Three Ways to Conduct FDI in Indonesia

 

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Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Knowing Joint Venture Companies in FDI Indonesia", "Overview of Special Economic Zones and Integrated Industrial Zones in Indonesia", you may read also "Understanding 5 Steps Foreign Direct Investment In Indonesia" and on this occasion we will discuss about 'Three Ways to Conduct FDI in Indonesia'.

Many people consider that Indonesia is a country with great potential for foreign investment, because there are many factors that are attractive to investors. One of them is low costs, covering various types of expenses for a business, such as the price of raw materials to labor wages. Therefore, it is not surprising that we often find factories and companies owned by business people from other countries.[1]

The three ways to make foreign investment in Indonesia are as follows:[2]

1. FDI can be done by buying an existing company in a country, or it can also be done by providing capital to build a new company in that country.
2. Direct foreign investment is also usually characterized by the purchase of at least 10% of shares in a country's company by individuals or companies from other countries. If the share purchase is less than 10%, the International Monetary Fund (IMF) defines share ownership as a person's or company's share portfolio only.
3. Other ways to carry out foreign direct investment are also usually in the form of purchasing or building factory construction, as well as purchasing land by foreign investors. This form of building or land ownership from foreign direct investment is generally full or almost full.

And if you have any legal issue in Indonesia territory, contact us for business inquiry, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Foreign Direct Investment, Lihat Cara Investasi & Manfaatnya di Sini!", www.online-pajak.com., 28 November 2019, Diakses pada tanggal 22 April 2024, Link: https://www.online-pajak.com/tentang-pph-final/foreign-direct-investment

2. Ibid.

Knowing Joint Venture Companies in FDI Indonesia

  

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Basic Requirements for Foreign Direct Investment in Indonesia", "Understanding 5 Steps Foreign Direct Investment In Indonesia", you may read also "Overview of Special Economic Zones and Integrated Industrial Zones in Indonesia" and on this occasion we will discuss about 'Knowing Joint Venture Companies in FDI Indonesia'.

FDI or "Foreign Direct Investment" is a form of investment carried out by a company from one country to invest its capital over a long period of time into a company in another country. So this foreign direct investment involves two countries at once.[1]

There are various forms of FDI, one example is a joint venture, this joint venture is the ownership of a company that is jointly owned by two or more countries.[2] Examples of this joint venture include PT Nestle Indofood Citarasa Indonesia which is a company formed between PT Nestle Indonesia and PT Indofood CBP Sukses Makmur Tbk. And many more. The most important legal basis for the formation of this joint venture company is the Investment Law and the Limited Liability Company Law. And if you have any legal issue in Indonesia territory, contact us for business inquiry, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "FDI DI INDONESIA", bbs.binus.ac.id., Diakses pada tanggal 20 April 2024, Link: https://bbs.binus.ac.id/ibm/2017/11/fdi-di-indonesia/

2. Ibid.

Basic Requirements for Foreign Direct Investment in Indonesia

  

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Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Suspect Still Underage, Murder Case in Germany Closed", "Understanding 5 Steps Foreign Direct Investment In Indonesia", you may read also "Overview of Special Economic Zones and Integrated Industrial Zones in Indonesia" and on this occasion we will discuss about 'Basic Requirements for Foreign Direct Investment in Indonesia'.

For foreign investors who wish to invest their capital in Indonesia, they must establish a company based on the business fields listed in the KBLI (Standard Classification of Indonesian Business Fields). This foreign company is in the form of a PT (Limited Liability Company) which is owned by at least two shareholders, either individuals or companies. Furthermore, investors must pay attention to the guidelines for closed and open business fields with the requirements for foreigners as stated in Presidential Decree No. 44 of 2016. If the business field is not listed on the list, it means foreign share ownership can be up to 100%.[1]

What is the minimum value of foreign investment in Indonesia? The minimum value of foreign investment in Indonesia is IDR 10 billion (excluding land and building prices). The minimum amount of capital paid into a bank in Indonesia is IDR 2.5 billion.[2] And if you have any legal issue in Indonesia territory, contact us for business inquiry, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Penanaman Modal Asing di Indonesia", investindonesia.go.id., BKPM, Diakses pada tanggal 11 April 2024, Link: https://investindonesia.go.id/id/artikel-investasi/detail/penanaman-modal-asing-di-indonesia

2. Ibid.

Suspect Still Underage, Murder Case in Germany Closed

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Strange Divorce Case Because of Coffee", "Prices of Houses that Foreigners Can Buy and Own in Indonesia", you may read also "How To Buy Land In Indonesia?" and on this occasion we will discuss about 'Suspect Still Underage, Murder Case in Germany Closed'.

