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Foreign Direct Investment in Indonesia Foreign Direct Investment in Indonesia Indonesia has been a very attractive market for the foreign investors since its time of independence A number of foreign companies most of them large multinationals have invested in the Indonesian market in certain areas These companies have contributed a lot in the development of the countrys resources building infrastructure establishing manufacturing facilities for export andor provide products and services for the domestic market The Indonesian market is a very hot perspective for investment and there are numerous opportunities available for setting up a company The government of Indonesia itself is quiet interested in inviting new foreign companies and attracting more and more investments in the country This policy had been adopted by the Indonesian government from the very beginning and therefore it has taken several measures in this regard To encourage the foreign direct investment in the country the Indonesian government introduced the Foreign Investment Law No 11967 in the year 1967 However this legislation excluded oil and gas banking insurance and leasing sectors This law provided a number of incentives to the investors such as tax exemptions and some guarantees Though in the beginning the Indonesian government adopted an open door policy but in later years they changed their strategy In the year 1970 some of the sectors were closed for foreign direct investments In the coming years these policies were made further strict because of the protest from the public on the over presence of Japanese investors After these restrictions the foreign investors were required by law to invest their capital with a local partner in the form of joint venture The restrictive regulations also had the aim to speed up the process of transfer of shares to the Indonesian partners of investors However in the later years the end of oil boom and other crisis forced the Indonesian government to deregulate the economy and to
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