Indonesian Investment Law 2007

Passed by the House of Representatives on March 29, 2007Signed into Law Number 25 of 2007 by the President on April 26, 2007Promulgated on April 26, 2007 in State Gazette Number 67 of 2007, and Supplement to State Gazette Number 4724

UNDANG-UNDANG REPUBLIK INDONESIANOMOR 25 TAHUN 2007TENTANGPENANAMAN MODALLAW OF THE REPUBLIC OF INDONESIANUMBER 25 OF 2007CONCERNINGINVESTMENTS

Pasal / Article(s)

BAB I: KETENTUAN UMUM

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CH. I: GENERAL PROVISIONSBAB II: ASAS DAN TUJUAN

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CH. II: PRINCIPLES AND PURPOSESBAB III: KEBIJAKAN DASAR PENANAMANMODAL

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CH. III: MAJOR INVESTMENT POLICIESBAB IV: BENTUK BADAN USAHA DANKEDUDUKAN

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CH. IV: FORMS OF BUSINESS ENTITY ANDDOMICILEBAB V: PERLAKUAN TERHADAP PENANAMANMODAL

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CH. V: TREATMENT AGAINST INVESTMENTSBAB VI: KETENAGAKERJAAN

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CH. VI: LABORBAB VII: BIDANG USAHA

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CH. VII: BUSINESS SECTORSBAB VIII: PENGEMBANGAN PENANAMANMODAL BAGI USAHA MIKRO, KECIL,MENENGAH, DAN KOPERASI

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CH. VIII: ENHANCEMENT OF INVESTMENTS INMICRO, SMALL AND MEDIUMENTERPRISES, AND COOPERATIVESBAB IX: HAK, KEWAJIBAN, DAN TANGGUNGJAWAB PENANAM MODAL

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CH. IX: RIGHTS, OBLIGATIONS, ANDRESPONSIBILITIES OF INVESTORSBAB X: FASILITAS PENANAMAN MODAL

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CH. X: INVESTMENT FACILITIESBAB XI: PENGESAHAN DAN PERIZINANPERUSAHAAN

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CH. XI: COMPANY VALIDATION ANDLICENSINGBAB XII: KOORDINASI DAN PELAKSANAANKEBIJAKAN PENANAMAN MODAL

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CH. XII: COORDINATION ANDIMPLEMENTATION OF INVESTMENTPOLICIESBAB XIII: PENYELENGGARAAN URUSANPENANAMAN MODAL

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CH. XIII: ADMINISTRATION OF INVESTMENTAFFAIRSBAB XIV: KAWASAN EKONOMI KHUSUS

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CH. XIV: SPECIAL ECONOMIC ZONESBAB XV: PENYELESAIAN SENGKETA

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CH. XV: DISPUTE SETTLEMENTSBAB XVI: SANKSI

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CH. XVI: SANCTIONSBAB XVII: KETENTUAN PERALIHAN

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CH. XVII: TRANSITIONAL PROVISIONSBAB XVIII: KETENTUAN PENUTUP

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CH. XVIII: CONCLUDING PROVISIONS

Translated and annotated by Wishnu Basuki (ABNR)Updated: May 9, 2007

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UNDANG-UNDANG REPUBLIK INDONESIANOMOR 25 TAHUN 2007TENTANGPENANAMAN MODALLAW OF THE REPUBLIC OF INDONESIANUMBER 25 OF 2007CONCERNINGINVESTMENTSDENGAN RAHMAT TUHAN YANG MAHA ESA BY THE GRACE OF GOD ALMIGHTYPRESIDEN REPUBLIK INDONESIA, THE PRESIDENT OFTHE REPUBLIC OF INDONESIA,

Menimbang:a. bahwa untuk mewujudkan masyarakat adil danmakmur berdasarkan Pancasila dan Undang-Undang Dasar Negara Republik Indonesia Tahun1945 perlu dilaksanakan pembangunan ekonominasional yang berkelanjutan denganberlandaskan demokrasi ekonomi untuk mencapai tujuan bernegara;Considering:a. that to realize a just and prosperous society thatis based on Pancasila and the 1945 Constitutionof the State of the Republic of Indonesia, it isnecessary to make sustainable national economicdevelopment founded on economic democracy inpursuit of the state’s goals;b. bahwa sesuai dengan amanat yang tercantumdalam Ketetapan Majelis PermusyawaratanRakyat Republik Indonesia NomorXVI/MPR/1998 tentang Politik Ekonomi dalamrangka Demokrasi Ekonomi, kebijakanpenanaman modal selayaknya selalu mendasariekonomi kerakyatan yang melibatkanpengembangan bagi usaha mikro, kecil,menengah, dan koperasi;b. that consistent with the mandate seth forth inDecree of the People’s Consultative Assembly of the Republic of Indonesia NumberXVI/MPR/1998 concerning Economic Policy inthe context of Economic Democracy, investmentpolicies should at all times underlay the people’seconomy that commits itself to the enhancementof micro, small and medium enterprises, andcooperatives;c. bahwa untuk mempercepat pembangunanekonomi nasional dan mewujudkan kedaulatanpolitik dan ekonomi Indonesia diperlukanpeningkatan penanaman modal untuk mengolahpotensi ekonomi menjadi kekuatan ekonomi riildengan menggunakan modal yang berasal, baik dari dalam negeri maupun dari luar negeri;c. that to accelerate national economic developmentand to realize Indonesian political and economicsovereignty it is necessary to step up investmentsin order to turn economic potentials into realeconomic strength by use of funds derived fromboth home and abroad;d. bahwa dalam menghadapi perubahanperekonomian global dan keikutsertaanIndonesia dalam berbagai kerja samainternasional perlu diciptakan iklim penanamanmodal yang kondusif, promotif, memberikankepastian hukum, keadilan, dan efisien dengantetap memperhatikan kepentingan ekonominasional;d. that to deal with global economic changes andIndonesia’s participation in diverse internationalcooperations it is necessary to create investmentclimate to be conducive, promoting, giving legalcertainty, justice and efficiency with due regardto the interest of national economy;

