KUALA LUMPUR, March 10 — Malaysia reportedly tops the list of countries of foreign investors to have submitted the most letters of intent for investments in Indonesia’s new capital Nusantara.

According to a report by Nikkei Asia published yesterday, Agung Wicaksono, deputy for financing and investment at the Nusantara Authority, said Indonesia has received about 100 letters of intent so far for investments in the new capital, with half from Indonesians’ local investors.

"The other half comes from foreign entities, led by Malaysia, interestingly it’s equal between the United States and China in terms of letters of intent being signed, and then followed by others.

"I guess that [is a reflection of] Nusantara as a city for all,” Wicaksono said during his visit to Nusantara in East Kalimantan, Indonesia.

"Out of the 100 letters received, 20 entities have entered nondisclosure agreements with the authority,” he added without elaborating further.

This report came after the head of the Nusantara Authority Bambang Susantono said Indonesia’s President Joko Widodo has approved a new regulation that offers tax incentives to businesses investing in Nusantara, including tax holidays of up to 30 years and 95 years of land use permits.

Susantono added that China is specifically interested in construction-related activities and renewable energy while countries such as South Korea, Japan, and other European countries have also expressed interest to invest in Nusantara.

"Most investors now are trying to explore in which areas they can do better ... [and] of course they have to compete with each other,” he added.

Susantono also said that the authority is mulling to create an individual enterprise to handle the business-to-business side of the investments.

He said that the new law on Nusantara passed in early 2022 is being amended in parliament to give them more authority to manage Nusantara-related resources, including the freedom to hire more private sector workers.

The head of the authority said the law are expected to provide assurance on the continuity of the capital relocation project beyond October 2024, when a new president is expected to be sworn in after elections slated for February next year.

Some investors have expressed concerns that Indonesia’s new president might scrap the project as Widodo is constitutionally barred from seeking a third five-year term.

On March 7, Prime Minister Datuk Seri Anwar Ibrahim told Parliament that at least 10 major Malaysian companies are looking into the possibility of making major investments in development projects in Nusantara.

He said the nine major companies are from peninsular Malaysia while the other one is from Sarawak, which includes Tenaga Nasional Berhad (TNB) and Telekom Malaysia Berhad (TM).

Nikkei Asia reported that local and foreign companies investing in Nusantara are eligible for a 100 per cent exemption from corporate income tax if they are registered as taxpayers in Indonesia and invest in several priority areas in Nusantara.

For example, those investing in the top two priority sectors — infrastructure and public services — can apply for a 30-year tax holiday if they begin investing between now and 2030.

Eligible investments include projects in renewable energy, toll roads, ports and airports, public transports, industrial parks, health care and education.