President Widodo Signs Regulation for Investor Incentives in Nusantara Capital
Jakarta, The Gulf Observer: President Joko Widodo has signed Presidential Regulation Number 75 of 2024, focusing on incentives for potential investors involved in building services and facilities at the new national capital, Nusantara (IKN). This regulation, officially promulgated on July 11, 2024, aims to accelerate the development of Nusantara by providing various incentives and business licensing facilities to businesses engaged in basic, social, and commercial service provisions.
The regulation details the incentives and business licensing facilities available through the IKN Authority (OIKN), ministries/institutions, and regional governments, in compliance with statutory provisions. According to Article 5, Paragraph 1, the head of the OIKN will identify pioneer business actors who have expressed interest and signed a “letter of intent” with the OIKN. Currently, Basuki Hadimuljono, Minister of Public Works and Public Housing, serves as the acting head of the OIKN.
Pioneer business actors who participate in developing IKN with funding sources outside the National Budget (APBN) are required to initiate their development projects within five years following the enactment of Law No. 21 of 2023 concerning the National Capital. As per Article 7, these actors may be charged a fee for management assets under control (ADP) by the OIKN of up to zero Indonesian rupiah or allowed to pay in installments.
Incentives for business actors include guarantees regarding land rights terms, as specified in Article 9. The regulation grants the right to cultivate land for up to 190 years over two cycles—95 years each. Additionally, building rights will be guaranteed for a maximum term of 80 years in the first cycle, with a possible extension for another 80 years in the second cycle, totaling 160 years. Building use rights will also be granted for a maximum period of 80 years, extendable for another 80 years. These land rights will be allocated based on specific criteria and evaluation stages.
Furthermore, the government will regulate the Tax Object Sales Value (NJOP), which will be determined by the OIKN in coordination with the special regional government. The accelerated implementation of the IKN development aims to establish a livable city ecosystem, particularly within the Core Central Government Area.
This regulation signifies the government’s commitment to creating a conducive environment for investment and development in Nusantara, thereby facilitating the growth of Indonesia’s new capital city.