Annotations in the blue box are not parts of the text of the LawThe annotations will be updated from time to time.

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e. bahwa Undang-Undang Nomor 1 Tahun 1967tentang Penanaman Modal Asing sebagaimanatelah diubah dengan Undang-Undang Nomor 11Tahun 1970 tentang Perubahan dan TambahanUndang-Undang Nomor 1 Tahun 1967 tentangPenanaman Modal Asing dan Undang-UndangNomor 6 Tahun 1968 tentang Penanaman ModalDalam Negeri sebagaimana telah diubah denganUndang-Undang Nomor 12 Tahun 1970 tentangPerubahan dan Tambahan Undang-UndangNomor 6 Tahun 1968 tentang Penanaman ModalDalam Negeri perlu diganti karena tidak sesuailagi dengan kebutuhan percepatan perkembanganperekonomian dan pembangunan hukumnasional, khususnya di bidang penanamanmodal;e. that Law Number 1 of 1967 concerning ForeignInvestments, as amended by Law Number 11 of 1970 concerning Amendments and Supplementto Law Number 1 of 1967 concerning ForeignInvestments, and Law Number 6 of 1968concerning Domestic Investments, as amendedby Law Number 12 of 1970 concerningAmendments and Supplement to Law Number 6of 1968 concerning Domestic Investments needreplacement for no longer being consistent withthe need of accelerated national economicenhancement and law development, mostnotably, in the field of investment;f. bahwa berdasarkan pertimbangan sebagaimanadimaksud dalam huruf a, huruf b, huruf c, huruf d, dan huruf e perlu membentuk Undang-Undangtentang Penanaman Modal.f. that having due regard to item a, item b, item c,item d, and item e it is necessary to make a Lawconcerning Investments.Mengingat:Pasal 4 ayat (1), Pasal 5 ayat (1), Pasal 18 ayat (1),ayat (2), dan ayat (5), Pasal 20, serta Pasal 33Undang-Undang Dasar Negara Republik IndonesiaTahun 1945;Bearing in mind:Article 4 section (1), Article 5 section (1), Article 18section (1), section (2), and section (5), Article 20,and Article 33 of the 1945 Constitution of the State of the Republic of Indonesia;

Dengan Persetujuan Bersama

DEWAN PERWAKILAN RAKYAT REPUBLIK INDONESIAdanPRESIDEN REPUBLIK INDONESIA

With the Joint Consent of:

THE HOUSE OF REPRESENTATIVES OFTHE REPUBLIC OF INDONESIAandTHE PRESIDENT OF THE REPUBLIC OF INDONESIA

MEMUTUSKAN: HAS DECIDED:Menetapkan: UNDANG-UNDANG TENTANGPENANAMAN MODAL.To enact: LAW CONCERNING INVESTMENTS.

PENJELASAN UMUM GENERAL ELUCIDATION Salah satu tujuan pembentukan pemerintahan negaraadalah untuk memajukan kesejahteraan umum. Amanat tersebut, antara lain, telah dijabarkan dalam Pasal 33 Undang-Undang Dasar Negara Republik Indonesia Tahun 1945 danmerupakan amanat konstitusi yang mendasari pembentukanseluruh peraturan perundang-undangan di bidang perekonomian. Konstitusi mengamanatkan agar pembangunanekonomi nasional harus berdasarkan prinsip demokrasi yangmampu menciptakan terwujudnya kedaulatan ekonomi Indonesia. Keterkaitan pembangunan ekonomi dengan pelakuOne of the goals of establishing state governance is to further public welfare. This mandate has been set forth, inter alia, in Article 33 of the 1945 Constitution of the State of the Republic of Indonesia, and is a constitutional mandate that underlies the making of all economic laws and regulations. TheConstitution has mandated that national economic development must be founded on the democratic principle that is capable of realizing the sovereignty of the Indonesian economy. A link between economic development and people’s economic actorshas been affirmed by Decree of the People’s Consultative