INCENTIVES AND BENEFITS OF INVESTING IN THE CLINIC SECTOR IN INDONESIA

Foreign investors looking to invest in Indonesia’s healthcare sector, particularly in establishing clinics, can enjoy various fiscal and non-fiscal incentives. The Indonesian government has eased regulations to attract investment in healthcare, aiming to improve access and quality of medical services, reduce the number of Indonesians seeking treatment abroad, and promote the country as a medical tourism destination.

Fiscal Incentives for Clinics and Healthcare Facilities

Fiscal incentives are designed to reduce tax and operational costs for investors establishing healthcare facilities in Indonesia.

1. Value-Added Tax (VAT) Exemption

Medical services in Indonesia are exempt from Value-Added Tax (VAT). This includes medical consultations, outpatient care, inpatient care, surgeries, and other medical procedures provided by licensed healthcare professionals.

Certain imported medical devices used in healthcare services may also qualify for VAT exemption, especially if they cannot be produced domestically. The government regularly updates the list of eligible medical devices for this incentive.

2. Import Duty Exemption or Reduction for Medical Equipment

Clinics importing high-specification medical devices can benefit from import duty exemption or reduction. This incentive applies to medical equipment that is not yet available in domestic production. Investors must apply to the Ministry of Finance through the customs incentive scheme to obtain this facility.

For clinics offering innovative services such as stem cell therapy or organ transplantation, the Ministry of Finance may provide special tax policies.

3. Reduced Corporate Income Tax (CIT) for Strategic Investments

Healthcare sector investors can receive incentives in the form of up to 50% reduction in corporate income tax (CIT) for the first five years. This applies to companies investing in priority sectors, including healthcare services focused on technological innovation and medical research.

Healthcare facilities located in Special Economic Zones (KEK) may enjoy even lower CIT rates under special tax schemes, promoting investment in these designated growth centers.

4. Incentives for Health Infrastructure Development

Investors who not only establish clinics but also build supporting facilities—such as research laboratories, rehabilitation centers, or hospitals—may receive additional incentives. These include accelerated depreciation and amortization, exemption from import duties and VAT on construction materials, and access to government financial institution funding.

Non-Fiscal Incentives for Clinic Investment

Besides tax relief and import cost reductions, foreign investors establishing clinics in Indonesia can also enjoy several non-fiscal benefits that facilitate and accelerate the investment process.

1. Simplified Licensing through Online Single Submission (OSS)

The government has implemented a digital licensing system called Online Single Submission (OSS) to speed up the investment process. Through this system, investors can apply for business permits online without going through lengthy bureaucratic procedures. The healthcare sector is one of the priorities in this licensing reform.

2. Long-Term Land Use Rights for Foreign Investors

One common obstacle for foreign investors in many countries is the restriction on land ownership. In Indonesia, foreign investors who establish clinics or healthcare facilities can obtain Right to Build (HGB) for up to 80 years in a single application, which can be extended without complicated procedures.

For facilities located in Special Economic Zones (KEK), extending the Right to Build is easier due to more flexible licensing systems in these areas.

3. Flexible Regulations for Foreign Medical Professionals

Clinics with specific specializations that lack sufficient local medical personnel can recruit foreign healthcare professionals. Specialist doctors and other foreign medical staff can obtain practice licenses more quickly in facilities authorized to employ foreign medical professionals.

In Special Economic Zones (KEK) like KEK Sanur, the licensing process for foreign medical professionals is more flexible compared to regular regions. This allows clinics in these areas to easily attract international experts.

4. Visa and Residency Benefits for Foreign Investors and Medical Professionals

Foreign investors opening clinics in Indonesia can obtain long-term investment visas and permanent residency permits. Additionally, doctors and other foreign medical professionals working in clinics can apply for special work visas in the medical sector without having to go through the longer standard work visa procedures.

Additional Benefits for Clinics in Special Economic Zones (KEK)

Foreign investors who choose to establish clinics in KEK, such as KEK Sanur, will receive additional incentives compared to healthcare facilities outside these designated zones. KEK Sanur is designed as a medical tourism and health innovation center, with more flexible regulations and better supporting infrastructure.

1. KEK Sanur as a Medical Tourism Hub

KEK Sanur is the first special economic zone in Indonesia to focus on the health and tourism sectors. With its well-prepared infrastructure, the area is set to become a premium medical services hub, attracting patients from abroad, particularly from Australia, Europe, and other Asian countries.

2. Greater Tax Incentives

Clinics operating in KEK Sanur can benefit from lower corporate income tax rates compared to other locations in Indonesia. Additionally, healthcare facilities in KEK Sanur are eligible for VAT and import duty exemptions on capital goods, medical equipment, and raw materials used in healthcare services.

3. More Flexible Regulations for Foreign Medical Staff Recruitment

Clinics and hospitals in KEK Sanur can obtain practice licenses for foreign specialist doctors more easily. The regulations in this zone are designed to attract international medical professionals without complex bureaucratic hurdles.

4. Access to the Global Medical Tourism Market

KEK Sanur has strong appeal for international patients seeking high-quality healthcare at more competitive prices than in countries such as Singapore or Malaysia. Clinics located in KEK Sanur have a strategic advantage in tapping into the growing medical tourism market.