Reported by the AFP news agency, the victim, known only as Luise, disappeared in March after leaving a friend's house near the town of Freudenberg, in the state of North Rhine-Westphalia. His body was found with multiple stab wounds the next day in a forest area, not far from his house. Two girls aged 12 and 13 who knew Luise later confessed to the murder. Investigators said there was no sign that a third party was involved in the stabbing.[1]

German prosecutors said they had closed the murder case involving two minors. The two girls admitted to stabbing to death a 12 year old girl. This case was closed because the perpetrator of the murder was too young to be held criminally responsible. In Germany, the age of criminal responsibility begins at 14 years old.[2]

After the murder, the schoolgirls were placed under the care of juvenile welfare authorities. According to local authorities, they are currently housed in a "therapy facility" and receiving school lessons there. The case revived memories of the 1993 murder of two-year-old James Bulger in England. The boy was kidnapped and tortured before being killed by two 10-year-old boys, Robert Thompson and Jon Venables.[3] And if you have any legal issue in Indonesia territory, contact us then, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Geger Pembunuhan Anak di Jerman, Kasusnya Kini Ditutup", news.detik.com., Rita Uli Hutapea, Selasa, 12 Sep 2023 15:04 WIB, Diakses pada tanggal 15 Maret 2024, Link: https://news.detik.com/internasional/d-6926937/geger-pembunuhan-anak-di-jerman-kasusnya-kini-ditutup

2. Ibid.

3. Ibid.

Strange Divorce Case Because of Coffee

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Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Not Paying 3 Months' Rent, Man Allegedly Locked by Apartment Owner Until He Starved to Death", "How to submit a divorce lawsuit in Indonesia", you may read also "Another Unique Case, Judge Marrying Divorce Plaintiff Becomes Second Wife" and on this occasion we will discuss about 'Strange Divorce Case Because of Coffee'.

The first coffee shop was founded in Istanbul, the capital of Turkiye in the era of the Ottoman Empire in 1554. Coffee shops then began to open one by one in every region of the empire. Each shop also has a different concept, for example porter coffee shop, artisan coffee shop, janisari coffee shop, and tulumbac coffee shop. Increasingly, these shops are not just places to drink coffee. Coffee shops are also places where people gather and socialize, discussing various things, including political matters.[1]

When coffee shops developed in the Turkiye region, only men could go and drink in coffee shops. Women could only drink coffee at home or in the bathhouse. To get coffee, wives depend on gifts from their husbands. Therefore, a wife who is not satisfied with her husband's gift of coffee can divorce her partner according to legal regulations.[2]

The Ottoman Empire issued a regulation stating that men could consume coffee. However, if a husband does not bring enough coffee to his house, then his wife has the right to sue him.[3] And if you have any legal issue in Indonesia territory, contact us then, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Di Abad Ke-16, Istri di Turkiye Bisa Gugat Suami karena Kopi yang Kurang Enak", Kompas.com., Tim Redaksi: Erwina Rachmi Puspapertiwi & Inten Esti Pratiwi, tanggal: 11/09/2023, 08:15 WIB., Diakses pada tanggal 15 Maret 2024, Link:  https://www.kompas.com/tren/read/2023/09/11/081500365/di-abad-ke-16-istri-di-turkiye-bisa-gugat-suami-karena-kopi-yang-kurang?page=all.

2. Ibid.

3. Ibid.

Not Paying 3 Months' Rent, Man Allegedly Locked by Apartment Owner Until He Starved to Death

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Expired Indonesia Driving License Can be Extended, Note the Conditions!", "A Man In Surabaya Jailed For Stealing His Own Car", you may read also "Prices of Houses that Foreigners Can Buy and Own in Indonesia" and on this occasion we will discuss about 'Not paying 3 months' rent, man allegedly locked by apartment owner until he starved to death'.

