Information, not advice: Bali SEZ Intelligence is an independent editorial guide — not a government body, zone operator, or licensed adviser. Incentives and regulations change and apply case-by-case; verify with the OSS system, official KEK channels, and licensed Indonesian counsel before acting. If you engage a partner we introduce, that partner may pay us a referral fee at no cost to you.
KEK regulations in Indonesia rest on a single base statute — UU No. 39 Tahun 2009 tentang Kawasan Ekonomi Khusus — and a chain of amendments, implementing regulations, and zone-designation decrees that has been revised three times since the Omnibus Law in 2020. If you are mapping the legal architecture before deciding whether to enter KEK Kura Kura Bali or KEK Sanur, this page traces every layer: the statute, the Cipta Kerja amendment chain, the main implementing regulation (PP 40/2021), the two Bali zone-designation PPs, the fiscal PMKs, the OSS licensing framework, and the governance structure including the Dewan Nasional KEK. Primary texts link to peraturan.bpk.go.id where available.
Layer 1: The Base Statute — UU 39/2009
Undang-Undang No. 39 Tahun 2009 established the KEK framework from scratch. It defined what a kawasan ekonomi khusus is, created the Dewan Nasional KEK and zone-level Administrator, set out the categories of permissible activities, and authorised the fiscal and non-fiscal facility regime. Everything downstream — every PP, every PMK, every zone designation — derives authority from this law.
The original law allowed six activity categories inside a KEK: export processing, logistics, industry, technology development, tourism, and energy. Each zone-designation PP specifies which of those apply. For KEK Kura Kura Bali (PP 23/2023), the formal categories are pariwisata and industri kreatif. For KEK Sanur (PP 41/2022), they are kesehatan and pariwisata.
One practical implication: the formal sectors in the designation PP control which incentives and licensing pathways are available. Master-plan marketing language — “tech park,” “international financial centre” — describes development ambitions, not legally designated activity categories. Investors in sectors tangential to the PP-designated activities should verify their KBLI classification with the Administrator KEK before assuming full incentive eligibility.
Layer 2: The Cipta Kerja Amendment Chain
The Omnibus Law restructured KEK regulations in Indonesia substantially. The amendment chain has three stages:
- UU No. 11 Tahun 2020 — Cipta Kerja (Job Creation Law)
- Passed 5 November 2020; amended dozens of sectoral laws including UU 39/2009. Simplified zone establishment procedures, introduced the OSS-RBA licensing framework, cut minimum paid-up capital requirements for PT PMA to IDR 10 billion per five-digit KBLI (excluding land and buildings), and strengthened the Administrator KEK one-stop-service mandate.
- Peraturan Pemerintah Pengganti Undang-Undang No. 2 Tahun 2022 — Perppu Cipta Kerja
- Issued 30 December 2022 after the Constitutional Court ruled the original law procedurally defective. Re-enacted essentially the same substantive provisions. Validated the implementing regulations already in force.
- UU No. 6 Tahun 2023 — Penetapan Perppu 2/2022 menjadi Undang-Undang
- Parliament ratified the Perppu on 31 March 2023, converting it into permanent statute. UU 6/2023 is now the current governing text. References you see to “UU Cipta Kerja” in post-2023 documents point here.
The practical consequence for investors: peraturan kek terbaru refers to this chain. Any agency guide citing only “UU 11/2020” is working from a superseded reference. The substantive rules largely carried over, but the UU 6/2023 reference is the one to use in legal documents and licensing applications.
Layer 3: PP No. 40 Tahun 2021 — Penyelenggaraan KEK
This is the central implementing regulation — the one practitioners mean when they say “pp 40 2021 kek.” It runs to over 100 articles and governs almost everything that happens inside a KEK operationally: establishment procedures, the role and duties of the Badan Usaha Pembangun dan Pengelola (BUPP, the developer-manager), the Administrator KEK structure, licensing by the Administrator via OSS, incentive frameworks, monitoring and evaluation criteria, and the revocation mechanism.
Three articles that investors encounter most often in practice:
- Article 32 — sets out the one-stop licensing mandate: the Administrator KEK is the single point for all permits and approvals needed by a pelaku usaha (business actor/tenant), integrating OSS-RBA outputs with zone-specific checks.
- Article 83 — the fiscal facilities article, authorising the PPN-not-collected treatment, customs and excise exemptions, and local-tax reductions; references the PMK-level details.
- Article 100 — regional government obligation to issue local regulations (Perda) granting 50–100% reductions on regional taxes and levies including BPHTB and PBB inside KEK areas.
