The Indonesian government has made significant reforms to improve the business environment and investment climate in recent years. This document outlines several reasons why now is a good time to invest in Indonesia: 1) Indonesia has maintained steady economic growth over the past decade and achieved investment grade ratings. It is positioned to become the 5th largest economy by 2030. 2) Indonesia has a large and growing productive population and consuming class, which will reach 180 million and 135 million respectively by 2030. 3) The government has implemented economic reforms, infrastructure development projects, and incentive programs to attract more equitable and diversified growth. Confidence in Indonesia is high among citizens and investors.

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“
The Indonesian government has done a lot to enhance the quality of the business
environment for the private sector, particularly in the last three years.
“
- Rodrigo Chaves, World Bank Indonesia Country Director
Investing in Indonesia : Why now?
https://news.bcpriok.info/wp-content/uploads/2017/03/cropped-bg4.jpg Property of MCIT, Republic of Indonesia. For Discussion Only

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WHY INDONESIA WHY NOW?
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▪ Steady economic growth in the past 10 years
▪ Investment grade by all major rating firms
▪ 5th largest economy in the world by 2030
▪ 135 million consuming class by 2030
▪ 180 million population in productive age by 2030
▪ Significant improvement in regulatory
environment as reflected in Ease of Doing
Business
▪ Most aggressive infrastructure development in
Indonesia’s history
▪ Extra incentive for investments in industrial, tourism
and special economic zones
▪ Fiscal reform for long term sustainable growth
▪ Law reform to ease business and investment
▪ Concrete policy for eradication of corruption
▪ Citizens’ trust on the Indonesian Government is at all
time high
▪ Strong investors’ confidence to invest further in
Indonesia
▪ Policies reform in ICT sectors

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Source: Indonesia Investment2017, Bank Indonesia 2017
WHY INDONESIA?
STEADILY IMPROVING ECONOMIC PERFORMANCE
Source: Bank Indonesia 2017, BKPM 2017
EVEN DURING GLOBAL ECONOMIC SLOWDOWN, INDONESIA STILL
RECORD REPUTABLE GROWTH THAN MOST COUTRIES
2017 ALSO MARKS THE TIME INDONESIA REGAINED INVESTMENT
GRADE ACROSS ALL MAJOR RATING AGENCY

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4Source How will the global economic order change by 2050, PwC 2017
GDP FORECAST IN MARKET EXCHANGE RATE (USD in Billion) GDP FORECAST IN PURCHASING POWER PARITY (USD in Billion)
No 2016 2030
1 United States 18,562 China 26,499
2 China 11,392 United States 23,475
3 Japan 4,730 India 7,841
4 Germany 3,495 Japan 5,468
5 United Kingdom 2,650 Germany 4,347
6 France 2,488 United Kingdom 3,530
7 India 2,251 France 3,186
8 Italy 1,852 Brazil 2,969
9 Brazil 1,770 Indonesia 2,449
10 Canada 1,532 Italy 2,278
16 Indonesia 941
No 2016 2030
1 China 21,269 China 38,008
2 United States 18,562 United States 23,475
3 India 8,721 India 19,511
4 Japan 4,932 Japan 5,606
5 Germany 3,979 Indonesia 5,424
6 Russia 3,745 Russia 4,736
7 Brazil 3,135 Germany 4,707
8 Indonesia 3,028 Brazil 4,439
9 United Kingdom 2,788 Mexico 3,661
10 France 2,737 United Kingdom 3,638
WHY INDONESIA?
INDONESIA IN POSITION TO BREAK THE TOP 5 LARGEST ECONOMY

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Source: Taking Advantage of the Demographic Dividend in Indonesia, UNFPA 2015
Indonesia An Inevitable Choice of Economic Transformation, Waltham Economy of Asia Review, 20114
Unleashing Indonesia Potential, McKinsey Global Institute 2012
Antara News, 2016
WHY INDONESIA?
GROWING PRODUCTIVE POPULATION AND CONSUMING CLASS
ESTIMATED 180M POPULATION IN PRODUCTIVE AGE,
AT THE PEAK OF DEMOGRAPHIC DIVIDEND
90 MILLION INDONESIANS COULD JOIN
THE CONSUMING CLASS BY 2030

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“
We are once again confronting challenging times in Indonesia.
The world looks full of uncertainty and risk.
What does it all mean?
It means that today is the time to invest - the best time to
invest.
“
President Joko Widodo
at Singapore-Indonesia Business Dialogue 2017
http://www.todayonline.com/sites/default/files/styles/photo_gallery_image_lightbox/public/23111382.JPG?itok=WXPxxh-8
Property of MCIT, Republic of Indonesia. Not for redistribution.

