Mar 30, 2007, 3:15 GMT
Jakarta - Indonesia's parliament has passed a new investment bill as part of an effort to improve the investment climate to lure foreign investors to the country, local media reports said Friday.
The new bill, was endorsed on Thursday by the House of Representatives and has to be signed by the president to become law, offers a host of incentives such as tax breaks, duty cuts and land access for investment in several sectors, including mining and energy.
The new bill will replace the current investment law, which was enacted in 1967.
The bill is the latest in a series of measures taken by the Indonesian government to attract foreign investors as the country desperately needs investment to propel growth.
On property rights, the maximum duration of land cultivation rights under the new law is extended from 35 years at present to 95 years, and building rights from 50 to 80 years.
Land usage rights, the length of which used to be determined by local administrations, are now acquirable for a maximum period of 70 years under the law.
Under the law, fiscal incentives such as tax reductions, tax breaks and tax deferments are to be further provided for foreign investors via government regulations. Foreign investors are also allowed to repatriate their capital.
Indonesia's foreign investment has been falling and many investors say graft, red tape, an unfriendly bureaucracy, tough labour laws and an unreliable legal system make the country a poor choice compared with some regional rivals.
Last year, actual foreign direct investment plunged to 5.98 billion dollars from 8.91 billion dollars in 2005, although FDI approvals were up to 15.62 billion dollars from 13.58 billion dollars.
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