I. Introduction
Indonesia is a country with significant investment potential for both domestic and foreign investors. The government provides opportunities for investors to invest in various business sectors to drive economic growth and create jobs.
However, all investment activities must be conducted in accordance with applicable laws to ensure legal certainty and protection for investors.
II. Legal Basis
Several legal provisions that serve as the foundation for investment in Indonesia include:
Law No. 25 of 2007 on Investment.
Law No. 6 of 2023 on Job Creation.
Government Regulation No. 5 of 2021 on Risk-Based Business Licensing, along with its amendments and implementing regulations.
Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021, on Investment Business Sectors.
Laws and regulations regarding taxation and sector-specific provisions applicable to the relevant business sector.
III. Legal Analysis and Opinion
In principle, investment in Indonesia is a lawful activity protected by law as long as it is conducted in accordance with applicable laws and regulations.
To ensure investment security, prospective investors should consider the following legal aspects:
Business Legality: Ensuring that the business entity has the appropriate legal form and permits through the OSS (Online Single Submission) system.
Investment status: Verify whether the investment is made by a domestic investor (PMDN) or a foreign investor (PMA), including the requirement to establish a PT PMA if necessary.
Legal certainty of assets: Verify the validity of ownership of land, buildings, corporate documents, and the source of investment funds.
Investment agreement: Drafting a written agreement governing rights, obligations, profit sharing, liability, and dispute resolution mechanisms.
Tax compliance: Ensuring that all tax obligations are fulfilled in accordance with applicable regulations.
Investor protection: Conducting legal due diligence before contributing capital or entering into an investment transaction.
Please note that effective June 5, 2025, risk-based business licensing provisions are governed by Government Regulation No. 28 of 2025, which replaces Government Regulation No. 5 of 2021.
IV. Conclusion
Investing in Indonesia is, in principle, safe and legally protected provided it is conducted through legitimate, transparent mechanisms and complies with all applicable licensing requirements and legal provisions.
Investors should not focus solely on financial gains but must also prioritize legal certainty, corporate legality, the validity of assets, and protection of invested capital.
V. Legal Recommendations
Before making an investment, it is strongly recommended that investors engage the services of a legal consultant or attorney to conduct a legal due diligence review, draft investment agreements, and ensure that the entire transaction process does not conflict with Indonesian law.
Legal Note
This legal opinion is of a general nature and must be tailored to the specific business sector, investment structure, and status of the investor in question.
A safe investment is not merely a profitable one, but one that is grounded in legal principles, legal certainty, and legal protection.
If needed, I can assist in drafting a more professional version of this legal opinion specifically regarding investments by foreign investors (non-Indonesian nationals) in Indonesia and Bali.