PP 40/2021 also introduced the periodic evaluation framework that allows Dewan Nasional KEK to flag underperforming zones and, in serious cases, recommend revocation — more on that in the governance section below.
Layer 4: Zone-Designation PPs for Bali’s Two SEZs
Each KEK is established by a separate Presidential Regulation (Peraturan Pemerintah). These set the exact perimeter, appoint or authorise the BUPP, specify formal activity sectors, and fix the obligation timeline for when the zone must be operational.
PP No. 41 Tahun 2022 — KEK Sanur
Signed 1 November 2022. Establishes KEK Sanur on 41.26 ha in Denpasar Selatan, using the existing Grand Inna Bali Beach site as its core. Formal sectors: kesehatan (health/medical tourism) and pariwisata. The health cluster is anchored by the Bali International Hospital (BIH) operated by PT Pertamina Bina Medika IHC, with a Mayo Clinic collaboration announced at the December 2021 groundbreaking; the operational scope of that collaboration has not been documented in publicly available official texts, so we characterise it as announced rather than detailed.
Official investment target figures show a discrepancy worth flagging. Kemenko Perekonomian releases cite IDR 10.2 trillion investment and 43,647 jobs (direct + indirect) to 2045, plus IDR 86 trillion in cumulative forex savings and IDR 19.6 trillion in new forex. The kek.go.id zone-profile page lists different numbers: IDR 6.2 trillion and 18,375 jobs. Both are official sources. We publish both; readers relying on these targets for financial modelling should verify at the primary kek.go.id profile and the Kemenko Perekonomian release.
On realized progress: by the time PP 41/2022 was issued, groundbreaking had already taken place (December 2021 under Jokowi). Cumulative realized investment reached IDR 5.37 trillion with 5,444 workers employed as of mid-2024 figures — substantially ahead of Kura Kura in percentage terms, though both zones are early relative to 20-year targets.
Full text: peraturan.bpk.go.id/Details/230500.
PP No. 23 Tahun 2023 — KEK Kura Kura Bali
Signed 5 April 2023. Establishes KEK Kura Kura on 498 ha at Pulau Serangan, Denpasar Selatan. Formal sectors: pariwisata and industri kreatif. Developer-manager (BUPP): PT Bali Turtle Island Development (BTID). The PP set a 36-month operational readiness obligation, placing the deadline at approximately April 2026.
Official targets: IDR 89.9 trillion investment at kek.go.id; some official statements put the total longer-range figure at IDR 104–104.4 trillion by approximately 2052. The first-five-year target is IDR 12 trillion. Realized investment as of April 2026 is reported at approximately IDR 1.62 trillion — roughly 1.5% of the long-range target and about 13.5% of the five-year target. That figure comes from a single secondary source (balibusinessnews.com, June 2026); we have not verified it against a kek.go.id primary release. Government data from Kemenparirekraf shows IDR 260.96 billion realized in H1 2025, representing 14.53% of the 2025 annual investment target.
Full text: peraturan.bpk.go.id/Details/246940.
Layer 5: Fiscal PMKs — Tax Holidays and Allowances
The KEK fiscal framework is detailed in two Ministerial of Finance regulations that together constitute the current operative fiscal rules:
- PMK No. 237/PMK.010/2020 jo. PMK No. 33/PMK.010/2021
- The primary KEK fiscal incentive regulation and its amendment. Establishes the CIT tax-holiday tiers, the tax-allowance alternative, the PPN-not-collected rules, customs treatment, and excise facilities. This is the document an investor’s tax adviser should read before structuring an entry.
Tax-holiday tiers for kegiatan utama (main/core activities) under this PMK:
| Investment Value (IDR) | Holiday Period (100% CIT reduction) | Tail Period (50% CIT reduction) |
|---|---|---|
| 100 bn – <500 bn | 10 years | 2 years |
| 500 bn – <1 tn | 15 years | 2 years |
| ≥ 1 trillion (IDR) | 20 years | 2 years |
The floor is IDR 100 billion. Projects below that floor — or those not classified as kegiatan utama — default to the tax allowance track: a 30% investment deduction applied over six years at 5% per year, accelerated depreciation, 10% withholding tax on dividends to non-residents (or treaty rate), and a ten-year loss carry-forward. The post-holiday standard CIT rate is 22%.
