Foreign investment to Indonesia in the digital sector is predicted to grow fast



The amount of foreign investment entering Indonesia’s digital sector is expected to increase in 2022.

This estimate is based on several things, one of which is the increase in Indonesia’s ranking in the Ease of Doing Business (EoDB) released by a number of international agencies. Indonesia’s ranking continues to increase from year to year.

Center for Indonesian Policy Studies (CIPS) researcher Novani Karina Saputri said the process of simplifying permits and regulations at the central and regional levels must continue to be carried out to support this ranking increase. Clear, effective and efficient permits and regulations will encourage more investors to invest in Indonesia.

Another thing that can encourage an increase in the amount of foreign investment in the digital sector is an investment scheme in the form of a tax holiday. The scheme designed by the Minister of Finance is in the form of incentives for industries engaged in the information technology sector or companies with a minimum value of IDR 500 billion.

They get a form of tax relaxation in the form of a non-paying income tax (PPh) facility with a reduction in the range of 10% -100% for a period of 5-15 years which can be extended up to 20 years.

“This enforcement will increase the growth of industries engaged in information technology. Apart from that, this policy will also encourage investment in this sector. Apart from boosting economic growth, investment will also encourage business to grow and be able to absorb more workers, ”he explained in his press release.

It is recorded that foreign investment entering Indonesia’s digital sector in 2017 reached US $ 4.7 billion. This is evidenced by the existence of four unicorn start-ups in Southeast Asia based in Indonesia. The name unicorn is given to start-up companies that have a valuation of US $ 1 billion.

Mastery of digital technology must also be encouraged at all levels of society. This is because the form of business is starting to shift to the digital sector. To support this, socialization regarding digital economic literacy must be carried out and made into a routine activity. It is hoped that the central government, regional governments, the banking sector and the financial industry will be the parties implementing the socialization.

The potential for online transactions in Indonesia is currently classified as good, namely at a growth rate of 22%. This higher growth rate compared to China and India is a potential and opportunity for digital transformation in various fields so that it can compete with neighboring countries.

Therefore, it is very attractive for foreign investors to enter and work on the digital sector in Indonesia. Especially in Indonesia, there are many digital companies that need investor partners for business development.

However, foreign investors must pay attention to regulations in Indonesia. In addition, we also need to be careful when looking for business partners in Indonesia. You must pay attention and study the reputation, experience, trustability and integrity of the owner so that your company is not deceived.

If you are an investor or a businessman who wants to invest in Indonesia, we are ready to help you find relevant and trustable business partners. We are also ready to help if your company needs business research related to Indonesian companies.

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