Batam is strategically located within an international shipping route between the Indian and the pacific ocean. It lies only 20 kilometers to the southeast of Singapore which has one of the busiest seaport in the world. A ferry ride to Singapore takes only 60 minutes. The area of batam is 415 sq – km. However, due to the progress of investment and demand of space, the Batam industrial area was expanded in 1993 with the inclusion of two other islands, Rempang, Galang and the smaller surrounding-islands or Barelang. The total area became 715 sqkm. All the main islands area linked with the Trans-Barelang road, which include six beautiful bridges.
Although dubbed as an industrial area, Batam is developed to serve four main functions, namely: industrial, trade, tourism, and transshipment area. The whole area of Batam, Rempang and Galang is also declared as Free Trade Zone. All imported goods for production purposes, such as capital goods and raw material, are exempted from import tax. Batam is built to be an export oriented industrial area, so as not to compete with other industrial areas in Indonesia wich market their products within the country. Proximity to Singapore is one of the advantages so investors will not feel isolated in Batam. Batam is developed to take benefit of the progress that has been achieved by its neighbor. Facing land scarcity and high rate of labor wage, Singapore takes advantage of land availability and investment cost competitiveness in batam. A close relationship between the two governments has encouraged good cooperation between private sectors on both sides.