SINGAPORE - United Overseas Bank (UOB) and Indonesia's Investment Coordinating Board (BKPM) signed a Memorandum of Understanding (MOU) on Friday aimed at increasing foreign direct investments (FDI) into, and trade with, Indonesia.
The MOU marks BKPM's first collaboration with a non-Indonesian bank in Southeast Asia, UOB said in a statement.
BKPM is an investment agency under the direct supervision of the President Joko Widodo. It supports FDI into Indonesia as well as Indonesian companies venturing overseas.
As part of the collaboration, BKPM will allow UOB's clients to apply for their Indonesia Principle Licence directly in Singapore without having to travel to Indonesia. This will be a first-in-the-market service provided by UOB through BKPM's The Indonesia Investment Promotion Centre (IIPC) Singapore, UOB said. The Principle Licence is the first licence a foreign company must obtain to incorporate an entity in Indonesia.
UOB will also support Indonesian investors who are looking to expand overseas via BKPM's IIPC.
Mr Sam Cheong, Head of UOB Foreign Direct Investment Advisory Unit, noted in a statement that Indonesia is a major investment destination for both global and Asian companies. In 2014, Indonesia was the second largest recipient of FDI inflows into Asean, receiving US$28.5 billion investments, UOB said. China's FDI into Indonesia has increased more than four times over the past three years, growing from US$141 million in 2012 to US$800 million in 2014, UOB also noted.
Mr Cheong said: "Huge business opportunities are arising from increased trade connectivity within the region, which will be further boosted by the upcoming implementation of the Asean Economic Community (AEC).
"In addition, under China's One Belt One Road (Obor) initiatives, we expect trade and investment between China and Southeast Asia to continue growing."
UOB's clients are already tapping on the large-scale infrastructure projects and increasing trade flows along the Obor to deepen their presence in this region, he added.
As a result of the MOU, BKPM will assist UOB's clients in seizing business opportunities in Indonesia through the Bank's FDI Advisory Unit.
Mr Franky Sibarani, Chairman of BKPM, said, "We are delighted to offer investors a smoother path for investing in Indonesia. (The MOU) will help to promote investments in Indonesia across major sectors such as the infrastructure, maritime, import substitution, export oriented, agriculture, downstream mining, industrial estate and tourism industries."