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The Future of Asia 2019

Indonesia aims to attract foreign companies with new tax breaks

Incentives give country an advantage over Vietnam, industry minister says

Indonesian Minister of Industry, Airlangga Hartarto speaks to the Nikkei Asian Review on May 30, in Tokyo. (Photo by Kotaro Igarashi)

TOKYO -- Indonesia is counting on new tax incentives and upgraded infrastructure to lure more global manufacturers to the country, as it strives to become a factory floor for the world amid the simmering U.S.-China trade war.

Beginning next month, Southeast Asia's largest economy will offer a deductible tax of up to 200% to both domestic and foreign companies for research and development in the country. For every $100 million a company invests in R&D, it will receive a tax allowance of $200 million, Indonesian Industry Minister Airlangga Hartarto told the Nikkei Asian Review in an interview on Thursday.

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