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WHY NOW?
NEW CENTERS FOR ECONOMIC GROWTH
Special Economic Zones
Industrial Zones
Strategic National Tourism Zones
Source: Coordinating Minister for Economic Affairs, 2017
NEW ECONOMIC ZONES TO SPUR MORE EQUAL AND DIVERSED GROWTH
NEW INFRASTRUCTURES TO SUSTAIN GROWTH
▪ 2650 km public roads
▪ 1000 km toll road
▪ Rapid transit bus in 29 cities
▪ MRT in 6 metropolitans and
17 large cities
▪ 24 sea ports
▪ 60 ferry ports
▪ Increase number of vessels
▪ 15 airports
▪ Increase pioneer flights
▪ 2159 km city rails
▪ 1099 inter-city rails
▪ 97.2% electrification
▪ 35000 MW power plan
▪ 33 Dams
▪ 30 hydroelectric power plants
▪ Irrigation systems for 1 m ha
▪ Oil refineries with 2 300.000 barrel capacity
▪ Increase the capacity of existing oil refineries

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• Deregulation
• Strategic Project
Acceleration
• Encouraging
housing for low-
income
I
• 3 Hours Permit
Issuance Program
• The abolition of VAT
for the transport
industry
• Integrated Logistics
Facility
II
• Lowering Fuel and
Electricity Price
• Simplification of
Land Permit for
Investment activity
• Expanding Small
Business Loan
Recipients
III
• Fair Wages system,
simple and can be
projected
• The ease and
affordability of
Small Business
Loans
IV
• Decrease in Tax
Revaluation of
Assets
• Eliminating double
taxation of REITs
V
5 Nov 2015
• Development of SEZ
• Ease of Water
Supply
• Simplifying the
Import Licensing for
Pharmaceutical
products
VI 4 Dec 2015
• Acceleration of Land
Certification Process
• Tax Incentives for
labor intensive
industry
VII 21 Dec 2015
• One Map Policy
• Refinery
construction
• Incentives for the
Aviation Industry
VIII 27 Jan 2016
• Acceleration of
Construction for
Electrical
Infrastructure
• Meat Price
Stabilization
• Deregulation in the
Logistics Sector
IX 11 Feb 2016
• Ease of Investment
Restrictions
X 29 Mar 2016
• Publishing REITs and
KURBE (export-
oriented business
loans)
• Indonesia Single Risk
Management - ISRM
• Pharmaceutical
Industry Development
XI
28 Apr 2016
• Simplification of
Licensing
Procedures,
Duration and Cost of
Starting a Business
in Indonesia
XII
E C O N O M I C
P O L I C Y P A C K A G E
I N D O N E S I A 2 0 1 5 - 2 0 1 99 Sep 2015 29 Sep 2015 7 Oct 2015 15 Oct 2015 23 Oct 2015
24 Aug 2016
• Accelerating
development of
affordable housing,
by reducing,
integrate, and
accelerate the
licensing process
XIII 10 Nov 2016
• Creating a roadmap
for the nation's e-
commerce industry:
• easing and
widening access
to funding
• offer tax
incentives, etc.
XIV
WHY NOW?
ECONOMIC POLICY PACKAGES FOR BUSINESS AND INVESTORS
15 Jul 2017
• Cost reduction for
freight and logistics
• Opportunities for
logistic insurance and
vessel maintenance
• Strengthening
National Single
Window
XV
STIMULUS TO HELP BUSINESS AND INVESTORS DURING GLOBAL ECONOMIC SLOWDOWN
31 Aug 2017
• Task Force for business
licensing process,
checklist licensing at
economic zones and data
sharing for licensing
• Regulator reforms and
single submission system
XVI

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▪ Central Government Task Force and Provincial Units
▪ Multi-sectors, from logistics, public services to education
▪ 17,600 reports in the first 50 days
▪ By July 2017 : 917 sting operations, 1834 suspects processed
and Rp 17 billion confiscated
▪ Presidential directive to halve 42,000 existing regulations by 2019
▪ By end of 2016, 324 regulations were revoked and 75 regulations
were revised across 20 Ministries and 3,143 regulations in
Ministry of Home Affairs and at Local Governments level
ILLEGAL LEVIES ERADICTION TASK FORCE [SABER PUNGLI]
SIMPLIFICATION OF REGULATION
WHY NOW?
CONCRETE MEASURES FOR LAW REFORM
Areas of Law Reform package I :
1. Legislation management
2. Reforming law enforcement agencies
3. Creating legal culture
I 26 Oct 2016
Areas of Law Reform package |I :
1. Simplification of regulations
2. Accessibility of legal assistance
3. Early warning system for radicalism and
terrorism
II 17 Jan 2017
LAW REFORM PACKAGES TO IMPROVE BUSINESS AND INVESTMENT CLIMATES
Source: Setkab, 2016, Kompas 2017, Detik 2017

