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UOB signs agreement with Indonesia's investment agency
UNITED Overseas Bank (UOB) on Friday signed an agreement with Indonesia's investment agency that comes under the direct supervision of Indonesia's President Joko Widodo, to facilitate foreign direct investments (FDI) into the country.
Under a memorandum of understanding, Indonesia's Investment Coordinating Board, known as BKPM, will allow UOB's clients to apply for a principle licence directly in Singapore. This licence is the first one that a foreign company must obtain to incorporate an entity in Indonesia. The agreement is also BKPM's first collaboration with a non-Indonesian bank in South-east Asia.
UOB has established nine FDI advisory units that support companies in expanding across markets, including one in Indonesia. Through these FDI advisory offices, UOB offers free advice and matchmaking services to prospective clients, in hopes of making money later through fee-generating services, or cross-border loans, capturing trade and investment flows within Asia.
In 2014, Indonesia was the second largest recipient of FDI inflows into Asean, receiving US$28.5 billion investments, data from BKPM showed. China's FDI into Indonesia has increased more than four times over the past three years, from US$141 million in 2012 to US$800 million in 2014.
"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," said Sam Cheong, head of UOB's foreign direct investment advisory unit, in a press statement. "In addition, under China's One Belt One Road initiatives, we expect trade and investment between China and Southeast Asia to continue growing."