INVESTMENT POLICIES STATEMENT
THE GOVERNMENT OF INDONESIA
AVAILABILITY OF FOREIGN EXCHANGE
The Government will continue to ensure, according to pre-set criteria and procedures, that foreign exchange for import transactions and dividend payments is freely available and the Government is committed to ensuring the ease of repatriation of capital and payments for business services.
ACCESS TO LOCAL FUNDING
The Government is considering introducing a simple system that will allow foreign investments access to local funding based on simple established criteria.
Within the framework of the labor laws of Indonesia, the Government recognizes that enterprises may require foreign expertise. Accordingly, it will continue to make residence permits readily available according to prevailing regulation for key personnel required for employment in such enterprises.
The Government recognizes the importance of infrastructure to support investment and is committed to make available adequate infrastructure such as transport, electricity, water and communications through partnership mechanisms that attract private capital. Adequate legal protection including guarantees for the integrity of contracts will be provided.
AVAILABILITY OF LAND
The Government is committed to ensure that land for industrial and commercial use is readily available to investors. The Government will receive and simplify all existing land licensing and environmental approval procedures to ensure transparency.
The Government is committed to develop new serviced industrial sites and has provided the necessary framework to enable private investors to develop industrial sites including through arrangements for subleasing to other investors.
ENCOURAGEMENT FOR SMALL AND MEDIUM ENTERPRISES
The country's small and medium scale enterprises hold great potential for rapid economic growth and employment creation. The Government is therefore dedicated to continuing with various programs assists these enterprises, including simplifying the regulatory and policy environment, removing obstacles to securing access to raw materials, removing tax related impediments and improving access to credit.
The Government will promote mutually advantageous, commercially beneficial subcontracting/ partnership arrangements between large-scale foreign and local firms and small- and medium-scale business.
To further enhance the capacity of the BKPM and to create an integrated investment promotion regime, the Government is actively reviewing proposals for the formation of an independent, public private partnership to promote and facilitate all private investment in Indonesia.
The Government is committed that the investment services for foreign and domestic investment in the era of regional autonomy is more preferable that the current condition. Therefore, a "one stop service" system will be introduced to be implemented in the region.
The Government recognizes that security of assets of investors is of paramount importance. It therefore, assures investors that it will avoid using any measures that will adversely affect their property rights.
In the case of foreign investors, the Government has negotiated and concluded several bilateral investment treaties, which provide direct protection to investors for the security of their assets as well as assurances for the repatriation of proceeds from their investments. The Government will actively work to pursue to conclude additional bilateral investment treaties with other countries. Indonesia has also joined the Multilateral Investment Guarantee Agency (MIGA).
DOUBLE TAXATION RELIEF
To improve economic and trade relationship with other countries, Indonesia would like to have certain law provisions that regulate the right of tax imposed from each country. The purposes of those provisions are achievement of rule of law, avoiding double taxation, and prevention of tax evasion. Government is entitled to make an agreement with other countries to avoid double taxation and to prevent tax evasion.
The framework and the matter of this agreement are based on international convention and other rule of laws and also the tax regulation of each country.
The Government recognized that foreign investors must have an appropriate forum to resolve disputes that can not be settled amicably. While such disputes would normally lie within the jurisdiction of a competent court, parties may agree in certain cases to pursue extra-judicial adjudication and to choose an appropriate forum, including international conciliation or arbitration.
To that end, Indonesia has become a member of the International Center for Settlement of Investment Disputes (ICSID) at Washington DC.