SPECIAL REGULATIONS IN KEK SANUR: A GOLDEN OPPORTUNITY FOR FOREIGN INVESTOR IN THE HEALTHCARE SECTOR

KEK Sanur as a Center for Medical Tourism and Health Innovation

According to Government Regulation No. 41 of 2022, KEK Sanur has been designated as a special economic zone focusing on the health and tourism sectors. It is the first area in Indonesia specifically dedicated to investment in the healthcare industry. Covering 41.26 hectares, KEK Sanur is located in South Denpasar District, Denpasar City, Bali.

This area is equipped with adequate infrastructure and is set to become an international healthcare service hub, including Bali International Hospital (BIH) in collaboration with Mayo Clinic (USA). In addition to hospital services, KEK Sanur supports the establishment of specialist clinics, medical laboratories, research centers, and medical rehabilitation facilities.

The two main sectors being developed in KEK Sanur are:

1. Healthcare Sector: Hospitals, specialist clinics, medical research centers, pharmaceutical and medical device industries.
2. Tourism Sector: Focused on wellness tourism, rehabilitation facilities, and medical resorts with integrated health services.

Advantages of Investing in KEK Sanur

Simplified Licensing and Regulatory Autonomy

KEK Sanur offers a faster licensing process compared to regular regions. All administrative processes are handled through the KEK National Council, which provides greater flexibility in managing investment permits, operations, and labor.

• Licensing in KEK Sanur is quicker and simpler, with only one permit required for the entire KEK, eliminating the need for approvals from multiple regional or central agencies.
• Clinic permits in KEK Sanur are more flexible, especially for recruiting foreign medical professionals. Specialist doctors from abroad can obtain practice licenses faster and have easier access to work visas compared to other regions.

More Flexible Land and Property Ownership

KEK Sanur offers longer property ownership rights for foreign investors. According to PP No. 41 of 2022, the area provides:

• Right to Build (HGB) for up to 80 years, significantly longer than the normal limit outside KEK.
• Right to Use Property for up to 70 years with automatic extensions, which is more flexible compared to the standard rule that requires renewal every 30 years.

Foreign investors can also apply for long-term land ownership through specific investment mechanisms provided by KEK. This makes KEK Sanur a strategic location for long-term medical facility development without administrative hurdles related to land ownership.

Tax Incentives for Investors in KEK Sanur

KEK Sanur offers various tax incentives that are more attractive compared to other regions in Indonesia. These include income tax (PPh) reductions, VAT exemptions, import duty relief, and simplified export-import processes for medical equipment.

Reduced Corporate Income Tax (PPh)

The government provides up to 50% reduction in corporate income tax for the first 5–10 years for investors in KEK Sanur. The reduction amount depends on the investment scale and contributions to health technology innovation.

Value-Added Tax (VAT) Exemption

All healthcare services provided in KEK Sanur are subject to 0% VAT, meaning there is no additional tax for patients receiving medical services in this area. Health facilities operating in KEK are also exempt from VAT on medical equipment and pharmaceutical raw materials.

Import Duty Exemption

To support the use of advanced medical technology, KEK Sanur provides import duty exemptions for medical equipment not available domestically. This aims to attract more hospital and clinic investors who want to use the best medical technology from abroad.
Additionally, pharmaceutical and medical device manufacturers in KEK can enjoy import duty reductions on raw materials, making production costs more competitive.

Ease of Profit Repatriation

Foreign investors operating in KEK Sanur can repatriate profits in foreign currency without restrictions, as long as they comply with the applicable fiscal regulations. This provides flexibility for foreign companies to manage their profits without strict foreign exchange controls.

Foreign Medical Professionals Regulations in KEK Sanur

One of the main advantages of operating in KEK Sanur is the ease of recruiting foreign medical professionals. Unlike regular regions with strict limitations, KEK Sanur offers a more flexible mechanism for foreign medical staff.

Foreign medical professionals in KEK Sanur benefit from:

• Faster practice license processing compared to other regions.
• Longer work visas with simplified administrative procedures.
• No quota limits on the number of foreign medical staff that can be employed in healthcare facilities within KEK.

This makes KEK Sanur an international medical hub, allowing investors to bring in specialist doctors from various countries to practice in this growing medical tourism ecosystem.

Medical Tourism Market in KEK Sanur

KEK Sanur is not only focused on conventional healthcare services but also aims to develop medical tourism, targeting international patients. With higher medical service standards and modern facilities, KEK Sanur is positioned to become a top destination for patients from Australia, the Middle East, and other Asian countries.

The medical tourism market in KEK Sanur is also supported by domestic patients who previously sought treatment abroad, especially in Singapore and Malaysia. Each year, more than 2 million Indonesians travel abroad for medical treatment, spending approximately IDR 97 trillion. KEK Sanur aims to retain these patients by offering high-quality healthcare services within the country.

Comparison: KEK Sanur vs. Regular Regions