On 2 February 2021, the Government issued new regulations relating to the Administration of Special Economic Zones (the Regulations)* In Indonesia, special economic zones (SEZ) are areas in Indonesia designated for activities that have a high economic value, such as industrial activities, import and export, etc.

The new Regulations broaden the previous definition of SEZ to include the service sector and businesses that deal with foreign exchange or improve the balance of trade. The new Regulations also cut through bureaucratic government procedures to streamline administration of businesses included in SEZ.

The Regulations introduce the possibility that SEZ may be established across more than one province as well as introducing procedures for converting other types of economic zones, such as Free Trade Areas and Free Ports to SEZ. The Regulations also set out provisions to ensure that land used for SEZ will be legally set aside for that purpose, allowing businesses certainty when setting up in SEZ and stimulating confidence in the SEZ programme.

These Regulations have been issued in accordance with provisions in the Omnibus Law and will take effect on 2 February 2021, revoking all previous regulations on the topic.

*Government Regulations No. 40 of 2021 regarding Administration of Special Economic Zones.