In Southeast Asia, several countries implement special vehicle license plate systems in Free Trade Zones (FTZs) to distinguish vehicles that benefit from specific fiscal incentives. These systems serve not only as visual identifiers but also as tools for monitoring and controlling the movement of vehicles within areas that offer tax exemptions.
Indonesia: Green Plates
Since October 1, 2022, Indonesia has enforced the use of license plates with a green background and black lettering for vehicles operating in designated free trade zones such as Batam, Bintan, and Karimun.
This policy is regulated under Article 45, Paragraph 1 (f) of Regulation No. 7 of 2021 issued by the Indonesian National Police, which mandates that vehicles receiving import duty exemptions in free trade areas must use special plates.
The green plates signify that the vehicle is exempt from import duties, Value Added Tax (VAT), and Luxury Goods Sales Tax (PPnBM). However, these vehicles are restricted to use within the free trade zones and may not be transferred or registered in other parts of Indonesia unless applicable tax obligations are fulfilled.
Philippines: Special Stickers
In the Philippines, vehicles operating in free trade areas like the Subic Bay Freeport Zone and Clark Freeport Zone do not use unique license plates. Instead, they are required to display special decals or stickers issued by the local authorities. These decals indicate that the vehicle is registered within the freeport and enjoys duty- and tax-free privileges.
For example, in Subic Bay, vehicles must be registered with the Motor Vehicle Registration Office (MVRO) and obtain a designated sticker that verifies their tax-free status. This system helps local authorities monitor and regulate vehicles operating within the free trade zones.
Malaysia: ‘L’ Plates
In Malaysia, Labuan Island is a federal territory designated as a free trade zone. Vehicles registered in Labuan use license plates starting with the letter ‘L’ and enjoy tax exemptions.
However, if these vehicles are brought to Peninsular Malaysia, owners must pay import duties and motor vehicle taxes according to applicable regulations. Although there is no special license plate that visually distinguishes tax-exempt vehicles in Labuan, this system still provides fiscal incentives for vehicles operating within the territory.
Vietnam: Yellow Plates
In Vietnam, vehicles operating within special economic zones or at international border gates use yellow license plates with red letters and numbers. These plates indicate that the vehicles are registered in areas with specific fiscal benefits and include location codes and abbreviations of the economic zone in accordance with government regulations.
Comparison Table of Special Plates in Southeast Asia’s Free Trade Zones
| Country | Special Economic Zone(s) | Special Plate Type | Additional Notes |
|---|---|---|---|
| Indonesia | Batam, Bintan, Karimun (BBK) | Green plate with black text | Import duty exemption; vehicles cannot be used outside zone without special permission. |
| Philippines | Subic Bay, Clark Freeport | Special sticker or decal | Indicates vehicle is registered in free zone and enjoys tax benefits. |
| Malaysia | Labuan | Plate starting with ‘L’ | Tax-exempt; duties and taxes apply if vehicle is taken to Peninsular Malaysia. |
| Vietnam | Special economic - commercial or international border gate zones | Yellow plate with red letters | Used for vehicles in special economic zones or border gate areas. |
Visual Identification as a Regulatory Tool
The implementation of special license plates or identification in Southeast Asia’s free trade zones reflects government efforts to regulate and monitor vehicles benefiting from fiscal incentives. This system not only facilitates easy identification but also helps prevent abuse of tax exemptions and ensures that vehicles are used in compliance with applicable regulations.
With visual markers such as green plates in Indonesia or special stickers in the Philippines, authorities can more effectively manage free trade zones and maintain the integrity of the taxation system.
