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Government Grants in Indonesia

Jun 205 mins

A government grant is a financial contribution made by the federal, provincial, state, or local governments for a variety of reasons and to any eligible person or entity. Grants in Indonesia enable numerous organisations that are incorporated in the country to undertake projects and business operations that they would not otherwise be able to do; they also provide greater financial security to those who receive them.

Why does Government Grant exist?

Certain government incentives are designed to assist organisations in improving their facilities and/or operations. These are usually public-service organisations that lack the financial resources to enhance their facilities without help from outside sources. Grants are frequently used to:

  • Repair damages

  • Fortify buildings

  • Improve the premises’ environmental sustainability

  • Create additional structures to meet the needs of the entity’s client

Government subsidies are also available, which offer cash for teaching materials. Typically, such funds are granted to schools and institutions. Other educational subsidies are available to persons who are financially disadvantaged.

There are certain grants available to help national, local, and commercial organisations prepare for emergencies. The money raised through such grants may be used to purchase equipment that would help lessen the consequences of an emergency or to pay for emergency workers’ salaries. Emergency grants help to improve the degree of safety and security in any particular community.

Grants to help social programs are also available from some governments. These social programs may help with environmental preservation, educational advancement, and disability support, among other things.

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Grants Offered by the Indonesian Government

The government of Indonesia offers several grants for which certain businesses are eligible.

The majority of Indonesia’s economic growth is based on contributions from small and medium businesses at the grassroots level (SMEs). As a result, it is clear that Indonesia’s SMEs are critical to the country’s long-term and sustainable economic growth.

For this reason, the Indonesian government intends to help the country’s SMEs improve their productivity levels and experience growth rates similar to those of large enterprises. The Indonesian government also works with certain non-profit organisations so that it can issue appropriate grants to SMEs across Indonesia.

Some of the grants are highlighted below:

1. Credit for Businesses (Kredit Usaha Rakyat)

This grant offers SMEs in Indonesia with credit, working capital, and investment finance programs that are precisely customised to meet their financial needs. The Startup Incubator Program was established by the Ministry of Cooperatives and SME. This program aims to promote local entrepreneurship in Indonesia and is linked to a number of other SME-related awards granted by the Indonesian government.

2. Start-up Incubator Program

This initiative was launched in collaboration with the Ministry of Corporate Affairs and Small Medium Enterprises (SMEs) in Indonesia. This is to allow more locals to patronise and support local entrepreneurship as most of the businesses received direct grants relating to SMEs by the government.

3. Micro Business and Government microloan Program (KUR).

This grant allows local business owners to loan up to a certain amount for their businesses. The amounts are as follows:

  • 10 million Rupee to 500 million Rupee with an interest subsidy of 6% for the first 3 months and 3% for the next 3 months.

  • 500 million Rupee to 10 billion Rupee with interest subsidy of 3% for the first 3 months and another 2% for the next 3 months.

Indonesia’s consistent and rapid economic growth has led many to have desires to migrate there so as to take advantages of the economic advantages present across the country.

How do Government Grants Benefit Businesses?

Government grants can be used in a variety of ways to support businesses in Indonesia. The financial benefits are the most important benefit of government incentives offered to SMEs in Indonesia. Grants are essentially unrestricted funds that do not need repayment in any way.

This reality permits many small business owners around the country who don’t have a lot of revenue and can’t repay a loan to find themselves in a much more financially sustainable scenario.

It is also not difficult to figure out if one’s company qualifies for any of the Indonesian government’s grants. This is due to the fact that information on the availability of and eligibility for such awards can be accessed on a variety of websites.

Looking to start your new business venture in Indonesia? Reach out to us for incorporation, visa, and other corporate services today.

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FAQs

What is working capital policy?2021-12-27T10:44:12+08:00

The working capital policy aims to provide low-cost working capital loans to MSMEs in deposits or demand deposits in collaboration with commercial banks.

The government places funds for IDR 30 million for six months to accelerate the provision of credit to MSME specifically belonging to labor-intensive industries.

How to apply and register for grants?2021-12-27T10:43:33+08:00

Step 1: Familiarise yourself with the grant cycle and determine your eligibility for the grant opportunity.

Step 2: Search for the specific grant you will apply for

Step 3: After familiarising, prepare the list of reporting requirements to comply with the granting norms.

Step 4: Fill in the form and apply for a suitable grant.

Step 5: Complete the registration process, submit and wait for the update by the government.

Which Industries have the most Government Grants Received by their Businesses?2020-04-02T15:27:20+08:00

Government grants in Indonesia may be received by business in any industry. However, the fact remains that the government deems more businesses in certain industries as being more deserving of government grants than in other industries. In Indonesia, the industries with businesses that have claimed the most government grants are textiles, coal, automotive, palm oil, and petroleum and natural gas.

Can a Business Claim more than One Government Grant?2020-04-02T15:26:28+08:00

According to the current laws in Indonesia, there are no restrictions on the number of grants for which a business owner may apply. Should it happen to be the case that a business is eligible for more than one government grant at the same time, the business owner may apply for all of them. The Indonesian government typically supplies further details related to its grants for the benefit of all those who intend to apply for one or more of them.

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