Investment Opportunities Negative List on Investment I. Economic Performance Economic Performance Investment Opportunities

The Investment Coordinating Board of the Republic of Indonesia 2 Outlines

II. Investment Opportunities

III. Negative List on Investment I. Economic Performance

The Investment Coordinating Board of the Republic of Indonesia 3

I. Economic Performance

The Investment Coordinating Board of the Republic of Indonesia 4 The Investment Coordinating Board of the Republic of Indonesia 5 USEurozone financial crisis USEurozone demand shock China asset bubble burst Oil price shock Total Score Taiwan 3 1 3 3 10 Korea 4 6 4 2 16 Hong Kong 1 4 2 10 17 Singapore 2 3 4 9 18 Malaysia 6 2 5 6 18 Thailand 7 5 6 1 19 China 10 8 1 7 26 Philippines 5 7 8 8 28 Indonesia 9 9 9 4 31 India 8 10 10 5 33 Source: Credit Suisse Growth risk ranking The Investment Coordinating Board of the Republic of Indonesia 6 ASEAN markets in context by country Source: EIU, Asian Development Bank, Intercedent IMA Asia The Investment Coordinating Board of the Republic of Indonesia 7 Source: Bank Indonesia Improved government debt position The Investment Coordinating Board of the Republic of Indonesia 8 Source: Bank Indonesia The Investment Coordinating Board of the Republic of Indonesia 9 Source: Bank Indonesia The Investment Coordinating Board of the Republic of Indonesia 10 The Investment Coordinating Board of the Republic of Indonesia 11 Source: BKPM 3.2 2.5 1.3 1.9 8 3.2 2.5 1.3 1.9 8.1 Jan-Sep 2012 The Investment Coordinating Board of the Republic of Indonesia 12 The Investment Coordinating Board of the Republic of Indonesia 13

II. Investment Opportunities

The Investment Coordinating Board of the Republic of Indonesia 14 • The i creasi g tre ds of I do esia’s i dustrial products a d relati ely co sta t o export of its industrial products, indicates the expanding of Indonesia domestic consumption during these past years. • The domestic production on automotives, machinery, chemicals, steel, as well as pharmaceuticals sub-sectors are still limited; therefore foreign manufacturers can increase its business in Indonesia through investment in those sub-sectors. Investment opportunities The Investment Coordinating Board of the Republic of Indonesia 15  A legal umbrella for tax holiday, Government Regulation PP No. 94 year 2010 concerning Computation of Non Taxable Income and Tax Payments in Current Year, has been stipulated.  Implementing regulation, Minister of Finance Decree PMK No. 130 year 2011 concerning tax holiday has been enacted on August 2011.  Tax holiday will be given on a selective basis i.e. pioneer investor particularly : - Base metal industry - Oil refinery industry - Machine industry - Renewable energy industry - Telecommunication equipment industry  Tax holiday application and approval will be reviewed by verification committee set up by the Ministry of Finance The Investment Coordinating Board of the Republic of Indonesia 16 The Investment Coordinating Board of the Republic of Indonesia 17

III. Negative List on Investment