Dynamics of Foreign Investment Law in Indonesia

Abstract

This study examines the dynamics of foreign investment law in Indonesia, focusing on two main issues: legal uncertainty and the challenges of harmonizing regulations with international standards in the era of globalization. Legal uncertainty in Indonesia often arises from unexpected regulatory changes, overlapping regulations between the central and regional governments, and inconsistencies in law enforcement. This creates an environment that is less conducive to foreign investors, reducing Indonesia's attractiveness as an investment destination. In addition, the challenges of legal harmonization involve difficulties in aligning domestic regulations with the provisions of bilateral investment treaties and free trade agreements, as well as the application of international arbitration. Although Indonesia has taken steps to align its domestic laws with global standards, there are still inconsistencies in implementation that affect the investment climate. This study suggests the need for comprehensive legal reform, capacity building of law enforcement institutions, and active involvement in international forums to create a stable and competitive investment climate.