As one of the most populated countries in the world, Indonesia is facing an increasing demand in the energy sector. The energy consumption level has expanded by 6% in the last several years and in the near future, the increase of conventional energy level is expected to grow by 3% on an annual basis. This is because the Indonesian government is currently working on new laws which provide for the promotion of renewable energy production.
If you want to start a business in the energy sector in Indonesia, our local consultants will guide you through the procedure.
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Business licensing for energy companies in Indonesia
Foreign investors are allowed to operate in the energy sector by opening limited liability companies with foreign ownership (PT PMA). In order to do that, they need to submit an investment plan with the Investment Coordinating Board and then apply for an energy supply business license. Then, the company must register with the Ministry of National Development Planning.
The company registration procedure of an energy company does not imply any special procedure and can be completed by our Indonesia company incorporation agents.
Investors who wish to immigrate to Indonesia can find out more about the process from our immigration specialists.
Types of energy sources in Indonesia
In until 2016, Indonesia relied on electricity as a main source of energy for private and commercial consumers, since the government started working on the Accelerated Development of Electricity Generation Plan, Indonesian companies can take advantage of the following sources to generate energy:
- coal, natural gas, and oil which are expected to decrease in usage by 2026;
- hydropower which is currently the largest energy source used by local companies;
- solar power panels which represent the third most employed source for energy production, at the moment;
- geothermal sources – Indonesia is the second-largest country in the world in terms of geothermal resources;
- bioenergy and wind which are currently the less explored energy sources.
The Ministry of Finance has also set in place several tax incentives, grants, and subsidies for companies submitting power projects.
If you are interested in setting up a company in the energy sector in Indonesia, do not hesitate to contact us for assistance in incorporating the business.
Opening a business can be an opportunity to immigrate to Indonesia. Our agents can give you more details as needed.