The cost of doing business in Indonesia is not one number. For a manufacturer it is a stack of seven lines, each priced per unit of output: land, labour, electricity, gas, water, inland freight and port charges. Some are set nationally and cost the same in Medan as in Bekasi. Others move sharply with the site you choose.

This guide prices each line with 2026 figures, compares North Sumatra with Java, Vietnam and Malaysia where the data allows, and builds a worked cost stack per tonne for a bulk processor. We develop SIIPE, a planned integrated industrial estate in Medan Belawan, so we say where our own figures are planned rather than built, and where they are not published at all.

Last updated: 26 October 2026

The Seven Lines in the Cost of Doing Business in Indonesia

A site-selection model for Indonesia works best when every cost is converted to the same unit: dollars per tonne, per unit or per worker-hour of output. Converted that way, the cost of doing business in Indonesia separates into lines that location changes and lines it does not.

The table sorts the seven lines by who sets the price and whether moving a plant from Java to North Sumatra changes it.

Two of the seven, electricity and HGBT gas, carry the same price anywhere on the grid or pipeline. Wages, land, water and freight are where a location wins or loses. Company set-up, capital thresholds and licensing are a separate exercise, covered in our guide to doing business in Indonesia; this page prices the operation once it is licensed.

Land: Price per Square Metre, Spread Over the Plant’s Life

Industrial land is usually the largest single cheque and one of the smaller lines per tonne, because it is spread over decades of output. The useful number is not the price per square metre but that price divided by years of use and annual tonnage.

Published 2026 benchmarks show the spread. In Greater Jakarta, CBRE puts Cikarang, the most expensive submarket, at about Rp3.6 million per square metre in the second quarter of 2026, roughly US$201 at Rp17,900 to the dollar. Colliers put the average asking price across Greater Jakarta estates at US$181.59 per square metre in the first quarter. In northern Vietnam, Cushman & Wakefield reports an average asking rent of US$137.7 per square metre for the remaining lease term in the second quarter, a leasehold rather than a purchase.

No consultancy publishes a comparable series for North Sumatra, and SIIPE does not publish a price list. So use the sensitivity instead of a guess: on a 10-hectare plot serving 200,000 tonnes a year, every US$50 per square metre of land price adds about US$0.83 per tonne over 30 years, straight-line and before financing cost. At the Cikarang benchmark the same plot carries about US$3.35 per tonne.

Price is rarely what delays a plant. Title is. Across SIIPE, land certification is still in process, and parcels currently sit under different documents: some registered SHM, some held under a District Head Certificate. A foreign-owned PT PMA holds its plot under HGB title, so ask any estate which parcels can be issued to your company on HGB, and how long that takes, before you compare prices.

Labour: Minimum Wage Plus Statutory On-Costs

Indonesian minimum wages are set by province (UMP) and by city or regency (UMK) every December, so a factory’s wage floor depends on the district it sits in, not on a national average. The table compares 2026 floors in the districts a site-selection team would shortlist.

Conversions at about Rp17,900, VND26,060 and RM4.09 to the US dollar in October 2026. Indonesian figures are from the December 2025 decrees as reported by detik and Bisnis.com, Vietnam’s from Decree 293/2025, and Malaysia’s floor rises to RM2,000 from June 2027 under Budget 2027.

Medan’s floor is about 27% below Kabupaten Bekasi’s, about 42% below Malaysia’s, and about a fifth above Vietnam’s Region I.

The floor is not the payroll. Employers pay statutory social security on top through BPJS Ketenagakerjaan: 3.7% for old-age savings, 2% for pension, 0.3% for death benefit and 0.24% to 1.74% for work-accident cover depending on risk, a total of 6.24% to 7.74% of wages before the employer’s share of BPJS Kesehatan health contributions. Skilled operators, shift allowances and overtime sit above the floor, so treat the table as the minimum line, not the forecast.

A lower floor only helps if output per worker holds up.

If your model needs SIIPE’s land line, request land availability with your sector and plot size, and our team will reply with current availability and indicative terms.

Power, Gas and Water: National Tariffs, Local Connections

Electricity and gas are the two lines where Indonesia prices by policy rather than by location, which makes them easy to model and of little use as a reason to pick one region over another.

PLN’s industrial tariffs were held for the third quarter of 2026, as Energy Minister Bahlil Lahadalia announced on 30 June: Rp1,114.74 per kWh for I-3 customers above 200 kVA and Rp996.74 per kWh for I-4 customers at 30,000 kVA and above, about 6.2 and 5.6 US cents. October reports indicate the same rates continue into the fourth quarter. The I-3 figure is the off-peak rate; peak-hour consumption is billed higher.

For comparison, Malaysia’s Energy Commission lists TNB’s medium voltage general tariff, valid from 1 July 2025 to 31 December 2027, at 29.83 sen per kWh plus RM89.27 per kW of capacity and network charges. The energy charge alone is about 7.3 US cents per kWh. Vietnam’s EVN set its average retail price at VND2,204.07 per kWh from 10 May 2025, about 8.5 US cents across all customer classes.

Gas follows the same logic. The HGBT scheme prices pipeline gas at about US$6.5 per MMBTU for seven sectors: fertiliser, petrochemicals, oleochemicals, steel, ceramics, glass and rubber gloves. The Ministry of Energy and Mineral Resources grants eligibility per sector and per plant, never an estate, and outside those sectors you buy at a commercial price.

Water is the line that varies most and gets modelled least. It is billed per cubic metre by the estate operator or the regional water utility, and for refining, food processing and chemicals the bigger risk is an interrupted supply rather than the tariff. At SIIPE, the water treatment plant, wastewater treatment plant, power plant and natural gas supply are all planned estate components, and capacities and operational status are not stated in the plan. Our guide to industrial estate utilities sets out what to ask an estate about each connection.

