Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, conveyed President Jokowi’s message to invite Chinese investors to invest in the Nusantara Capital City (IKN). The message was conveyed during the meeting with the Chairman of China’s National Development and Reform Commission (NDRC) Zheng Shanjie, in Beijing, China, on Tuesday (4/4). 

"The Nusantara Capital City has received special attention from President Jokowi that its progress is going very well, and it's hoped that it will also receive support from China”, Luhut wrote on his Instagram account.

Luhut mentioned from 2014-2022, China invested a total of US$30.8 billion in Indonesia. It resulted in the establishment of 15,906 projects and has positioned China as the third largest investor in Indonesia.

During the meeting, Luhut stated that due to the downstreaming programs and various breakthroughs for economic transformations, Indonesia has been able to maintain its economy strong and competitive among G20 countries. 

In addition, the meeting discussed various topics, including the progress of the Jakarta-Bandung high-speed railway, the Kaltara Green Industrial Zone, the GMF-BRI project, the Herbal Center, South-South Cooperation, and vocational training.

Luhut also invited H.E Zheng to visit Indonesia so they could observe the progress of collaboration projects between Indonesia and China. 

“We hope that the strong cooperation between Indonesia and China will inspire developing and developed countries to collaborate in achieving fair and sustainable development goals,” Luhut added.

Optimization to draw foreign investment to IKN

As known, President Jokowi seeks 80 percent of the IKN development budget to come from Public-Private partnership (KPBU) and direct investment while the rest will be sourced from the state budget. 

In an effort to attract investments, the government has already conducted market-sounding to potential investors regarding the IKN development project. As IKN Authority’s Deputy of Green and Digital Transformation, Mohammed Ali Berawi stated that the government already attended business forums that came from neighboring countries and other nations. 

The Indonesian government had also received various invitations for a meeting initiated by investors and companies interested in participating in the IKN development. Until January 30, 2023, the IKN Authority had received 100 letters of intent from potential investors with as many as 90 letters being followed up , as reported by antaranews.com.

As part of the effort to attract foreign investors, the Indonesian government drafted a regulation that will provide ease-of-access for investors looking to make Investments in IKN. 

The draft regulation contains several points such as tax holidays for investment and office relocation, as well as tax deductions for selected activities. Additionally, the regulation also included special customs and excise treatment, special tax treatment for financial centers, and value-added tax exemptions.