Have you ever been late paying your rent for a house or apartment? What experiences have you had and what the unit owner did when you were late paying? A man in Malaysia had a bad experience. He starved to death because he was allegedly locked from the outside by the apartment owner. This incident was widely discussed in Malaysia. His body was found by neighbors in July 2023. "It is believed that the owner locked it because the victim did not pay rent for 3 months".[1]

The victim, who was a 40-year-old private driver, was reportedly unable to seek help because he did not have enough money to buy telephone credits. However, it is not clear whether the apartment owner knew there was someone inside or not when he locked the door. The victim's lawyer said that, despite the fact that the tenant could not pay, the owner could not immediately lock the apartment door because it was potentially dangerous and could cause death. In addition, he said, it is also a form of imprisonment.[2]

"If the tenant defaults, the owner can obtain a court order through the courts, or handle it through a small lawsuit," he explained further. “Tenants should not be locked out”. "We have just taken up the case and will submit it to court as soon as possible to seek justice for the deceased," he added.[3] And if you have any legal issue in Indonesia territory, contact us then, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Tak Bayar Sewa 3 Bulan, Pria Diduga Dikunci Pemilik Apartemen Hingga Mati Kelaparan", www.detik.com., Zulfi Suhendra, Minggu, 13 Agu 2023, Diakses pada tanggal 14 Maret 2024, Link: https://www.detik.com/properti/berita/d-6873312/tak-bayar-sewa-3-bulan-pria-diduga-dikunci-pemilik-apartemen-hingga-mati-kelaparan

2. Ibid.

3. Ibid.

Expired Indonesia Driving License Can be Extended, Note the Conditions!

 

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Golden Visa and Possible Implementation in Indonesia", "A Man In Surabaya Jailed For Stealing His Own Car", you may read also "Be Careful Using AI, You Will be in Trouble for Citing Non-existent Jurisprudence" and on this occasion we will discuss about 'Expired Indonesia Driving License Can be Extended, Note the Conditions!'.

Renewal of expired driving licenses (SIM/Surat Ijin Mengemudi) can be done starting Wednesday (13/3/2024). The expired driver's license extension service is related to the National Holiday (Nyepi Day 2024). But not all expired SIMs can renew on Wednesday. Only SIMs that expire during national holidays can be extended.[1]

A dead driving license (SIM) has actually expired so if the validity period has passed, the owner must issue a new SIM with a re-examination. SIM owners who are late in renewing their license by even one day are required to renew it using a new SIM issuance mechanism. This is stated in Police Regulation number 5 of 2021 concerning the Issuance and Marking of Driving Licenses article 4.[2]

To extend a driver's license, there are several requirements that the applicant must fulfill. The details are as follows:[3]

1. Previous SIM card;

2. Resident Identity Card (KTP);

3. Physical health examination results;

4. Psychological test results;

5. A photo with a blue background, not a selfie;

6. Photo of the signature on plain white paper with thick ink.

And if you have any legal issue in Indonesia territory, contact us then, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "SIM Mati Bisa Diperpanjang Mulai Pekan Depan, Catat Syaratnya!", oto.detik.com., Dina Rayanti, Sabtu, 09 Mar 2024 10:47 WIB, Link: https://oto.detik.com/berita/d-7233101/sim-mati-bisa-diperpanjang-mulai-pekan-depan-catat-syaratnya.

2. Ibid.

3. Ibid.

Golden Visa and Possible Implementation in Indonesia

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Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Indonesia Sport, Music and Art Visa, What Are They?", "Knowing the Terms of Visiting Visa in Indonesia", you may read also "Knowing KITAS (Limited Stay Permit Card) In Indonesia" and on this occasion we will discuss about 'Golden Visa: Advantages, Disadvantages, and Possible Implementation in Indonesia'.

