INVESTMENT PROCEDURES

IN INDONESIA

By

Director of Investment Approval

Investment Coordinating Board

Researches to The Near Future Bussiness

International Jatropha Conference
Bogor, 24 – 26 June 2008

INVESTMENT COORDINATING BOARD 1

THE INVESTMENT COORDINATING BOARD
Badan Koordinasi Penanaman Modal (BKPM)

• What is BKPM
• Function

INVESTMENT COORDINATING BOARD

 Investment Policies
• Foreign investors are allowed to have 100% equity
in almost all investment sectors except in some
sectors foreign investors are allowed to own a
limited equity
• No mandatory requirement for divestment
• The amount of investment is depending on the
economic feasibility of the proposed project

INVESTMENT COORDINATING BOARD 3

 Investment Strategies
List of Business Fields Closed and Open To Investment
Under Certain Conditions
 Any business sectors are open to investment activity, except for these declared as being
closed and open with certain condition.
 Government by virtue of Presidential Regulation is to specify business sectors closed to
both
foreign and domestic investment based on the criteria of health, moral, culture,
environment, national defense & security, and other national interests.
 Government is to specify business sectors open with certain condition based on the criteria
of national interest, namely, the protection of natural resources, protection of micro, small
and medium business, as well as cooperatives, supervision of production and distribution,
increase of technological capacity, participation of domestic capital, and joint venture with
companies appointed by the government.

Incentives
 Relief of Import Duty
 Exempted of Value Added Tax

INVESTMENT COORDINATING BOARD 4

 Investment Opportunities
• Agribusiness : cultivation of soybean, banana, corn,
mango, potatoes, cocoa, coffee, cashew nut, sugar
cane, jathropha.
• Fisheries : marine fisheries resources
• Industries : food industries, wood and furniture, pulp
and paper, electronic and supporting, automobile and
supporting, textile and garment
• Services : trading, hotel and restaurant,
transportation, warehouses, telecommunication and
other service industry, recreational and entertainment
services, technical and engineering services.

INVESTMENT COORDINATING BOARD 5

Related Regulation
for Investment in Plantation Sector :
• Law of Republic of Indonesia No. 25 of 2007 on Investment
• Law of Republic of Indonesia No.18 of 2004 on Plantation.
• Regulation of The Minister of Agriculture
No.26/Permentan/OT.140/2/2007 regarding Guidelines to
Plantation Undertaking License.

• Presidential Regulation No. 111 Year 2007 regarding List of

Business Sectors Closed and Opened With Conditions to
Investment

INVESTMENT COORDINATING BOARD 6

Related Regulation
Jathropha Plantation

• Foreign investors are only allowed to own a

maximum of 95% equity
• Maximum limit of plantation area by 1 (one)
plantation company is 50,000 Hectare.
• Local government recommendation of available
area.

INVESTMENT COORDINATING BOARD 7

 Investment Procedure

• Stages of Investment License

Initial Investment Approval
Implementation Stage

• Service Mechanism
Front Office
Back Office

INVESTMENT COORDINATING BOARD

 Investor’s Application (PMA)

BKPM

Application Procedure PMA Approval

and Implementation
Permit Indonesian Notary

Tax Office:

BKPM: Tax Registration Code Number

(NPWP)
1. Limited Importer License
(APIT) Ministry of Justice and Human
2. Manpower Plan Approval Rights Regency / Municipality Level:
(RPTKA/TA.01)
Article of Association 1. Location Permit
3. Custom Approval Letter
(Master list for Capital 2. Land Title
Goods) 3. Building Construction Permit
4. Custom Approval Letter (IMB)
(Master list for Raw 4. Nuisance Act Permit (HO/UUG)
Material)
BKPM (Permanent Business
License/IUT)

Commercial production

INVESTMENT COORDINATING BOARD 9

 Invest in Indonesia

INVESTMENT COORDINATING BOARD 10