains why Aceh has taken breakthrough measures to attract investment, which include developing Sabang Free Port and Free Trade Zones (FTZ), as well as Special Economic Zones (SEZ) and promote ease of doing business.

Under Law No. 37/2000, the province established Sabang Free Port and a Free Trade Zone (FTZ) with a wide range of facilities for doing business in Sabang, managed and operated by the Sabang Management and Development Agency (BPKS).

Sabang Zone has free customs clearance, custom (import-export) duties, luxury goods tax and value added tax (VAT). Apart from that, Free Trade and Free Port determined for 70 years and the BPKS has the authority to grant business licenses and other licenses, hence, the procedures are faster and easier.

The Special Economic Zone (SEZ) of Arun Lhokseumawe, covering more than 2,600 hectares, is set to become an international hub for oil and gas.

Located in the world’s busiest international shipping routes next to the Strait of Malacca, the SEZ welcomes companies and investment to set up their businesses in the field of agro-industry, manufacturing, logistics, oil and gas with numerous benefits including a tax holiday, foreign ownership of land and fast-track licensing.

Amid increasing demand for halal food globally, the government continues to support business communities in the region by allocating special zones for marine food processing in Lampulo International Fishing Port and other industries on the Duty Free Island of Sabang.

In the agricultural sector, Aceh is abundant with highly valued commodities, among them are coffee, cocoa, and palm oil. The government has several strategic plans for palm oil, which include providing support for sustainable palm oil production and creating a favorable condition for investment.

In line with its permit issuance reform, Aceh is strongly committed to being at the forefront in the implementation of the online single submission (OSS) system by setting up the provincial OSS acceleration team and standard operating procedure in compliance with Government Regulation No. 24/2018, according to Nova.

The Aceh administration views OSS as a crucial instrument that plays a supporting role in boosting investment in Aceh. With support from the central government, the Aceh administration has managed to simplify procedures for investors to set up their business in the province in less than three working days, as it is affirmed by President Joko “Jokowi” Widodo through various economic stimulus packages.

The Aceh administration has also pledged to cut regional tax by up to 60 percent as an incentive for business players that meet requirements set in the Aceh regulation on investment.

With a strategic location, ease of doing business and incentives, Aceh is, beyond a doubt, a favorable investment destination.