After the COVID-19 pandemic, the Indonesian economy has succeeded in showing its resilience, marked by economic growth in 2022 reaching 5.31 percent. This value is higher than economic growth in 2021 which reached 3.70 percent. Realization of foreign direct investment (PMA) also managed to reach IDR 654.4 trillion. The flow of investment into Indonesia will certainly bring in new capital to help finance development, create jobs and transfer technology. Realizing the importance of investment for the stability of the Indonesian economy, President Joko Widodo has made efforts to increase the entry of foreign investment into Indonesia. One of the efforts being considered to attract foreign investors is the plan to implement the Golden Visa policy. Currently, plans for implementing the Golden Visa policy are still being formulated by the relevant ministries/institutions, after previously discussing them with the President. In his thanksgiving speech for the 73rd Immigration Service Day on January 26 2023, the Minister of Law and Human Rights (HAM) specifically asked the ranks of the Directorate General of Immigration to carry out thorough research and make comparisons with other countries before determining the Golden Visa policy.[1]

General Description of Golden Visa

Based on the OECD definition, the Residency by Investment and Citizenship by Investment schemes, or often referred to as 'Golden Visa' and 'Golden Passport", are policies implemented by a country through a mechanism for providing permit facilities. residence or citizenship for foreign nationals (WNA) through investment or paying certain fees. Several countries use various terms in naming the Golden Visa. Indonesia could use other terms, for example Visa or Limited Stay Permit. Golden Visa holders will enjoy exclusive benefits that are not received by visa holders in general, including easier and faster procedures and requirements for visa applications and immigration matters, mobility with multiple entries, longer stay periods, the right to own assets in the country, as well as being a fast track route for applying for citizenship.[2]

The Golden Visa scheme is expected to attract more foreign investment in various instruments, whether in investment funds, government bonds, company shares or property. In 2018, Transparency International conducted a study and estimated that in the 2008-2018 period, the European Union received around EUR 25 billion (Rp. 407 trillion) in the form of PMA thanks to the implementation of the Golden Visa scheme in its member countries. Although the Golden Visa is associated with investor visas, some countries also open opportunities for non-investor individuals with special skills to obtain a Golden Visa.[3]

By 2022, it is estimated that more than 60 countries will have implemented investment-based residency and citizenship policies. The practice of granting residence permits and investment-based citizenship was first carried out by the country of Saint Kitts & Nevis, a small country with two islands in the Caribbean region, in 1984. By providing a minimum donation of 150 thousand US dollars (Rp. 2.2 billion) to the Sustainable Growth Fund instrument or have investments in the real estate sector worth at least 200 thousand US dollars (Rp. 3 billion), a foreigner can obtain Saint Kitts & Nevis citizenship. In 1986 Canada began implementing a policy of granting investment-based residence permits through the Immigrant Investor Program (this program was discontinued in 2014), followed by the United States in 1990. The United States, through the EB-5 Immigrant Investor Program, provides conditional residence permits for 2 years and can be extended for foreign investors with a minimum investment value of 1.05 million US dollars (Rp. 16 billion).[4]

The global financial crisis that occurred in 2007-2008 made the practice of granting Golden Visas increasingly common among European countries in the context of economic recovery. The Spanish government through the Investor Visa provides residence permits for investors who (i) make an investment of 500 thousand euros (Rp. 8 billion) in the real estate sector, (ii) hold company shares or bank deposits with a minimum value of 1 million euros (Rp. 16 billion), ( iii) invest in government bonds of at least 2 million euros (Rp. 32 billion); or (iv) starting a specific type of business in Spain that creates jobs, has a socio-economic impact on local communities, or provides technology transfer.[5]

Not only countries in the Americas and Europe have the Golden Visa program, developing countries in the Asia Pacific and Africa regions also see the Golden Visa as an opportunity to boost incoming foreign investment. The United Arab Emirates (PEA) government provides Golden Visas for 5 or 10 year residence permits for investors, entrepreneurs, humanitarian workers, outstanding students and graduates, as well as individuals with special skills such as doctors, scientists or arts workers. The Thai government, through the Elite Residence Program, provides exclusive residence permits to foreigners for 5 years by paying a fee of 600 thousand baht (Rp. 265 million) or for 20 years by paying a fee of 1 million baht (Rp. 442 million).[6]

