The Aceh administration, which is strongly committed to simplifying regulations, recently issued Qanun Aceh (Bylaw) No. 5/2018 on investment. The investment-friendly bylaw replaced bylaws No. 4/2013 and No. 5/2009.

“The bylaw has to be continuously adjusted to the dynamics of the latest regulations and to the growing demand in the increased competitiveness that Aceh faces,” said Aceh Investment Office head Aulia Sofyan.

Bylaw No. 5/2018 addresses key issues faced by investors who want to open a business in Aceh. The issues include uncomplicated business permit procedures, land availability, tax incentives, protection of investment and repatriation.

Bylaw No. 5/2018 is the first-ever regulation on investment to be aligned with Government Regulation No. 24/2018 on Electronic Business Integrated Service (PPBTSE) or the Online Single Submission (OSS) system, according to Aulia.

Under the new bylaw, business permit procedures in Aceh have been simplified. The entire process of obtaining a permit, starting from document submission, signing of the document to permit issuance, is conducted at the local investment office with its One-Stop Integrated Services (PTSP).

The new Aceh bylaw also favors existing and new investors in terms of tax. Under the new policy, the Aceh administration grants tax incentives of a maximum 60 percent, given in the form of a tax reduction. The tax incentive facility is applied in areas across Aceh province, including in its special economic zone (SEZ).

In line with the local administration’s vision of developing micro, small and medium enterprises (UMKM), priority regarding the tax incentive is given to UMKM that operate in the SEZ. “The Aceh administration is currently preparing technical guidelines on the gubernatorial regulation in more detail,” he says.

In the event of an investor being confronted with a land clearance issue, the Aceh administration is ready to help the investor solve the problem by involving local authorities to find a win-win solution. Presidential Regulation No. 62/2018 on the handling of social impacts related to the availability of land for national development helps provincial administrations expedite land clearance in the interest of national development.

“Thanks to the new bylaw, Aceh SEZ in Arun Lhoksumawe, Ladong Industrial Park and Lampulo Fishery Industrial Park have started to show their respective appeal as investment destinations.”

Arun SEZ was officially inaugurated by President Joko Widodo on Dec. 14, 2018.

“Hopefully, SEZ Arun Lhoksumawe can attract an investment of approximately Rp 51 trillion and absorb 40,000 workers over the next 10 years,” says Aulia.

Arun Lhoksumawe SEZ offers business opportunities for investors who have a keen interest in energy, petrochemicals, logistics or timber processing, according to Aulia.

For investors interested in doing business beyond Arun Lhoksumawe, there are areas that they can choose: infrastructure, agro-industry and tourism.

Ensuring doing business securely also needs the support of other stakeholders, particularly locals. Therefore, the Aceh administration continues to raise awareness among locals living close to the companies about the importance of any incoming investment.

“Local people’s support for incoming investment means providing new job opportunities and reducing poverty,” Aulia says.

Investors have the freedom to decide on whether or not to do business in a region. They have their own considerations. But thanks to the issuance of the revised bylaw on investment, which is investment friendly, Aceh is surely an attractive investment destination to consider. 

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