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Economic Outlook and Improving Investment Climate
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The Government of the Republic of Indonesia held group luncheon presentation at Imperial Hotel Tokyo on May 8, 2007. The opening remarks were presented by H.E. Dr. Jusuf Anwar, Ambassador of the Republic of Indonesia and Mr. Yuji Shirakawa, Chairman Nikko Citigroup Limited.

Dr. Anggito Abimanyu, Head of Fiscal Policy Office, Ministry of Finance presented “Economic outlook and improving Investment Climate”. He explained “Recently Approved Investment Law – Supportive Climate for Investment” to fifty Japanese Investors.

A. Equal legal status
1. Equal status and treatment to domestic and foreign investors

B. Investors’ protection
2. Protection against nationalization and any exploration, as must be based on law and compensated at market prices
3. Guaranteeing the right to repatriate earnings in foreign currency
4. Omission of the forced divestiture and limited duration of foreign investment under 1967 Foreign Investment Law

C. Dispute resolution
5. Binding international arbitration in the event of dispute between the government and foreign investors

D. Negative list
6. All business activities open to investment unless explicitly close/restricted
7. A transparent investment negative list based on standard industrial classifications to be issues as a single Presidential Regulation

E. Property rights
8. Stronger property rights (e.g. land use rights for investor of up to 95 years)

F. Immigration procedures
9. Allowing expatriate to be granted two years residence permits with multiple entry visas
10. The Residence permits to be turned into a permanent residence permit for living in Indonesia continuously for more than two years

G. Tax incentives
11. Special tax incentives for certain types of investment under certain conditions. For e.g. : tax holidays for pioneer industries, income tax reductions, exemption of import duty and VAT for capital goods and raw materials, accelerated depreciation and reduced property tax.
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