Foreign investment is an effort to advance the country’s economy. In addition, foreign investment is an important part of economic diplomacy. The government implements an economic strategy by investing abroad.
Indonesian foreign investment aims at expanding the market for Indonesian products and services and helping increase national economic growth. To carry out this strategy, a regulation is issued to regulate the protection, facilities, and recording of Indonesian foreign investment. This regulation is the Minister of Foreign Affairs Regulation No. 10/2022 on the Protection, Facilitation, and Recording of Indonesian Foreign Investment.
Article 2 stipulates that in carrying out economic diplomacy related to Indonesian foreign investment, the ministry and Indonesian representatives carry out activities in the form of protection, facilitation and documentation.
Protection can be given to any Indonesian foreign investor who requests assistance from the ministry or Indonesian representative abroad. Protection will be provided by Indonesian representatives abroad and organizational units that oversee the region, recipient country or working area that is the destination of Indonesian foreign investment. The forms of protection are:
- investment assistance and advocacy
- reporting on the implementation of projects that will and have been running in the recipient country
- other forms of protection in accordance with the provisions of Indonesian national law and local investment law.
Protection is provided by taking into account several principles as follow:
- promoting the involvement of the responsible or authorized party in accordance with the provisions of laws and regulations
- does not take over the criminal or civil responsibility of Indonesian investors
- in accordance with the provisions of local laws and regulations and international laws and customs.
Every activity to protect Indonesian foreign investors will be reported by Indonesian representative abroad to the ministry. The report is also submitted to the ministry/agency in charge of investment affairs and other relevant ministries/agencies. Protection activities of a general nature may also be published for dissemination purposes.
Facilitation is given to every Indonesian foreign investor. This facilitation is given for the purpose of:
- opening of new investment activities
- expansion of investment activities
- establishment of joint venture
- preparation and completion of contracts for infrastructure and other strategic industries.
Facilitation is in the form of services by Indonesian representatives abroad and organizational units in charge of the region, recipient country or working area that is the destination of Indonesian investment abroad. The forms of facilitation provided are as follows:
- provision of general information on geography, economic and legal conditions and regulations of the country of destination of Indonesian foreign investment
- information on the potential and opportunities for Indonesian foreign investment
- submission of a review of investment barriers in the recipient country.
- investment promotion and match making.
- meeting arrangement with relevant parties in the recipient country
- investment assistance to Indonesian businesses facing investment realization problems in recipient countries.
The form of facilitation services by the ministry can be developed in accordance with the provisions of laws and regulations. The facilitation is a joint effort to shape national business actors into international business actors.
Each facilitation activity will be reported by the Indonesian representative abroad to the ministry. This reporting is also submitted to the ministry/agency that organizes investment affairs and other relevant ministries/agencies. Similar to the previous regulation, public facilitation activities can also be published for dissemination purposes.
Documentation is carried out by Indonesian representatives abroad and organizational units in charge of the region, recipient country or working area that becomes the destination of Indonesian investment abroad. The purposes of the documentation are:
- to compile, maintain and analyze statistical data on Indonesian investment abroad
- to identify opportunities and obstacles to trade and investment in the recipient country and working area
- to prepare recommendation materials for the strategy and formulation of foreign policy to conduct economic diplomacy
- other purposes in accordance with the provisions of laws and regulations.
This form of documentation is in the form of identification, sorting of data and information and updating data and information. The documentation will be set out in a dashboard (a recording platform that uses an information technology system to process Indonesian investment data and information). If there is an Indonesia Investment Promotion Center in the recipient country, then the documentation is done under the coordination of the head of Indonesian representation abroad.
Identification of data and information is carried out by looking at the sources of financing that support Indonesian foreign investment abroad, including financial resources from financial institutions that provide support in the form of financing schemes or investment guarantee schemes for Indonesian foreign investment. This activity includes mapping the potential and opportunities for Indonesian investment abroad.
Updating data and information on the dashboard will be carried out periodically and continuously by representatives and organizational units in charge of the region, recipient country or working area that is the destination of Indonesian foreign investment. To support the dashboard, every Indonesian foreign investor is obliged to report the Indonesian foreign investment to the Indonesian representative in the recipient country.