07
Apr
2009

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Why Invest in Batam? PDF Print E-mail
As at the end of December 2001, Batam has accumulated a total of approximately US$ 8.8 billion in investment comprising of US$ 2.1 billion (24%) of government investment and US$ 6.7 billion (76%) of private investment. Government investment is in terms of infrastructure development. Private investment comprises further of 49% or US$ 3.3 billion of domestic investment and 51% or US$ 3.4 billion of foreign investment. More than 531 foreign companies are operating in Batam while the number of local companies is nearly 9,700.

Industrial facilities are abundantly available. Investors can choose whether to plug into a commercially ready-to-use factory building with complete infrastructure and facilities or to acquire a lot to custom-build its factory. Erecting a 1,000 sq.-m factory building on a 2,000 sq.-m lot would cost only around US$ 200,000, including the cost of acquiring land. There are 14 (fourteen) industrial estates offering their facilities ranging from ready-to-build lot parcels to buildings with complete facilities. Some industrial estates also offer a complete package which includes the processing of permits and licenses to relevant authorities and recruitment of labor. Housing for labor in dormitories is also provided within the industrial estate.

There are approximately 520,000 people living in Batam, coming from all over the Indonesian archipelago with 165,000 people employed in the formal sector, and 70,000 more in the informal sector. This labor is increasingly bettered skilled as they have years of training and experience. This skilled labor can be sourced directly in Batam, without the need of recruiting from other regions, such as Java and Sumatra. Half of the population in Batam are workers, making a very healthy dependency ratio.
 
Foreign investment application is processed with a onestop policy in Batam and takes not more than 20 days to get approval. All permits and licenses required to start development are also processed "under one roof" by the Batam Industrial Development Authority with streamlined procedures. Companies are allowed to have 100% foreign ownership. Staying permit for foreigners working in Batam is easy to obtain from the local Immigration Office. Foreign visitors to Batam will be given Visa on Arrival for most nationalities. Foreign nationals are allowed to buy and own houses, including shop-houses, whether or not they work in Batam. So, Batam could become a second home for foreigners.

All of these things reflect the commitment of the Indonesian government to fully support the development of Batam. Private sector involvement with strong support by the government is among the ingredients to have a successful development.
 

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