Inland Freight and Port Charges: Where Location Shows Up

Freight is the line a site decides. Indonesia’s logistics bill was about 14.29% of GDP in 2022, the baseline in Presidential Regulation 41 of 2026, which targets 8% by 2045, and road transport accounts for about half of it in the planning ministry’s breakdown. Policy can lower that national average over two decades. Your plot’s distance to the berth sets your share of it from the first shipment.

Our logistics cost in Indonesia model prices the road leg for a bulk cargo. For dry bulk in 20-tonne tippers, the haul alone costs about US$2.01 per tonne at 5 km from the berth, US$3.69 at 30 km and US$8.38 at 100 km. For crude palm oil in road tankers, adding the quay handover and a transfer-loss allowance, the totals are US$4.53, US$6.40 and US$11.61 per tonne, against about US$0.16 for a pumped transfer through a pipeline that, at SIIPE, is planned rather than built.

Source: SIIPE logistics cost model, October 2026, at Rp17,900 to the dollar. Trucking rates and trips per day are assumptions to replace with your own quotes.

Port charges behave differently. They belong to the berth, not the plot, so two sites using the same terminal pay the same tariff. What changes the bill is berth time, and berth time follows cargo form. At Belawan Port, Pelindo Multi Terminal handled about 6,110 tonnes per ship per day of dry bulk against 1,722 of general cargo from January to August 2026, so a 10,000-tonne parcel occupies a berth for about 1.6 days in bulk and 5.8 days bagged. Packaging decisions made at the plant show up in port cost.

SIIPE sits 4.7 km from Belawan Port, about 10 minutes by road, and the masterplan places industrial plots under 5 km from the estate’s own planned jetty. The distance table for the estate is on our SIIPE Potential page.

A Worked Cost Stack per Tonne for a North Sumatra Plant

Putting the lines together shows which ones deserve negotiating time. The example is a bulk processor producing 200,000 tonnes a year on a 10-hectare plot, with every assumption stated so you can swap in your own.

Workforce size and power use per tonne are illustrative assumptions, not benchmarks for any sector. Port charges are left out because they are the same for every plot that uses the same berth.

Read across the rows rather than down. Moving the same plant from 5 km to 30 km from the berth adds US$1.68 per tonne. Paying Kabupaten Bekasi’s minimum wage instead of Medan’s adds US$0.87. For this plant, a plot 25 km further from the berth costs about twice the entire wage gap between Medan and Kabupaten Bekasi, the highest-paying Indonesian district in our table.

That is the arithmetic an integrated estate is designed around.

It does not settle every case. A plant whose output ships in containers through Java’s larger ports, or one that sells mainly to buyers in Greater Jakarta, may win back the difference in outbound freight and market access. Run the stack for your own lanes before you rank sites.

Frequently Asked Questions

What is the cost of doing business in Indonesia in 2026?

It depends on location and sector, but the main 2026 lines are clear: minimum wages of about US$180 to US$332 a month by district, industrial electricity at Rp996.74 to Rp1,114.74 per kWh, prime Greater Jakarta estate land near Rp3.6 million per square metre, and logistics at about 14.29% of GDP nationally.

Is it cheaper to run a factory in North Sumatra than in Java?

On wages, yes: Medan’s 2026 minimum wage is about 27% below Kabupaten Bekasi’s. Electricity and HGBT gas cost the same in both regions. The deciding line is freight, so compare plots by distance to the berth and by where your buyers are, not by province alone.

How much is industrial electricity in Indonesia?

PLN charges Rp1,114.74 per kWh for I-3 industrial customers above 200 kVA and Rp996.74 per kWh for I-4 customers at 30,000 kVA and above, about 6.2 and 5.6 US cents. The Energy Ministry reviews the tariffs every quarter and held them unchanged for the third quarter of 2026.

What do employers pay on top of the minimum wage in Indonesia?

Employers pay BPJS Ketenagakerjaan contributions of 6.24% to 7.74% of wages: 3.7% for old-age savings, 2% for pension, 0.3% for death benefit and 0.24% to 1.74% for work-accident cover by risk class. The employer’s share of BPJS Kesehatan health contributions comes on top, with allowances and overtime.

How much does industrial land cost at SIIPE?

SIIPE does not publish a price list, because pricing depends on plot size, title status and position within the estate. Send your sector and land requirement, from under 5 Ha to above 50 Ha, through the enquiry form on our website, and our team will reply with current availability and indicative terms.

Request Land Availability at SIIPE

SIIPE is a planned 5,600-hectare integrated industrial estate, deep seaport and township in Medan Belawan, North Sumatra, of which about 840 hectares has been acquired. Its current development phase covers 3,000 hectares: 1,800 for the industrial estate, 400 for the deep seaport and 800 for a residential township. The estate is 4.7 km from Belawan Port, and the masterplan puts every industrial plot under 5 km from its own planned jetty.

The estate targets crude palm oil and plantation processing, chemical and pharmaceutical, cement and dry bulk, commodities and manufacturing, and logistics and warehousing. We welcome 100% foreign investment, subject to your sector’s position on the Positive Investment List, and offer one-stop licensing and estate management services. The port, utilities and customs facility are planned, not operational, and the application for special economic zone and free trade zone status is in process and has not been granted.

Tell us your sector, your land requirement (under 5 Ha, 5 to 20 Ha, 20 to 50 Ha or above 50 Ha) and your investment timeline. Request land availability and our team will reply with current availability and indicative terms. You can also review the industrial land development plan or message us on WhatsApp at +62 811 860 980.