The Investment Coordinating Board, known as BKPM, expects foreign and local investment to reach Rp 600 trillion ($44 billion) next year, on the back of government tax incentives easing manufacturing investment in special economic zones.
Investment — excluding oil and gas and the banking sectors — is expected to reach Rp 600 trillion next year, up from an estimated Rp 519 trillion this year, Tamba Hutapea, deputy of investment planning at the board, said.
"BKPM has launched incentives to make it easier for investing in Indonesia," Tamba said on Tuesday.
Indonesia launched a three-hour business license service last month for big investors — defined as those bringing in Rp 100 billion in investment and hiring over 1,000 workers.
Foreigns will be allowed to manage industrial zones and own property within the zone, under another government initiative.
"A few investors that came to BKPM have started comparing industrial estates in Indonesia to counterparts overseas," Franky Sibarani, BKPM chairman, said.
According to Franky, investors often compare Indonesia to Vietnam, a fellow member of the Association of Southeast Asian Nations (Asean), which has been more successful in transitioning into a manufacturing based economy compared to Indonesia's commodity-driven economy.
"The development of industrial estates as logistic solutions will improve the country's competitiveness as an investment destination," Franky said.
Investment realization in the country has reached Rp 400 trillion in the first nine months of 2015 or around 77 percent of its target of Rp 519.5 trillion, according to the BKPM.