Indirect tax treatment inside KEK: PPN and PPnBM are tidak dipungut (not collected) on imports and on deliveries from the domestic customs area into the zone, covering capital goods, machinery, raw materials, and land or building acquisitions within the zone. Import duty is exempt or suspended; PPh 22 import is not collected; excise is waived or suspended on qualifying goods. When goods exit the zone into the domestic market, normal customs treatment applies.
Regional taxes: Under PP 40/2021 Article 100, provincial and city governments must issue Perda granting 50–100% reductions on local taxes and levies including BPHTB (land-and-building acquisition tax) and PBB (property tax) for zone occupants.
PMK 136/2024 — Global Minimum Tax Caveat
Effective 9 October 2024, Indonesia enacted PMK 136/2024, introducing a Qualified Domestic Minimum Top-up Tax (QDMTT) aligned with the OECD Pillar Two framework. Multinational enterprise groups with global consolidated revenues above EUR 750 million are subject to a 15% minimum effective tax rate. For in-scope MNEs already holding KEK tax-holiday positions, the domestic top-up tax can recover some or all of the holiday benefit through the QDMTT mechanism. Indonesia has introduced a Qualified Refundable Tax Credit (QRTC) as a GMT-compatible alternative to the straight holiday. The KEK holiday rules remain formally in force under PMK 237/2020 jo 33/2021 — the Pillar Two caveat applies structurally to MNEs above the revenue threshold, not to smaller investors or domestic groups.
Layer 6: OSS Framework — PP 5/2021
PP No. 5 Tahun 2021 on risk-based licensing (Perizinan Berusaha Berbasis Risiko, OSS-RBA) is the plumbing beneath the Administrator KEK one-stop service. Under OSS-RBA, a new business selects its KBLI code, declares its risk level, and receives its Nomor Induk Berusaha (NIB) — the master business ID — automatically from the system. Higher-risk activities get routed for sectoral verification; some KEK-specific licensing is handled by the Administrator, not a central ministry.
For a pelaku usaha entering KEK Kura Kura or Sanur, the practical sequence runs: PT PMA incorporation → NIB via OSS selecting KEK location → registration and LOI screening with Administrator KEK → space/land agreement with BUPP → fiscal facility application filed via OSS before commercial operation commences → customs registration if using import facilities. End-to-end to a fully facility-enabled status typically runs six to twelve months; the NIB and basic corporate registration are achievable in days to weeks.
Layer 7: Land Rights — PP 18/2021
PP No. 18 Tahun 2021 implemented the Cipta Kerja land-rights restructuring. The standard Hak Guna Bangunan (HGB) now runs on a 30 + 20 + 30-year cycle, totalling up to 80 years across renewals. Hak Pakai follows a comparable structure for eligible right-holders.
An important nuance for anyone reading agency copy about “80-year grants in one tranche”: that upfront consolidated grant is the regime at IKN (the new capital, governed by PP 12/2023 jo PP 29/2024), not KEK. Inside KEK, the 30+20+30 cycle applies. The land is still held for up to 80 years in total, but through successive renewal stages rather than a single grant. Foreign individuals cannot hold HGB directly; the standard route is a PT PMA company holding HGB, or Hak Pakai for those qualifying as individuals under the relevant regulation.
Inside KEK, developers may establish estate regulations that stand in for individual building permits for tenant buildings within a developer-approved master plan — a streamlining provision in PP 40/2021 that reduces the per-building PBG (building permit) burden for certain structures within the zone.
Mapping your entry? use our enquiry form or reach us on WhatsApp to connect with a vetted KEK licensing adviser. We match investors to specialists based on sector, investment scale, and zone — at no extra cost to you. If you proceed with a partner through our referral, they may pay us a fee.
Governance: Dewan Nasional KEK and the Evaluation Cycle
The Dewan Nasional KEK (National KEK Council) is chaired by the Coordinating Minister for Economic Affairs (Kemenko Perekonomian) and includes representation from relevant sector ministries. Its functions under UU 39/2009 and PP 40/2021 include: approving new zone proposals, monitoring zone performance against investment and employment targets, conducting periodic evaluations, and recommending revocation to the President where a zone repeatedly fails to meet its obligations.
The evaluation framework is not ceremonial. PP 40/2021 provides a mechanism under which Dewan Nasional can recommend withdrawal of KEK status after a formal evaluation finding. Several zones nationally have been publicly flagged as underperforming in official statements. We do not name specific revoked zones or cite revocation PP numbers here because we have not verified those references against JDIH or peraturan.bpk.go.id; anyone tracking this for due diligence should check the JDIH database directly. What is verifiable: the revocation framework exists and has been used.
