Legal Issues Regarding Foreign Investment and the Implementation of the Japan-Indonesia Economic Partnership Agreement

Abstract

The entry into force of the Japan-Indonesia Economic Partnership Agreement on July 1, 2008, is highly expected to boost Japan's investment in Indonesia due to the fact that it is the most comprehensive bilateral agreement between the two countries. The JIEPA covers most areas of economic cooperation, including: taxation, trade in goods, trade in services, movement of natural persons, government procurement, intellectual property, investment etc. Some potential legal issues are anticipated during the implementation of the JIEPA due to some differences between the JIEPA and the Indonesian legal system. This article focuses on issues related to foreign investment related law, namely: instrument of ratification and its legal implications; review mechanism; legal certainty; continuation of business activities; termination of business activities; protection and guarantee of foreign investment such as minimum standard of treatment; investment risks; and disputes settlement mechanism.