In line with the relocation of the Ibu Kota Nusantara in Kalimantan from Daerah Khusus Ibukota Jakarta, the government recently ratified a Government Regulation Number 12 of 2023 on Business Licensing, Ease of Doing Business, and Capital Investment for Business Actors in Ibu Kota Nusantara (“GR 12/2023”). This new regulation aims to provide greater certainty, opportunity, and participation for business actors in the context of accelerating development in Ibu Kota Nusantara (“IKN”).

Article 17 of GR 12/2023 allows business actors to be given land rights against land allocated by IKN in the form of:

1. 1. Income tax;
   2. Value added tax and/or sales tax on luxury goods; and/or
   3. Customs, that are within the authority of the central government.

As for the investment facility within IKN Authority includes:

1. 1. Special tax facilities and special revenue for IKN; and
   2. Facilitation, land provision, infrastructure for the implementation of investment activities in IKN.

All things considered, business actors intending to conduct business in the IKN area shall pay attention to the ability of GR 12/2023 in ensuring easy access to land rights, conducting business in housing and residential areas, as well as to obtain investment facilities.

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FKNK Law Firm

Note: If you have any questions on this matter, you may contact our lawyers:

Partner, Widyantoro ([email protected] / +62 855-1020-481)

our Associate, Seyba Nabilla ([email protected] / +62 813-3000-6012)

1. 1. Right to Cultivate;
   2. Right to Build; or
   3. Right of Use,

in accordance with the designation of business activities. The allocation of land under Right of Land Management to business actors is set forth in the form of an agreement between IKN Authority and the business actors. With that in mind, IKN Authority provides assurance regarding the certainty of the granted Right to Cultivate, Right to Build, or Right to Use as stated in the agreements.

Furthermore, IKN Authority has the authority to allow actors in the housing and residential areas to conduct their businesses in the IKN area, if they have not fulfilled their balanced housing obligations in other areas, as regulated under Article 25 of GR 12/2023. 

The government also considered providing investment facility to contribute in ensuring the ease of doing business for business actors. These facilities include all forms of fiscal and non-fiscal incentives, namely:

1. 1. Income tax;
   2. Value added tax and/or sales tax on luxury goods; and/or
   3. Customs, that are within the authority of the central government.

As for the investment facility within IKN Authority includes:

1. 1. Special tax facilities and special revenue for IKN; and
   2. Facilitation, land provision, infrastructure for the implementation of investment activities in IKN.

All things considered, business actors intending to conduct business in the IKN area shall pay attention to the ability of GR 12/2023 in ensuring easy access to land rights, conducting business in housing and residential areas, as well as to obtain investment facilities.

⸻

FKNK Law Firm

Note: If you have any questions on this matter, you may contact our lawyers:

Partner, Widyantoro ([email protected] / +62 855-1020-481)

our Associate, Seyba Nabilla ([email protected] / +62 813-3000-6012)