Trump’s ‘Indonesian Hollywood’ partner breaks ground on studio after big tax break comes through

MNC Group’s Hary Tanoesoedibjo said the tourism complex containing Movieland studios had been designated a special economic zone

The designation allows for corporate tax cuts, although it was not clear whether the Trump Organization would benefit

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Hary Tanoesoedibjo, left, and his wife, Liliana Tanaja Tanoesoedibjo, cut the ribbon on the Trump Residences in Jakarta with Trump Organization Vice-President Donald J. Trump Jnr in Jakarta, Indonesia, in August 2019. Photo: Reuters

Published: 6:30pm, 15 Feb 2021Updated: 6:53pm, 15 Feb 2021

Indonesian tycoon Hary Tanoesoedibjo, a business partner of former US president Donald Trump, on Monday started construction on a movie studio as part of a tourism complex on Java island that is set to receive major tax breaks after it was designated a special economic zone.

Lido City is the umbrella project located around 60km south of the capital, Jakarta, in the Bogor area, where the Trump Organization will operate luxury villas, a resort and a golf course.

The project has been designated a special economic zone (SEZ) for tourism, which means it can benefit from corporate tax cuts, luxury goods sales tax cuts and receive some leniency on permits, PT MNC Studios International said in a statement.

“For around 1,000 hectares in Bogor Regency, a special economic zone permit has been obtained,” Tanoesoedibjo, MNC Group’s executive chairman, confirmed in a text message, adding that the movie studios will be wholly controlled by his company.

Tanoesoedibjo told local media he hoped the Movieland studios will become a creative hub and Indonesia’s version of Hollywood.

Indonesia’s National Council for Special Economic Zones, which recommended that President Joko Widodo approve the status, projected that Lido City could attract US$2.4 billion in investment and 3.17 million tourists each year through 2038. Businesses investing 1 trillion rupiah (US$71.92 million) or more in SEZs are eligible for tax holidays of up to 20 years that could be extended for two more years with a 50 per cent tax cut.

It was not clear whether the Trump Organization would benefit from tax breaks since MNC has not disclosed any profit-sharing schemes over the management of the properties. The Trump Organization is also partnering with MNC on another project in Bali.

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