Will The Investors Peek at Indonesia ? 

Both parties considered that the IL could cause a new form of colonization in economic matters. Various sections even also opposed. For example, land titles problem which arranged in the IL. Right to Cultivate can be given for one century (95 years); Right to Build for 80 years and Right to Use for 70 years.

Not less important is the labor problem which was estimated would be extorted along with a cheap payment and could cause a hijacking of natural resources. These various important issues are the reasons of the rejection of the IL by the both factions. Despite the fact that the IL has not in effect, the judicial reviews of the IL have blocked the effectiveness of the IL itself.

By the approval of the IL by the House of Representatives, the IL will replace the Foreign Investments Law No. 1 Year 1967 and the Domestic Investments Law No. 1 year 1968.

There are numerous obstacles in growing the investment climate in this country. One of them is the lack of legal certainty aspect. We often hear about the various regulations in investments are not profitable for the investors.

Various profitable policies were regulated to attract the foreign investors. The exemption of income tax (PPN) and tax incentives were strongly given.

Inexistence of legal certainty causes the investors unable to predict profits. Even about the plan; calculation and strategy which will be taken are very difficult to predict. Not to mention the illegal charge ‘disease’ that difficult to fight against with, bringing the consequences of the high cost economic in investment in Indonesia.

There are many of laws in this country that ' wilt before growing'. For example is the Law on Traffic; Regional Regulation on Smoking Prohibition; and Law on Taxation which are existed.

We might have to learn from Singapore. This country applied their laws and policies consistently. Lots of investors came to Singapore, because they have no doubt about the legal certainty in Singapore. The investors are certain that the investments regulations in the Merlion State would be applied in a good way.

Also for the export company above 10 million US$ could raise an international trade incentive of an exemption of tax from 50 % exported profits. All of us are certain that Singapore would not change their various the regulations in a jiffy. Will the investors take a glance at Indonesia?


Back