The Impact of Perppu 2/2022 on Investments
07 February 2023

Generally, amendments of Law 25/2007 on Investment (“Investment Law”) made in Law 11/2020 on Job Creation (“Job Creation Law”) are aimed at improving the investment ecosystem in Indonesia. The importance of investment (both originating from domestic and foreign investors) itself rises from the urgency of accelerating national economic development as well as realization of Indonesia’s politics and economic sovereignty. Through Job Creation Law, the government also encourages investment by promoting ease of business licensing for investors.


Following the enactment of Job Creation Law, there have been several changes to the Investment Law, in the aspects of enforceability, business fields that are closed to investment, investment development for Micro, Small and Medium Enterprises (“MSMEs”) and cooperatives. The table below presents the existing comparison matrix regarding the Investment Law:



Subsequent to the existence of Perppu 2/2022 which revokes the Job Creation Law, the aspects above concerning the content of Investment Law remains unchanged. Nonetheless, at the time Perppu 2/2022 come into force, some investment-related provisions in relation to Investment Management Institution, Risk Based Business Licensing, and Simplification of Basic Business Licensing Requirements are affected, as presented on the table below:



As described above, there are substantial changes made regarding sanctions for non-compliance to government spatial plan. However, predominantly, the adjustments in the Perppu 2/2022 are in the form of changes in nomenclature as well as changes in the arrangement of provisions and article references.


Should there be any queries related to this regulation or to find out if this affects your business or personal interest, please do not hesitate to contact us.


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