Indonesia’s special economic zones are set to expand significantly as the government prepares to establish six new zones in 2026. This move will raise the total number of operational SEZs nationwide to 31. The expansion forms part of a broader strategy to accelerate investment realization, improve competitiveness, and increase capital efficiency.
At the same time, the government aims to create a more predictable and investor-friendly business environment by simplifying regulations and incentives. As global capital continues to seek stable growth destinations, Indonesia positions SEZs as a central pillar of its long-term economic development strategy.
Indonesia Special Economic Zones Expansion in 2026
The government views the expansion of Indonesia’s special economic zones as a strategic response to investment and efficiency challenges. By 2025, Indonesia will operate around 25 SEZs. In 2026, the addition of six more zones will bring that total to 31. Deputy Minister of Investment and Downstreaming and Deputy Head of BKPM Todotua Pasaribu confirmed the plan during the Indonesia Special Economic Zone Business Forum 2025 in Jakarta. He stated, “By 2025, we already have around 25 zones, and next year we hope to add about six more, bringing the total to 31.”
Moreover, the government designs each SEZ around specific sector themes. These themes include manufacturing, healthcare, education, and tourism. Through this approach, policymakers can consolidate licensing procedures, regulatory frameworks, and incentive schemes within clearly defined zones.
Todotua emphasized this advantage by saying, “Through SEZs, the government can consolidate licensing systems, regulatory strategies, and fiscal and non-fiscal incentives.” As a result, investors face fewer administrative barriers and clearer operating rules.
New SEZs Indonesia Target Strategic Industries
New SEZs Indonesia will also support industrial transformation by focusing on strategic and technology-driven sectors. The National Council for Special Economic Zones confirmed that the new zones will spread across Java, Kalimantan, and Sulawesi.
These locations allow the government to balance regional development while supporting downstream industrial projects. Acting Secretary General Rizal Edwin Manansang explained that the priority sectors reflect future-oriented investment needs. He said, “The sectors include electric vehicles, coal downstream processing, aluminum downstream processing, and petrochemicals.”
In addition, developers within SEZs will take responsibility for building core infrastructure. This approach ensures that industrial zones offer ready-to-use facilities for incoming businesses. According to Rizal, “Developers carry out construction within the SEZs. As a result, infrastructure is available and can attract other investors.” Consequently, the government expects faster project execution and stronger spillover effects across supply chains.
SEZ Investment Indonesia Attracts Global Investors
SEZ investment Indonesia continues to draw strong interest from global investors, particularly from China, Japan, and Europe. These investors have already submitted business plans, infrastructure proposals, and workforce projections to the government. Their interest reflects confidence in Indonesia’s regulatory direction and market potential. Furthermore, SEZs offer integrated one-stop services for business licensing, which significantly shortens the time needed to establish operations.
Rizal highlighted four main advantages that make SEZs attractive internationally. First, the one-stop licensing service improves efficiency. Second, infrastructure development aligns with regional characteristics. Third, SEZs allow flexibility across multiple sectors, including manufacturing, logistics, healthcare, tourism, and the digital economy. Fourth, competitive fiscal and non-fiscal incentives enhance overall project viability. He stressed, “These advantages position SEZs as strategic investment hubs and strengthen Indonesia’s role in the global supply chain.”
Lower ICOR and Job Creation Drive Economic Efficiency
Beyond attracting capital, SEZs also support national efficiency targets. Indonesia’s incremental capital output ratio currently stands at 6.5. The government aims to reduce this figure toward 5 by improving investment productivity. Todotua expressed this goal clearly, stating, “The expectation is that incoming investment will significantly reduce ICOR realization.” A lower ICOR indicates that each unit of investment generates higher economic output.
Since 2012, cumulative investment in SEZs has reached US$18.8 billion, equivalent to approximately Rp314 trillion. This investment has created 237,000 jobs and supported 351 operating tenants. In 2025 alone, SEZs recorded US$3.6 billion in investment, absorbed 79,000 workers, and generated exports worth US$5.43 billion. These figures highlight the growing contribution of SEZs to employment and trade performance.
SEZ Expansion Strengthens Indonesia’s Investment Outlook
The planned addition of six new SEZs in 2026 reinforces Indonesia’s commitment to sustainable investment growth. Through sector-focused zones, streamlined regulations, and competitive incentives, SEZs strengthen Indonesia’s appeal to global investors.
At the same time, the expansion supports efficiency gains, job creation, and export growth. As Indonesia’s special economic zones continue to evolve, they will play a critical role in positioning the country as a resilient and competitive investment destination in the global economy.
Source: investor.id
Image: Shutterstock / Suban Edyono