For Bali’s two zones, Dewan Nasional approved the Sanur proposal on 22 July 2022 before PP 41/2022 was issued. Kura Kura followed with PP 23/2023 on 5 April 2023 after the Dewan Nasional recommendation. Both zones are under the standard monitoring and evaluation cycle. PP 23/2023 imposed a 36-month operational readiness deadline on BTID (approximately April 2026), a milestone that is now subject to evaluation by the Council.
National aggregate performance figures give context: mid-2024 Dewan Nasional data cited 22 operating KEKs, 368 pelaku usaha, IDR 205.2 trillion cumulative investment, and 132,227 workers. A later October 2024 government statement cited 24 KEKs and IDR 68.43 trillion in new investment for January–Q3 2024 alone. There is no single authoritative real-time figure; the safest framing is “two dozen-plus zones nationally, with IDR 200+ trillion realized since the framework launched in 2010.”
Comparison: KEK vs Other Indonesian Zone Types
| Regime | Governing Law | CIT Holiday? | Customs Treatment | Foreign Ownership |
|---|---|---|---|---|
| KEK | UU 39/2009 jo UU 6/2023; PP 40/2021 | Yes — 10/15/20 yrs + 2-yr tail | Import duty exempt/suspended; PPN not collected | Via PT PMA; no negative list applies |
| Kawasan Industri | PP 142/2015 | Tax allowance only (standard) | Standard, with some bonded-zone options | Positive Investment List applies |
| Kawasan Berikat (Bonded Zone) | PP 85/2015 | No CIT holiday; customs suspension | Duty suspension on inputs, duty on domestic exit | Standard PT PMA rules |
| Kawasan Perdagangan Bebas / FTZ | UU 44/2007 (Batam etc.) | Limited; zone-specific rules | Duty-free zone; PPN tidak dipungut | Special regime per zone |
The KEK regime is the most comprehensive in terms of combined fiscal, non-fiscal, and licensing benefits. Its distinguishing features versus a standard industrial estate are: the CIT tax holiday (not just allowance), the PPN-not-collected treatment, the no-negative-list foreign ownership principle, and the Administrator KEK one-stop licensing that integrates OSS with zone-level approvals.
Candid Assessment: What the Legal Framework Guarantees — and What It Does Not
The statutory and regulatory framework is substantive. UU 39/2009 as amended by UU 6/2023, PP 40/2021, the zone PPs, and the PMK fiscal rules are well-established and have been applied across more than two dozen zones since 2010. For investors, the legal foundations are solid.
Three caveats that a complete legal map must include:
- Framework vs. practice gap at zone level. The incentives are real but require affirmative application — they are not automatic on entry. Fiscal facilities must be applied for via OSS before commercial operations commence. Incentive revocation is possible if investment commitments are not met. Customs facilities require registration and an IT inventory system. The Administrator KEK integrates approvals, but the process still takes months, not days.
- Pillar Two for large MNEs. PMK 136/2024 introduced the 15% global minimum tax domestic top-up from October 2024. MNE groups above the EUR 750 million revenue threshold need to model their effective tax rate accounting for QDMTT, not simply assume the statutory holiday converts to a zero effective rate.
- Policy risk and zone proliferation. KEK proliferation under successive administrations means individual zone performance varies widely. The evaluation and revocation mechanism in PP 40/2021 is structural protection for the system, but it also means zone status is not permanent if targets are missed. Both Bali zones are early relative to their multi-decade targets; Sanur is further advanced in realized investment than Kura Kura. Neither zone’s long-range projections are guarantees.
Academic research on Indonesian SEZs (VoxDev, citing economic impact studies through 2023) found minimal aggregate effect on regional growth and welfare for the SEZ program as a whole, with the weakest performance in remote or newly established zones. Bali’s zones are not remote, and one (Sanur) has anchor institutional investors in place — but the macro caveat is worth noting for investors modeling spillover growth scenarios.