Negative Impacts That May Arise

For countries that implement the Golden Visa granting policy, this policy provides economic and fiscal benefits through encouraging private sector investment and increasing state fiscal revenues. However, granting a Golden Visa also does not rule out the possibility of negative implications, particularly causing fiscal and macroeconomic risks such as rapid economic fluctuations (boom and bust cycles) and property bubbles. Investment flows coming from the Golden Visa granting mechanism tend to be vulnerable and easily influenced by external factors, for example if a more attractive investment scheme is offered by another country, it does not rule out the possibility that investors will withdraw their investment from one country and move their investment to another country. which has a more attractive investment scheme.[7]

The policy of granting residence permits and investment-based citizenship has also received criticism because the policy is associated with selling citizenship. International law recognizes two principles related to citizenship, namely jus soli (citizenship is determined by place of birth) and jus sanguinis (citizenship is determined by blood ties). Granting citizenship based on investment is considered to deviate from these two principles.[8]

Apart from that, the Golden Visa scheme also poses a risk of misuse of residence and business permits, tax evasion, money laundering and funding of terrorist groups.[9] The negative implications of the policy of granting residence permits and investment-based citizenship are also not only worried by the granting country, but also by third party countries. In January 2022, the European Commission proposed terminating the bilateral agreement regarding the visa-free program with Vanuatu due to abuse of Vanuatu's Citizenship by Investment Program. To attract investors, the Vanuatu government is promoting the Citizenship by Investment program with the promise of providing visa-free access to the European Union, even though the bilateral agreement between the European Union and Vanuatu is not intended to provide an opportunity for foreigners who obtain Vanuatu citizenship to avoid the Union's visa requirements. Europe.[10]

Possible Implementation of the Golden Visa in Indonesia

Based on Law (UU) Number 6 of 2011 concerning Immigration and Government Regulation (PP) Number 31 of 2013 and its amendments, as well as Permenkumham Number 29 of 2021 concerning Visas and Stay Permits, foreigners who make foreign investments in Indonesian territory can apply for a Visa Limited Stay and Limited Stay Permit. The Ministry of Law and Human Rights has officially implemented the Second Home Visa as a form of new facility for global investors who wish to stay longer in Indonesia. A Second Home Visa is given to foreigners to stay in Indonesian territory for a period of 5 years or 10 years. Foreigners holding a Second Home Visa can carry out activities, including as investors, tourists and elderly/retired tourists. A Second Home Visa can also be applied for family members of the main Second Home Visa holder, namely children, husband/wife, or parents.[11]

Based on regulations at the level of the Directorate General of Immigration, Ministry of Law and Human Rights, applications for Visas and Limited Stay Permits for Second Homes are submitted by Foreigners or Guarantors by attaching Proof of Funds in the form of (i) an account belonging to the foreigner concerned at a State-Owned Bank with a value of at least IDR 2 billion or proof of property ownership in Indonesia in the luxury category. The fee charged for applying for a Second Home Visa is IDR 3 million per person for the Main Visa Holder and IDR 2 million per person for participating family members. Regarding plans to implement the Golden Visa policy, Indonesia is currently reviewing so that the Golden Visa policy can perfect the Second Home Visa policy that has been launched, and is expected to attract international target investors and business people, global talents and elderly international tourists who meet the requirements. It is hoped that the Golden Visa can become a 'golden ticket' for potential individuals from various countries to develop their capital and abilities in order to help increase employment opportunities and develop Indonesia's national economy.[12]

And if you have any legal issue in Indonesia territory, contact us then, feel free in 24 hour, we will be glad to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Golden Visa: Keuntungan, Kerugian, dan Kemungkinan Penerapannya di Indonesia", https://setkab.go.id/, Lusia Novita Sari, 2 April 2023, Diakses pada tanggal 8 Maret 2024, Link: https://setkab.go.id/golden-visa-keuntungan-kerugian-dan-kemungkinan-penerapannya-di-indonesia/ 

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Ibid.

8. Ibid.

9. Ibid.

10. Ibid.

11. Ibid.

12. Ibid.