Nusantara - the new capital city of Indonesia (Photo source: futuresoutheastasia.com)

Jakarta - Indonesia has unveiled a host of tax breaks to attract companies and people to move to its new capital Nusantara in the heart of Borneo.

According to the local investment ministry, banks and insurers operating in Nusantara will have to pay no income tax for up to 25 years if they invest before 2035. Those investing before 2045 can get up to 20 years of tax break.

These are only one of the various incentives being offered by the government to get businesses to support President Joko Widodo’s 600 trillion rupiah (39.5 billion USD) plan to move the nation’s capital from Jakarta.

The incentives would only be offered until 2045, when Nusantara, expected to be entirely renewable-powered and technologically advanced, is set to be completed.

So far, 20 companies including local and foreign ones have shown interest in investing in Nusantara, with a few of them having signed deals, said Investment Minister Bahlil Lahadalia.

The government has begun building basic infrastructure in the new capital, including a water dam, roads and presidential and vice presidential buildings. The target is for public officials to start relocating next year.