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Analysing Indonesia’s Foreign Direct Investment Policy Framework

Author

Listed:
  • Prasetyono, Pipin
  • Wibowo, Agung

Abstract

Possessing several location advantages, Indonesia has been acknowledged as one of potential foreign direct investment (FDI) destinations in Asia. Not only rely upon its location advantages to attract foreign investors, but a country also needs a framework consists of regulations and policies designed to enhance the investment climate. Indonesia already has an investment framework which is mainly derived from Law 25/2007 on Investment which mainly regulates principles, policies and procedures to invest in Indonesia, both for domestic and foreign investment. This paper attempts to analyse Indonesia’s FDI policy framework which includes core FDI policy, supplementary policy and outer-ring policy based on relevant literature. This paper concludes that Indonesia’s FDI policies are effective to attract FDI even though there are rooms for improvement.

Suggested Citation

  • Prasetyono, Pipin & Wibowo, Agung, 2016. "Analysing Indonesia’s Foreign Direct Investment Policy Framework," MPRA Paper 97784, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:97784
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    File URL: https://mpra.ub.uni-muenchen.de/97784/1/MPRA_paper_97784.pdf
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    References listed on IDEAS

    as
    1. J. Thomas Lindblad, 2015. "Foreign Direct Investment In Indonesia: Fifty Years Of Discourse," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(2), pages 217-237, August.
    2. Christian Bellak & Markus Leibrecht & Jože P. Damijan, 2009. "Infrastructure Endowment and Corporate Income Taxes as Determinants of Foreign Direct Investment in Central and Eastern European Countries," The World Economy, Wiley Blackwell, vol. 32(2), pages 267-290, February.
    3. International Monetary Fund, 2012. "Philippines: Technical Assistance Report on Road Map for a Pro-Growth and Equitable Tax System," IMF Staff Country Reports 2012/060, International Monetary Fund.
    4. Lipsey, Robert E. & Sjöholm, Fredrik, 2010. "FDI and Growth in East Asia: Lessons for Indonesia," Working Paper Series 852, Research Institute of Industrial Economics.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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