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Procedure to Invest in Indonesia

Procedure to Invest in Indonesia

Procedure to Invest in Indonesia – Investment or investment is a second component that determines the level of aggregate expenditure. Savings from the household sector through the institution of financial institutions will flow into a corporate sector, if entrepreneurs use the money to buy capital goods, then the expenditure is called investment.

These investments have different types. For entrepreneurs who want to make this investment, it must follow the procedure to invest in Indonesia. Furthermore, will be discussed various types, objectives, benefits, and procedures that must be done.

  1. Types of Investment in Indonesia

This type of investment can be differentiated by its assets, which is an investment classification in terms of capital or wealth aspects. The types of these investments are:

  • Real Asset which is an investment in form; such as buildings, vehicles and others.
  • Financial Assets which are documents or letters of indirect claim from the holder to a real activity of the issuer of such securities. The next type of investment is based on its influence. This type of investment is an investment based on a factor that influences or does not affect an investment activity. Some types of these investments are:
  • Autonomous Investment which is an investment that is speculative and not influenced on income level. Examples such as the purchase of securities.
  • Induced investment which is an investment that is influenced by an increase in demand for goods and services and in income level. An example of this investment is transitory income, which is an income earned apart from work, such as interest and so forth.
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The next type of investment is based on the source of its financing. This type of investment is based on a derived investment origin. There are two kinds of investments of this type namely, Investment with foreign capital sources and investment with domestic sources. The next type of investment is based on its shape or how to invest the necessary capital. This type of investment between traffic:

  • Porto polio Investment is an investment made through the capital market with securities instruments, such as bonds and stocks.
  • Direct investment is a form of investment that is done by building, buying a total, or acquiring a company.

This type of investment in Indonesia is very diverse. For entrepreneurs can choose the appropriate type of investment. Before knowing the procedure to invest in Indonesia, then better understand first about the purpose and benefits of investment.

  1. Investment Objectives and Benefits

Benefits and objectives in making investments are as follows:

  • To obtain a fixed income in each period.
  • To establish a special fund, such as funds for an expansionary interest.
  • To control another company, through the ownership of a portion of the equity of a company.
  • To ensure the availability of raw materials and to obtain market for the products produced.
  • To reduce competition among similar companies.
  • Maintain good relationships between companies.
  • Potential for long-term earnings
  • Can surpass inflation
  • Provide a fixed income
  • Adjusting a change of needs
  • Can invest according to your financial circumstances
  1. Procedure to invest in Indonesia

The first thing to do when wanting to invest is to apply. However, before filing various application files, the investor must first complete the necessary conditions. Requirements required for the Investment Coordinating Board are as follows:

  • Company Deed
  • Photocopy of Identity Card for individuals
  • Photocopy of Taxpayer Identification Number
  • Production process or business activity
  • Power of Attorney if not signed by the Board of Directors
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Meanwhile, the conditions required for Foreign Investment are as follows:

  • Certificate of incorporation establishment
  • photocopy of passport if an individual
  • Photocopy of Tax Registration Number of Foreign Investment Company
  • Power of Attorney
  • Explanation of production process or business activity undertaken

Furthermore, you can apply for an Investment Request at the Indonesian Representative Office abroad. Investment Coordination at the central level, Provincial Investment Board, and Investment Institution in regency or city. Potential investors may choose to apply for an investment proposal in one of these places.

Furthermore, the proposal will be reviewed from various aspects. Once a proposal is approved by an overseas Indonesian Representative, the Head of the Investment Coordinating Board or the Head of the Capital Investment Board, the investment approval will be issued. To manage licensing at the central level, the procedures to be performed are as follows:

  1. Letter of Approval of Investment. For investors Foreign Investment must have an investment value of up to US $ 100 million.
  2. Presidential Approval Letter, followed by the issuance of Notice of Presidential Approval specifically for investors in the framework of Foreign Investment with an investment value greater than US $ 100 million.
  3. Letter of Approval of Facility Provision on Import of Capital Goods for granting facilities on importing equipment
  4. Limited Importer’s Identification Number to import capital goods and raw materials needed.
  5. Foreign Workers’ Use Plan for the use of foreign workers.
  6. Permanent Business License.
  7. Investors must also fulfill the required file at the provincial level, among others; Investment Approval Letter, Approval Letter of Facility for Importing Capital Goods / Raw Material, Limited Importer Identification Number, Foreign Workers Use Plan, Permanent Business License, and Foreign Worker Permit.
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Hopefully a brief explanation of the procedure to invest in Indonesia can help potential investors who want to do business in Indonesia.

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