Investment Law No. 25 year 2007

This updated investment law redefines “capital investment” as all investments, whether by domestic or foreign investors, for the first time offering equal treatment to all investors. There is no longer a limit of 30 years on foreign investment permits, and gone is the provision in Law 1/1967 for they’re to be divestment. Additionally, the new law allows for the unimpeded reparation of capital.

No later than February 2014, all Indonesian citizens who want to do a business should enjoy the faster and easier process. This is the main target of the Policy Package to Improve the Ease of Doing BusinessThe government sets a target of eight areas of improvement to increase the ease of doing business, namely:

  1. Starting a Business
  2. Getting Electricity
  3. Paying Taxes and Insurance Premium
  4. Enforcing Contract
  5. Resolving Insolvency
  6. Registering Property
  7. Dealing With Construction Permits
  8. Getting Credits

In these areas, the Government sets a total of 17 actions. Each area covers one or more actions. However, all action must be implemented by February 2014.

On 23rd August 2013, the Government of Indonesia announced economic policy packages, among others aimed at increasing investment.

  1. Streamlining investment licensing
    Cutting barriers, particularly licensing procedures.
  1. Revising the “negative investment list”
    To make the investment law more and more investor-friendly.

    The new updated list of sectors open for FDI will be announced soon in within this year.
  1. More tax incentives
    Tax dispensation to labor-intensive industries: textile, apparel, footwear, furniture, and toys industries.

    Additional tax deduction to firms with at least 30 percent export-oriented products.