Chinese businesses in Indonesia cite investment hurdles

Several ministers in Jakarta have pushed back, saying Indonesia must prioritise sovereignty over its natural resources, while stressing the government remains open to dialogue and has postponed some planned increases in mining taxes and royalties.

The China Chamber of Commerce in Indonesia (CCCI) raised its concerns in a letter to Prabowo listing six main issues it said were hampering foreign investment: sharp tax and levy increases, planned mandatory foreign exchange retention requirements, reduced nickel ore quotas, excessive forestry law enforcement, suspension of major projects and increased scrutiny of work visas.

Established in 2005, the chamber has over 260 members from diverse sectors, including energy, minerals, transport, finance, insurance, electronic information, machinery, chemical, contracting and trade, according to its website.

“Law enforcement standards in taxation, environmental protection, forestry and other areas are opaque and grant excessive discretionary power,” said the undated and unsigned letter in English, which was seen by This Week in Asia.

“Meanwhile, when enterprises encounter difficulties, normal appeal channels are blocked, relevant departments shirk responsibilities and delay responses, and some issues can only be resolved through third-party intermediaries charging exorbitant fees.

“These circumstances not only increase operational risks for enterprises but also severely damage Indonesia’s fair, transparent and rules-based business environment and international profile.”