Quick Reference: Regulation Map
| Regulation | What It Governs | What Investors Need From It |
|---|---|---|
| UU 39/2009 jo UU 6/2023 | Base framework: definitions, Dewan Nasional, Administrator, incentive authority | Legal basis for zone status; authority for all downstream rules |
| UU 11/2020 → Perppu 2/2022 → UU 6/2023 (Cipta Kerja chain) | Omnibus amendments: OSS-RBA, PT PMA capital cuts, simplified zone establishment | Current licensing framework; confirms OSS as single-entry point |
| PP 40/2021 | Zone operations, BUPP duties, Administrator mandate, fiscal/non-fiscal facility detail, evaluation and revocation | Art. 32 (one-stop licensing), Art. 83 (fiscal basis), Art. 100 (local tax reduction mandate) |
| PP 41/2022 | Establishes KEK Sanur: 41.26 ha, sectors, BUPP, obligations | Confirms zone legal basis, sector categories, and developer mandate for Sanur |
| PP 23/2023 | Establishes KEK Kura Kura Bali: 498 ha, sectors, BTID, 36-month deadline | Confirms zone legal basis, sector categories, BTID mandate, and deadline obligations |
| PMK 237/2020 jo 33/2021 | Tax holiday tiers, tax allowance, PPN/PPnBM, customs treatment in KEK | The operative fiscal incentive document; file this before commercial operations |
| PMK 136/2024 | Global Minimum Tax / Pillar Two domestic top-up (QDMTT) | MNEs ≥ EUR 750M revenue: models effective tax rate net of top-up |
| PP 5/2021 | OSS-RBA risk-based licensing framework | NIB issuance, KBLI classification, sectoral verification routing |
| PP 18/2021 | Land rights: HGB 30+20+30, Hak Pakai, estate regulation in zones | 80-year total HGB via cycles (not one-tranche); no Hak Milik for foreigners; PT PMA route |
Need the regulation applied to your specific situation? This page explains the framework; it is not legal advice. use our enquiry form or contact us on WhatsApp to be connected with a specialist who has worked through KEK licensing for your sector. If you proceed with a partner referral, they may pay us a fee — it costs you nothing extra.
Frequently Asked Questions
What is the primary law governing KEK regulations in Indonesia?
The base statute is UU No. 39 Tahun 2009 tentang Kawasan Ekonomi Khusus, most recently amended by UU No. 6 Tahun 2023 (which enacted Perppu 2/2022, the corrected Cipta Kerja Omnibus Law, as permanent statute). The central implementing regulation is PP No. 40 Tahun 2021, which governs zone operations, the Administrator KEK mandate, and the fiscal and non-fiscal incentive framework.
What does PP 40/2021 actually require an investor to do?
PP 40/2021 (Penyelenggaraan KEK) does not impose obligations on investors directly — it governs the BUPP (developer-manager) and Administrator KEK. Its practical importance for investors is: Article 32 makes the Administrator the single point for all licensing; Article 83 authorises the fiscal facilities that PMK 237/2020 jo 33/2021 then details; and the evaluation and revocation framework sets the performance accountability structure that a zone’s BUPP must meet. Investors need to understand the evaluation framework because unmet BUPP obligations can, in theory, affect zone status.
How did the Omnibus Law / Cipta Kerja change KEK regulations?
The Cipta Kerja amendments (UU 11/2020, corrected via Perppu 2/2022 and enacted as UU 6/2023) made four material changes to the KEK framework: they simplified the zone-establishment process; mandated OSS-RBA as the licensing entry point; cut the minimum paid-up capital for PT PMA from IDR 10 billion to IDR 2.5 billion in practice (with a IDR 10 billion investment plan threshold per KBLI that remains); and strengthened the no-negative-list principle inside KEK so that sectors closed to foreign investment outside the zone can be open inside it, subject to Administrator KEK approval.
What is the Dewan Nasional KEK and how does it affect investors?
The Dewan Nasional KEK (National KEK Council) is chaired by the Coordinating Minister for Economic Affairs. It approves new zone proposals, monitors performance against targets, and can recommend zone revocation to the President under PP 40/2021. For investors, the Council’s evaluation role matters in two ways: it validates that an operating KEK has met its establishment obligations (reducing risk of zone-status disruption), and its periodic performance reviews create accountability pressure on the BUPP to deliver infrastructure and services. Both Bali zones — Sanur and Kura Kura — are under this evaluation cycle.
Does the PP 41/2022 or PP 23/2023 guarantee the incentives, or do investors need to apply separately?
The zone-designation PPs confirm legal KEK status and zone boundaries; they do not automatically confer fiscal incentives on individual investors. Each investor-entity (pelaku usaha) must separately apply for tax-holiday or tax-allowance facilities via OSS, and that application must be filed before commercial operations commence. Customs facilities require separate registration. The PMK 237/2020 jo 33/2021 framework governs the application process and conditions. Failing to apply in the correct sequence — or beginning commercial activity before approval — can result in losing eligibility for part or all of the incentive period.