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The rate of investment in Medan, Indonesia has significantly grown due to its conducive business environment and abundant resources. Investment law in Medan operates under the regulatory framework of the Indonesian Investment Coordinating Board (BKPM), which oversees both domestic and foreign investments. Investors need to be familiar with the Negative Investment List that outlines sectors which are either entirely closed or conditionally open to foreign investments.
Navigating investment laws in an international setting such as Medan can be complex. Engaging a lawyer can be beneficial in a number of scenarios. For instance, when starting an enterprise, a lawyer familiar with the investment climate in Medan can guide you through the registration process ensuring compliance with local laws. They can also negotiate contracts and handle any potential disputes or litigations. Additionally, lawyers could help monitor developments in legislative and regulatory changes that could affect your investments.
Key aspects of local investment laws in Medan encompass foreign ownership limitations outlined in the Negative Investment List, capital requirement regulations for foreign investments, regulatory requirements like obtaining the principle license from the BKPM before starting a business, and understanding the local aspects of Indonesia's decentralization policy that brings in the provincial and municipal governments into the investment regulation process.
Foreign ownership of land is closely regulated in Indonesia. While foreigners are not allowed to hold land freehold, they can get a ‘Right To Build’ or ‘Right To Use’ contract.
Sectors closed to foreign investments are defined in the Negative Investment List (DNI). These include certain sectors in agriculture, marine and fisheries, energy and mineral resources, forestry, and telecommunication to name a few.
BKPM's Online Single Submission (OSS) system allows investors to apply for the necessary permits and licenses to start business operations in Medan, Indonesia.
Yes, as per BKPM regulation, the minimum capital requirement for foreign direct investment does not include land and buildings and must at least be IDR 10 billion (~700,000 USD) per business field.
Indonesia, including Medan, offers various incentives to investors such as tax allowances, tax holidays, and custom and excise relief depending on the sector of investment and its alignment with the country's development goals.
For additional resources, investors can visit the BKPM's website for updated regulations and procedures, including an online system for investment licensing. The Indonesian Ministry of Trade and the Indonesian Ministry of Finance also provide various resources and up-to-date information on trading and tax respectively.
If you require legal help in investment in Medan, consider seeking a legal consultation with a lawyer experienced in Indonesian investment law. They can provide the necessary guidance and assistance to ensure your investment processes run smoothly and are in compliance with the Indonesian law.
