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.
© 2007 dpa - Deutsche Presse-Agentur 
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