ABSTRACT
Indonesia’s legal framework on investment follows a basic structure stipulated in and governed by laws and regulations currently enforced in the country. Based on the currently enforced legal structure regulating investment practices in Indonesia and despite progressive legal reform provided by Law No. 25, restrictions on foreign investment are generally derived from the mandates, norms, and provisions of Article 33 of the State Constitution. Other specific industries are also regulated differently, for example, in downstream and upstream oil and gas sectors. Investments in these areas are regulated and governed by other government authorities beyond Law No. 25, which means beyond the authority of the Investment Coordinating Board. Law No. 25 on investment stipulates categorical restrictions on foreign investment in Indonesia. Based on Law No. 10 on the formulation of laws and regulations, the legal framework, in order of hierarchy, is as follows: State Constitution, laws and the government regulations in lieu of law, government regulations, presidential regulations, and regional regulations.
