Industry Minister Supports Vietnam to Strengthen its Investment in Indonesia

TEMPO.CO, Jakarta - Indonesia's Industry Minister Agus Gumiwang Kartasasmita encourages Vietnam to strengthen investment in Indonesia following the cooperation agreement reached during President Joko Widodo's (Jokowi's) visit to the country.

At a bilateral meeting between President Jokowi and Vietnamese President Vo Van Thuong, on Friday (January 12) in Vietnam, the two leaders agreed on several collaborations, including increasing new trade targets.

"In addition, Indonesia and Vietnam have agreed to work together in the electric car and battery ecosystem as well as the energy transition," the minister noted in a statement issued by his office on Saturday.

He also stated that President Jokowi welcomed VinFast's investment commitment to build an electric car and battery ecosystem in Indonesia.

VinFast is an automotive manufacturer from Vietnam that plans to invest US$1.2 billion to produce electric vehicles in Indonesia.

"President Jokowi believes that investment from Vietnam will receive convenience and good protection. Therefore, he encourages Vietnamese companies to invest in Indonesia," Kartasasmita remarked.

Earlier, on January 11, he also met with VinFast officials who expressed their interest in building a factory in Indonesia.

Kartasasmita said the company may receive facilities, such as tax holidays, tax allowances, import duty incentives, as well as Luxury Goods Sales Tax (PPnBM) incentives.

The company can conduct market tests with imported completely built-up (CBU) vehicles by utilizing the zero percent import duty tax facility and zero percent luxury goods tax in accordance with Minister of Investment Regulation Number 6 of 2023.

At the production stage, companies can also make the most of the zero percent tariff facility for the Completely Knock Down (CKD) or Incompletely Knock Down (IKD) import scheme that is regulated in Minister of Industry Regulation Number 29 of 2023.

"Moreover, the zero percent Luxury Goods Tax facility can also be utilized if it reaches the minimum requirement for local content as mandated by Presidential Regulation Number 79 of 2023," the minister explained.

According to Kartasasmita, the two countries also encourage cooperation in technology, information, and communication to encourage the progress of digital industries.

In addition, Indonesia and Vietnam agreed to strengthen cooperation in the agriculture and fisheries sector with the signing of a memorandum of understanding (MoU) on fisheries cooperation to encourage collaboration and investment between the two countries.

President Jokowi also stated that Indonesia and Vietnam are committed to maintaining regional economic stability and growth through concrete implementation of the ASEAN Outlook on the Indo-Pacific and support for Laos' chairmanship of ASEAN this year.

ANTARA

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