Growing Business Opportunities in Balikpapan

Growing Business Opportunities in Balikpapan

  • InCorp Editorial Team
  • 19 June 2024
  • 5 minute reading time

Balikpapan is located in the heart of Indonesia’s East Kalimantan province. The city is known for its scenic coastal views and as a hub for business opportunities. This article will explore Balikpapan’s diverse and promising business opportunities landscape. 

Whether you’re a seasoned entrepreneur seeking new ventures or someone passionate about starting something new, Balikpapan offers many possibilities to explore. 

Balikpapan Investment Overview 

In the first quarter of 2023, domestic investments in Balikpapan City reached IDR 3.94 trillion (1,050 projects). Therefore, the investment is making it the largest in East Kalimantan. Balikpapan City attracted foreign investments totaling USD 15,090,600 in that timeframe, allocated across 188 projects. 

Converted to the local currency at the exchange rate of 1 USD to IDR 14,800, the total amounts reach roughly IDR 2.2 trillion. The Department of Investment and Integrated One-Stop Service (DPMPTSP) of Balikpapan City stated that one of the key factors supporting investment in the region is the presence of the Capital City of Nusantara (IKN Nusantara) relocation project to East Kalimantan.

Why Consider Investing in Balikpapan? 

Balikpapan has become an attractive area for business investment due to its proximity to the IKN. Doprtje Marpaung, Advisor to the Mayor of Balikpapan, emphasized that Balikpapan, as a supporting region for the IKN, is equipped with adequate infrastructure and facilities, including service and transportation facilities.

Looking ahead, Doprtje Marpaung also mentioned that Balikpapan aims to be an investment destination and comfortable living place. This way, newcomers will feel at home in Balikpapan. He noted that several countries have already committed to investing in Balikpapan, including Korea, Japan, Taiwan, and others.

Read more: Investing in Balikpapan: Capitalize on Business Opportunities in Indonesia

5 Business Investment Opportunities in Balikpapan

5 business opportunities to start in Balikpapan

Embarking on a venture in Balikpapan opens up promising business opportunities ripe for exploration. The city’s dynamic economic landscape offers diverse sectors poised for growth and innovation.

Several business opportunities in Balikpapan are worthy to explore, among others: 

Palm Oil Processing

Balikpapan is one of the cities in Indonesia with significant opportunities in the palm oil processing industry. With its strategic location as an industrial hub in East Kalimantan, Balikpapan provides promising potential for entrepreneurs looking to invest in palm oil processing. 

Good infrastructure support and ample available land are factors that contribute to the development of this industry.

Petroleum Oil Processing

The Pertamina Refinery Unit (RU) V Balikpapan is one of the largest manufacturing industries in Balikpapan. Currently, RU V Balikpapan supplies up to 26% of Indonesia’s total demand for petroleum fuels. 

The construction sector in Balikpapan is also supported by the Refinery Development Master Plan (RDMP) for the expansion of the RU V Balikpapan oil refinery.

Creative Industry

In recent years, the creative industry in Balikpapan has experienced significant growth. Various innovative products such as handicrafts, fashion, and unique cuisine have received high appreciation from residents and tourists.

Business opportunities in the creative sector are promising in Balikpapan, especially with the local government’s support in developing this field.

Moreover, considering that some offices are targeting to be operational in IKN by 2024, the Balikpapan City Government is currently preparing the tourism industry. 

Various types of tourism are being designed, including marine tourism, shopping centers, nature tourism, and artificial tourism.

Property Sector

Balikpapan is a rapidly growing city with a fast-paced economy. With this growth, the property sector has become one of the most promising areas to invest in Balikpapan. 

Demand for housing, office spaces, and recreational areas continuously increases, opening open property business opportunities. Especially with the development of IKN, Balikpapan is expected to generate massive property investments in the coming years. 

The most likely potential is the demand for residential products and facilities like retail centers and commercial spaces. The ongoing infrastructure development will further enhance the potential of cities like Samarinda, Balikpapan, and their surroundings, attracting the interest of investors.

Education and Training Services

As the city develops, the demand for education and training services also rises in Balikpapan. The local community is increasingly aware of the importance of education and skill enhancement for children and adults.

Challenges to consider

The development of Balikpapan City faces several challenges, including geographical and environmental factors.

Geographical Factors

Balikpapan has a hilly geographical condition with limited flat areas. Approximately 60% of Balikpapan’s terrain consists of hills with elevations exceeding 20 meters. This hilly terrain necessitates technical engineering solutions for development.

Environmental Factors

The city grapples with various natural disasters, including landslides, fires, and floods. The flood issue is primarily attributed to land use, drainage systems, and flood control methods.

With the designation of IKN’s location, numerous proposals for new housing developments in Balikpapan have been proposed. 

Changes in land use can affect the environment, potentially leading to alterations in rainwater drainage systems, which can trigger floods and landslides. The increasing density of buildings can also heighten the risk of fires.

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Take Advantage of Balikpapan’s Growth

Balikpapan, often regarded as the anchor city for the thriving IKN Nusantara region, has unparalleled economic potential across various industries and sectors. 

As the city continues to grow and evolve, it beckons to visionary investors seeking opportunities for expansion and growth. For those looking to capitalize on Balikpapan’s myriad prospects, InCorp Indonesia is your trusted partner. 

With our comprehensive suite of services in company registration and business licensing, we’re here to facilitate your seamless entry into this dynamic market. Complete the form below to take the first step toward realizing your business goals in a city of remarkable economic potential.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Frequent Asked Questions

There are two main types, namely, primary business licenses and non-primary business licenses. The primary ones commonly apply to various industries, such as general and industrial business licenses. Additional non-primary ones are included, depending on the operations of your business. Examples of non-primary business licenses are operational and commercial licenses.

Yes, you must apply for it to be able to issue work permits for your foreign employees. This permanent business license is also a prerequisite for the applications for other business licenses and import licenses.

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.