Juridical Analysis Of Granting Business Rights To Foreign Companies In The Form Of A Joint Venture After Law Number 25 Of 2007 Concerning Investment

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Juridical Analysis of Granting Business Rights to Foreign Companies in the Form of a Joint Venture after Law Number 25 of 2007 Concerning Investment

Introduction

The granting of business rights (HGU) to foreign companies in the form of a joint venture is a crucial aspect of Indonesia's investment policy, particularly after the enactment of Law Number 25 of 2007 concerning Investment. This law has undergone significant changes and has been tested at the Constitutional Court, leading to the issuance of the Head of the National Land Agency Number 2 of 2013. This regulation requires foreign companies to partner with domestic investors (PMDN) in the form of joint ventures, in accordance with applicable regulations in Indonesia. This article provides a comprehensive juridical analysis of the granting of business rights to foreign companies in the form of a joint venture after Law Number 25 of 2007 concerning Investment.

Background

The granting of business rights to foreign companies in the form of a joint venture is a complex issue that involves various stakeholders, including the government, foreign companies, and domestic investors. The Head of the National Land Agency Number 2 of 2013 regulates the procedure for granting HGU to foreign companies, which includes the requirement for foreign companies to have Indonesian legal entities or limited liability companies and to do a joint venture with PMDN in accordance with applicable regulations. This regulation aims to balance the interests of foreign companies and domestic investors, while also ensuring that the granting of HGU is carried out in a transparent and accountable manner.

Juridical Analysis

This study uses a normative and prescriptive juridical approach, which means analyzing phenomena, facts, legal aspects, and legal efforts related to the provision of HGU to foreign companies in the form of joint venture after the enactment of Law Number 25 of 2007 concerning Investment. The juridical analysis of this study focuses on the following aspects:

  • Procedure for giving HGU: The procedure for giving HGU is regulated in the Regulation of the Head of the National Land Agency. Prospective recipients of HGU, namely foreign companies, must first have Indonesian legal entities or limited liability companies and are required to do a joint venture with PMDN in accordance with applicable regulations.
  • Benefits and Impacts: Although this rule regulates the mechanism of giving HGU to foreign companies, it is essential to consider the benefits and impact on the community. The Head of the National Land Agency and related agencies need to evaluate whether the provision of HGU really gives welfare to the people.
  • Additional Analysis: This study also conducts an additional analysis of the problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture. The problems and challenges include limited access to PMDN, domination of foreign companies, and information disclosure.

Procedure for Giving HGU

The procedure for giving HGU is regulated in the Regulation of the Head of the National Land Agency. Prospective recipients of HGU, namely foreign companies, must first have Indonesian legal entities or limited liability companies and are required to do a joint venture with PMDN in accordance with applicable regulations. The procedure for giving HGU involves the following steps:

  1. Submission of Request: Foreign companies as applicants must submit written requests to the Head of the Land Office by attaching personal data and HGU requests.
  2. Processing of Request: After receiving a request, the Head of the National Land Agency Office processes the issuance of the HGU Decree and submit it to the applicant.
  3. Payment of Income Money: The applicant is then required to immediately fulfill the obligation in the form of payment of income money to the state and the acquisition fee for land and building rights.

Benefits and Impacts

Although this rule regulates the mechanism of giving HGU to foreign companies, it is essential to consider the benefits and impact on the community. The Head of the National Land Agency and related agencies need to evaluate whether the provision of HGU really gives welfare to the people. The benefits of granting HGU to foreign companies in the form of a joint venture include:

  • Encouragement of Investment: The granting of HGU to foreign companies in the form of a joint venture can encourage investment and economic growth.
  • Protection of National Interests: The regulation of the Head of the National Land Agency Number 2 of 2013 ensures that foreign companies partner with domestic investors (PMDN) in the form of joint ventures, which protects national interests.
  • Promotion of Economic Growth: The granting of HGU to foreign companies in the form of a joint venture can promote economic growth and development.

Additional Analysis

This study also conducts an additional analysis of the problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture. The problems and challenges include:

  • Limited Access to PMDN: Possible PMDN has limited access to capital and technology owned by foreign companies.
  • Domination of Foreign Companies: Potential dominance of foreign companies in joint ventures, which can hamper local economic growth.
  • Information Disclosure: There is a need for transparency in the process of giving HGU so that the public can monitor and assess the impact.

