AmCham Update Vol. 4 #52

Increased Foreign Investor Visa Screening, AmCham Meets Nusantara Authority, Networking Once Upon a Time, Services Committee, Indonesia/Malaysia Raise EU Deforestation Law Concerns

May 26, 2023

Gov't to Tighten Screening for Foreign Investor Visas

The Directorate General of Immigration plans to tighten the screening of visa requirements for foreign investors and reevaluate requirements for resident permits of foreign nationals through the revision of Government Regulation 31/2013 on Immigration, in response to a recent string of investor visa misuse.

This reevaluation will be conducted in coordination with relevant government institutions, including the Ministry of Investment, to improve policies that can support Indonesia’s economy, said Director General of Immigration Silmy Karim. Additional requirements, such as asset verification carried out by state-owned banks and increased minimum funds, are being considered to ensure only genuine investors can apply for the visa.

The proposed changes will be submitted to President Joko Widodo for further direction. Once the President weighs in, the government will proceed to revise GR 31/2013, Silmy said.

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AmCham Meets Nusantara Capital City Authority

AmCham Indonesia had a fruitful discussion with the Chairman of the Nusantara National Capital (IKN) Authority, Bambang Susantono, on May 24, at his office in Jakarta.

The government has been pushing hard to attract foreign and domestic investors to get involved in IKN, which is intended to not only move Indonesia’s capital from Jakarta but is also part of Indonesia Vision 2045, the desire to become a developed country. President Joko Widodo has said he wants to celebrate Independence Day next year in Nusantara, although the project will only be partly completed.

Bambang said IKN will be a lively and digitally connected city, not a boring government city.

Participants were curious about the financial standing of the project, and the impact of the political year ahead on its progress. With only 20 percent of the funding needed coming from the state budget, IKN senior executives said 80 percent must be fulfilled through public private partnership (PPP) schemes and other mechanisms. There will be a dedicated state-owned enterprise under the Authority to implement the project and work with investors.

Participants also asked about critical digital infrastructure to support the smart city, policy issues revolving around cross-border data flows in the city and details of the PPP schemes.

Bambang invited interested AmCham company members to visit the new capital in Kalimantan. AmCham will work to put together a visit for interested members to the site.

Once Upon a Time: Networking With AmCham

Mixing fun with business continued this week when AmCham Indonesia hosted another professional networking evening on May 25 sponsored by AGS Indonesia. Titled “Once Upon a Time,” the event unfolded at Tugu Kuntskring Paleis, a historical building which originally housed the Fine Arts Circle of the Dutch East Indies and was opened in 1914.

To kick off the evening, AmCham Board member Lydia Ruddy welcomed guests, followed by AGS Indonesia’s President Director Damian Scherers, who introduced the moving and storage company and thanked everyone for joining.

The highlight of the evening was the lucky draw prizes. Congratulations to Desilina Sugiri (AGS Indonesia), Bonita (Samson Tiara) and Tommy Ferdiyanto (Pebsteel) for winning access and membership vouchers to The American Club. Gerry Nara (3G Indonesia) and Baoa Sinaga (Atalian) won sports items from Under Armour as well as wines from AmCham Indonesia.

Congratulations also to Rose Dreessen and Ririn Lieani (Grand Hyatt) for winning CGV Gold movie vouchers from AmCham. Lucky ladies, Lydia Ruddy and Melissa Dwieputri (Asian Tigers) won wonderful body care packages from AGS Indonesia. Lastly, Max Garcia (The American Club) won a bottle of wine from 3G Indonesia.

The event also saw AmCham members and friends enjoying wine selections provided by Swillfam and The Peak Connoisseur.

Look for more fun events as we strengthen partnerships within the community and let our hair down. We hope to see you soon!

For more information on AmCham Indonesia’s activities please reach out to Awis Mranani at [email protected]

AmCham Services Committee Looks at Political Year Ahead

AmCham’s Services Committee hosted its third breakfast meeting of the year on May 24 at the American Club. Committee Chair Peter Meyer kicked-off proceedings and greeted participants from numerous sectors, including banking, insurance, politics, security, healthcare, property, hospitality, and education.

One topic of discussion was the upcoming presidential elections. Participants also gave updates on the business situation and outlook in their sectors, noting positive growth for data centers and information and communications technology, but not-so-good for office property.

The committee also conducted its usual “temperature take,” with 60 percent expressing a positive outlook, 27 percent neutral, and only 13 percent negative.

For more information about the Services Committee, please contact [email protected]

Indonesia, Malaysia to Voice EU Deforestation Law Concerns

Coordinating Minister for Economic Affairs Airlangga Hartarto and Malaysia’s Minister of Commodities Fadillah Yusof will visit Brussels next week to voice concerns with the European Parliament over a new EU deforestation law.

The law was approved by the European Parliament last month, and bans imports of coffee, beef, soy, and other commodities to European Union (EU) countries unless the exporters provide verifiable proof they were not grown on land deforested after 2020. Hefty fines will be implemented for those found in violation of the law.

The regulation could be hurt small farmers due to onerous administrative procedures, Airlangga said. He said the law could also exclude the important role of smallholders in the global supply chain. The regulation has been welcomed by environmentalists as an important step to protect forests.

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Indonesia and Iran Sign Preferential Trade Agreement

President Joko Widodo and Iran President Ebrahim Raisi signed a preferential trade agreement (PTA) to expand economic relations between the two nations on May 23. President Widodo said he hopes the agreement will increase trade relations between the two, while also increasing Indonesian exports to the Middle East.

Trade between Iran and Indonesia initially dropped due to US sanctions, but has slowly bounced back. In 2022, trade between the two countries was $257.20 million, with Indonesian exports at $242.60 million and imports at $14.60 million. Indonesia saw a surplus of $227.90 million from the trade relationship in the past year.

Through the newly signed agreement, Indonesia will gain greater access to the Iranian market for its goods like pharmaceuticals, textiles and palm oil. Indonesia will also lower tariffs for oil and chemical products, metals and certain dairy products coming from Iran.

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BI Holds Benchmark Interest Rate at 5.75%

Bank Indonesia (BI) maintained its benchmark 7-day reverse repo interest rate at 5.75 percent at an internal meeting on May 24-25. BI Governor Perry Warjiyo said the deposit facility rate was maintained at 5 percent and the lending facility rate at 6.5 percent.

Economists said this was a safe move as the global economy remains uncertain, and also aims to maintain the stability of the rupiah.

Bank Mandiri economist Faisal Rachman said the move would have a positive impact until the end of 2023. Although domestic inflation is cooling, external factors, US banking problems, influenced BI’s decision to maintain the interest rate.

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Now is the Time to Join AmCham!

We offer a full slate of meetings, events, and information for our community. But we can only do this through the support of our members. If you are not yet an AmCham member, please join now.

AmCham Indonesia is open to all companies with an interest in US business relations and we have many non-American members.

We are a community and we welcome you!

Reach us at [email protected] or click below!

JOIN AMCHAM

Stay well

We urge you to send us press releases and other information that we can pass on to the broader AmCham community. If you have items of interest, please email material to [email protected]. Follow this link to information provided by the US Embassy

Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.

AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard

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