Investors in Nusantara Smart City can access some of Indonesia’s most extensive fiscal facilities — including corporate income tax holidays, import duty exemptions, and special deductions established under Government Regulation No. 12 of 2023 — with eligibility confirmed through official channels such as the Nusantara Capital City Authority (OIKN), the OSS licensing system, and the Directorate General of Taxes. This page summarizes the incentive landscape in plain English for international investors. It is informational only: it is not tax advice, and every figure or facility mentioned here should be verified against current official regulations before it enters a financial model.
Why Does Nusantara Have Its Own Incentive Regime?
Nusantara was established as Indonesia’s new capital by Law No. 3 of 2022, and the government has repeatedly stated that most of the city’s development cost is expected to come from non-state sources. To attract that private capital to a greenfield city in East Kalimantan — rather than to established markets like Jakarta or Surabaya — the government issued a dedicated fiscal package for the capital region. The result is an incentive regime deliberately more generous than the standard national menu, covering income tax, import facilities, and sector-specific deductions for activities located inside the Nusantara area.
What Tax Incentives Are Available in Nusantara Smart City?
Government Regulation No. 12 of 2023 is the anchor regulation for investment facilities in the capital, and it groups incentives around the kinds of activity the city needs most. The headline categories that investors typically examine are:
- Corporate income tax holidays for investments in infrastructure, public services, and economic-generator sectors located in Nusantara.
- Reduced-tax or final-tax arrangements aimed at financial-sector activities associated with the planned financial center concept.
- Super deductions for qualifying spending on research and development, vocational training, and certain donations supporting city development.
- Import-related facilities, such as exemptions on duties for capital goods and materials used in building the city.
- Employment-related income tax facilities for eligible workers based in the capital region.
Each category carries its own qualification tests, minimum investment thresholds, and application procedures, all of which are defined in the underlying regulations rather than in marketing materials.
How Long Can a Nusantara Tax Holiday Last?
The most cited feature of the Nusantara package is duration: qualifying infrastructure and public-service investments can be eligible for corporate income tax holidays of up to 30 years, a horizon substantially longer than the facilities available in most other Indonesian locations. The exact length depends on the sector, the investment value, and when the investment is realized, with earlier commitments generally treated more favorably than later ones. Because these parameters are set by regulation and can be amended, investors should confirm the current sector list and applicable holiday periods with the Directorate General of Taxes and OIKN at the time of application.
Who Qualifies for the Incentives?
Eligibility is tied to where the activity happens and what the activity is: facilities generally apply to taxpayers investing within the Nusantara capital region and, in some categories, its designated partner zones. Both domestic and foreign-owned Indonesian entities can apply, which means an international group would typically qualify through its locally registered company rather than directly from offshore. Sector matters as much as location — the regulation distinguishes infrastructure and public services from economic generators such as hotels, malls, and offices, and from softer categories like education, healthcare, research, and financial services. If your entry route is still undecided, our guide to foreign investment in Nusantara Smart City explains the common ownership structures first.
What Non-Tax Incentives Support Investors?
Beyond the fiscal menu, the Nusantara framework includes non-tax facilities designed to reduce long-horizon uncertainty, and land tenure is the clearest example: regulations for the capital allow land-use rights to be granted in extended cycles that can be committed up front, giving investors more visibility than standard arrangements elsewhere. Immigration facilities for investors and key personnel, streamlined licensing coordination through OIKN, and priority treatment for projects aligned with the masterplan round out the package. As with the tax side, the operative details sit in regulations and implementing rules that are updated periodically, so current terms should be confirmed before they are relied upon.
Nusantara Incentives at a Glance
| Incentive type | What it covers | Where to verify |
|---|---|---|
| Corporate tax holiday | Income tax relief for qualifying sectors, up to 30 years for some categories | Directorate General of Taxes, OIKN |
| Super deductions | Enhanced deductions for R&D, training, and qualifying contributions | Ministry of Finance regulations |
| Import facilities | Duty exemptions for capital goods and construction materials | Customs authority, OSS system |
| Employee income tax facility | Facilities for eligible workers based in the capital region | Directorate General of Taxes |
| Land and licensing support | Extended land-right cycles and coordinated permits | OIKN, land office |
How Do You Apply for Nusantara Tax Incentives?
Applications flow through Indonesia’s OSS (Online Single Submission) licensing platform, coordinated with OIKN and the Ministry of Finance, and they are tied to a registered Indonesian entity with a defined investment plan. In practice the sequence is: establish or designate the investing entity, obtain its business identification through OSS, then apply for the specific facility with supporting documents showing the investment value, sector classification, and location inside the capital region. Investors who have not yet incorporated can start with our step-by-step page on how to start a company in Nusantara Capital City. Projects entering through government partnership schemes should also review how incentives interact with PPP projects in Nusantara Smart City, since support instruments differ between direct investment and concession models.
Frequently Asked Questions
How long can a tax holiday last in Nusantara?
Under Government Regulation No. 12 of 2023, qualifying investments in Nusantara can receive corporate income tax holidays far longer than the standard national facilities, with some infrastructure and public-service categories eligible for up to 30 years. The exact duration depends on sector, investment value, and timing, so confirm the applicable period with the Directorate General of Taxes and OIKN before relying on it in projections.
Do Nusantara incentives apply to foreign-owned companies?
Yes, in general the facilities target taxpayers investing in the capital region regardless of whether their shareholders are Indonesian or foreign, provided the investing vehicle is a properly registered Indonesian entity operating in an eligible sector. Foreign groups typically qualify through a locally incorporated subsidiary. Sector-specific ownership rules still apply separately, so entity structuring and incentive eligibility should be checked together through official channels.
Are there incentives beyond corporate income tax?
Yes. The Nusantara package includes super deductions for research, vocational training, and qualifying contributions, import duty facilities for capital goods and construction materials, income tax facilities for eligible employees based in the region, and non-tax support such as extended land-right cycles and coordinated licensing. Each facility has its own rules and application path, documented in Ministry of Finance and OIKN regulations.
Where do investors apply for Nusantara tax incentives?
Applications are made through Indonesia’s OSS licensing platform and coordinated with OIKN and the Ministry of Finance, based on a registered Indonesian entity with a defined investment plan. Supporting documents typically cover investment value, sector classification, and project location inside the capital region. Because procedures and forms are updated periodically, follow the current guidance published by the official agencies rather than third-party summaries.
Plan Your Incentive Strategy
Nusantara Smart City Hub helps international investors frame the right questions before they engage tax counsel and official agencies. Share your sector and investment stage via WhatsApp at +62 811-3941-4563 or email bd@juaraholding.com, and we will outline which facilities are worth investigating for your project. This service is informational and does not replace advice from licensed tax professionals.