Solutions and Recommendations

To address the problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture, this study recommends the following solutions and recommendations:

  • Strengthening the Role of PMDN: The government needs to provide incentives and support to PMDN to be able to compete with foreign companies.
  • Increasing Transparency: The process of giving HGU must be carried out transparently and accountably, by involving the public and involving supervisory institutions.
  • Periodic Evaluation: The government needs to conduct periodic evaluations of the HGU policy to ensure its effectiveness and justice.

Conclusion

In conclusion, the granting of business rights to foreign companies in the form of a joint venture is a complex issue that involves various stakeholders, including the government, foreign companies, and domestic investors. The regulation of the Head of the National Land Agency Number 2 of 2013 ensures that foreign companies partner with domestic investors (PMDN) in the form of joint ventures, which protects national interests. However, this also needs to be balanced with the protection of national interests and people's welfare. Increasing transparency, active role of PMDN, and periodic evaluation is the key to maximizing benefits and minimizing the risks of this policy.
Frequently Asked Questions (FAQs) on Juridical Analysis of Granting Business Rights to Foreign Companies in the Form of a Joint Venture after Law Number 25 of 2007 Concerning Investment

Q: What is the purpose of Law Number 25 of 2007 concerning Investment?

A: The purpose of Law Number 25 of 2007 concerning Investment is to regulate investment in Indonesia and to provide a conducive business environment for both domestic and foreign investors.

Q: What is the Head of the National Land Agency Number 2 of 2013?

A: The Head of the National Land Agency Number 2 of 2013 is a regulation that regulates the procedure for granting business rights (HGU) to foreign companies in the form of a joint venture.

Q: What are the requirements for foreign companies to receive HGU?

A: Foreign companies must have Indonesian legal entities or limited liability companies and are required to do a joint venture with domestic investors (PMDN) in accordance with applicable regulations.

Q: What is the procedure for giving HGU to foreign companies?

A: The procedure for giving HGU to foreign companies involves the following steps:

  1. Submission of Request: Foreign companies as applicants must submit written requests to the Head of the Land Office by attaching personal data and HGU requests.
  2. Processing of Request: After receiving a request, the Head of the National Land Agency Office processes the issuance of the HGU Decree and submit it to the applicant.
  3. Payment of Income Money: The applicant is then required to immediately fulfill the obligation in the form of payment of income money to the state and the acquisition fee for land and building rights.

Q: What are the benefits of granting HGU to foreign companies in the form of a joint venture?

A: The benefits of granting HGU to foreign companies in the form of a joint venture include:

  • Encouragement of Investment: The granting of HGU to foreign companies in the form of a joint venture can encourage investment and economic growth.
  • Protection of National Interests: The regulation of the Head of the National Land Agency Number 2 of 2013 ensures that foreign companies partner with domestic investors (PMDN) in the form of joint ventures, which protects national interests.
  • Promotion of Economic Growth: The granting of HGU to foreign companies in the form of a joint venture can promote economic growth and development.

Q: What are the problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture?

A: The problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture include:

  • Limited Access to PMDN: Possible PMDN has limited access to capital and technology owned by foreign companies.
  • Domination of Foreign Companies: Potential dominance of foreign companies in joint ventures, which can hamper local economic growth.
  • Information Disclosure: There is a need for transparency in the process of giving HGU so that the public can monitor and assess the impact.

Q: What are the solutions and recommendations to address the problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture?

A: The solutions and recommendations to address the problems and challenges associated with the granting of HGU to foreign companies in the form of a joint venture include:

  • Strengthening the Role of PMDN: The government needs to provide incentives and support to PMDN to be able to compete with foreign companies.
  • Increasing Transparency: The process of giving HGU must be carried out transparently and accountably, by involving the public and involving supervisory institutions.
  • Periodic Evaluation: The government needs to conduct periodic evaluations of the HGU policy to ensure its effectiveness and justice.

Q: What is the conclusion of this study?

A: In conclusion, the granting of business rights to foreign companies in the form of a joint venture is a complex issue that involves various stakeholders, including the government, foreign companies, and domestic investors. The regulation of the Head of the National Land Agency Number 2 of 2013 ensures that foreign companies partner with domestic investors (PMDN) in the form of joint ventures, which protects national interests. However, this also needs to be balanced with the protection of national interests and people's welfare. Increasing transparency, active role of PMDN, and periodic evaluation is the key to maximizing benefits and minimizing the risks of this policy.