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Source: Government at a Glance 2017, OECD
WHY NOW?
HIGH CONFIDENCE ON INDONESIA
TRUST OF INDONESIAN CITIZENS TO THE
GOVERNMENT IS AT ALL TIME HIGH
INVESTORS WILLINGNESS TO INCREASE
INVESTMENTS PLACED INDONESIA AS 3rd in ASIA
Source: Asia Business Outlook Survey 2017, The Economist Corporate Network 2017

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WHY NOW?
COMPETITIVENESS AND REGULATORY ENVIRONMENT
(Rank) 2014 2015 2016 2017
Singapore 1 3↓ 2↑ 2 -
Malaysia 17 22↓ 23↓ 24↓
Thailand 46 46 - 46- 26 ↑
Indonesia 120 106 ↑ 91 ↑ 72 ↑
Viet Nam 93 91 ↑ 82 ↑ 68 ↑
(Rank) 2014 2015 2016 2017
Singapore 2 2 - 2 - 3 ↓
Malaysia 20 18 ↑ 25 ↓ 23 ↑
Thailand 31 32 ↓ 34 ↓ 32 ↑
Indonesia 34 37 ↓ 41 ↓ 36 ↑
Viet Nam 68 56 ↑ 60 ↓ 55 ↑
EASE OF DOING BUSINESS
GLOBAL COMPETITIVENESS RANK
2019
40
Source: World Economic Forum 2017, World Bank 2017

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WHY NOW?
ICT POLICIES UPDATE
DEVICES NETWORKS APPLICATIONS
▪ Domestic component
requirements
▪ Certification process for mobile,
handheld and tablet computers
▪ Affirmative policy to ensure
universal access of
telecommunication
▪ Business Classification: Digital
Platform
▪ Safe Harbor
▪ Revision of GR 82/2012: Data
localization
▪ Over the Top Service
▪ Next Indonesia Unicorn

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WHY NOW?
PRESIDENTIAL DECREE NO.74/2017: INDONESIA DIGITAL ECONOMY ROADMAP
31 INITIATIVES TO BE COMPLETED IN 1-YEAR-TIME
Source: Kominfo 2017

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Thank You

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SUPPLEMENT 1
PALAPA RING
Source: Kominfo 2017

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SUPPLEMENT 2
INCENTIVES AT SPECIAL ECONOMIC ZONES
1. Income Tax (PPh)
a. Main activity:
▪ > Rp 1 T investment : 20-100% reduction of PPh for 10-25 years
▪ Rp 500 B- 1 T investment: 20-100% reduction of PPh for 10-15 years
▪ <Rp 500 M investment: 20-100% reduction of PPh for 5-15 years for special activity
2. Value Added Tax and Sales Tax on Luxury Goods (PPN and PPnBM)
▪ Import: not imposed
▪ Transaction between entities in Special Economic Zone: not imposed
▪ Transaction between entities in different Special Economic Zone: not imposed
3. Custom and Duties
▪ Import: free custom and postponed import duties
▪ From Special Economic Zone to domestic market: import duties follows the prefential tariff based on domestic components
4. Property ownership (Special Economic Zone for Tourism
▪ Free of PPnBM and PPn for luxurious goods
▪ Foreigners/foreign business entities can own property built on land based on agreement with rights holder of the land
5. Main Activity in Tourism
• Qualify for Local Tax reduction
• Qualify for Local Retribution reduction
b. Outside of main activity (Tax allowance)
▪ 30% reduction of net income for 6 years
▪ Earlier depreciation and amortization
▪ 10% PPh dividend paid to foreign tax payer (WPLN)
▪ Compensation for losses 5-10 years
Source: Coordinating Ministry for Economic Affairs 2017

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17 Source: Bank Indonesia, 2017, Bloomberg 2017
“More upgrades are possible, with Fitch and Moody’s
potentially moving Indonesia up the scale further into
investment grade. All these may be a cause for a raucous
celebration, but also quiet reflection. Tough reforms got
Indonesia to this point. ”
- Wellian Wiranto, Oversea-Chinese Banking Corp.
“This is a well-deserved upgrade thanks to its prioritization of
fiscal sustainability at the expense of growth in 2016,”
- Trinh Nguyen, Natixis SA Hong Kong
CREDIT RATING AS JULY 2017
THE INVESTMENT GRADES WERE HARD EARNED THROUGH
SERIOUS REFORM BY THE GOVERNMENT
SUPPLEMENT 3
INVESTMENT GRADE BY MAJOR RATING FIRMS

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SUPPLEMENT 4
INVESTORS’ CONFIDENCE
Source: BKPM, 2017
GROWTH OF GDP CONTRIBUTION IS OBSERVED ACROSS
ALL TOP SECTORS (in USD b, YoY growth 2016)
CONSISTENT INCREASE IN INVESTMENTS IN THE PAST
THREE YEARS
4.3%
3.3%
3.9%
5.2%
1.1%
7.7%
8.9%
3.2%
8.9%
3.8%

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19Source: Kominfo 2017

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