The meeting fostered a constructive and dynamic dialogue to align around a shared objective, optimizing the inflow of foreign investment through streamlined licensing, while safeguarding immigration compliance. This issue had become increasingly critical given the high mobility of foreign investors and frequent cases of visa misuse without tangible economic contribution to Indonesia.
The outcomes of this meeting served as a strategic foundation for strengthening cross-ministerial and stakeholder coordination. The key discussion points may be summarized as follows:
BKPM’s Focus: Driving Targeted Foreign Investment with Real Impact
BKPM emphasized that its primary objective was to attract foreign investment flows by providing regulatory facilitation, procedural certainty, and clear guidance for prospective investors. However, this facilitation did not equate to unlimited acceptance. BKPM actively implemented a screening mechanism to ensure that only qualified investors, those aligned with the national investment masterplan and with a genuine long-term commitment, could contribute meaningfully to Indonesia’s economy. This also aimed to prevent “pseudo-investment” practices that often exploited investor visas without delivering substantive benefits to national development.
Furthermore, BKPM underscored that foreign investors should have a well-prepared investment plan before commencing the licensing process. Such plans had to clearly outline the project location, scale, and sector, along with preliminary coordination with Indonesian partners or stakeholders. This ensured that investments were strategically guided from the planning stage, minimizing risks of permit misuse or non-genuine investments.
Some key highlights reaffirmed by BKPM include:
- Initial Observation Stage via Pre-Investment Visa (D12): Foreign investors interested in Indonesia were not required to immediately establish a legal entity. As an initial step, they could obtain a Pre-Investment Visit Visa (D12), which allowed multiple entries within a defined period for preparatory activities such as site surveys, feasibility studies, market analysis, and meetings with potential business partners.
- Representative Stage via KPPA/KP3A: If a more permanent presence was required to deepen research and prepare business plans, investors could establish a Representative Office (KPPA) or Foreign Trade Representative Office (KP3A). These entities allowed non-commercial activities such as market studies, business exploration, and networking, serving as a strategic bridge before committing capital through a legal entity in Indonesia.
- Investor Screening through BKPM’s Promotion Division: The Promotion Division served not only as a promotional driver but also as a strategic filter for foreign investors. In addition to disseminating information on business opportunities and providing channels for coordination and assistance, the division ensured that incoming investors met national criteria and policy objectives. In this way, the facilitation provided did not merely create convenience for investment, but also directed foreign capital into priority sectors that were strategic and delivered tangible benefits to Indonesia’s economy.
Immigration: Supporting Investment While Ensuring Compliance and Economic Contribution
Responding to BKPM’s presentation, Immigration reaffirmed its support for foreign investment in Indonesia. However, such support was accompanied by supervisory functions, whereby immigration enforcement played a critical role as a filtering mechanism to ensure that only investors with genuine commitment and tangible contributions to the national economy were granted residency permits. Immigration’s primary focus was to ensure that the use of investor visas remained consistent with their intended purpose and that investment commitments were duly realized.
A key requirement highlighted was the obligation to report immigration guarantees within 90 days, as mandated under Article 196(2) of the Ministry of Law and Human Rights Regulation No. 22 of 2023. This applied to all Golden Visa holders, who were expected to have clear readiness and capital commitment. Failure to comply could result in residence permit reviews or administrative sanctions. Accordingly, Immigration emphasized the importance of thorough planning from the outset and encouraged investors to seek early consultation should they face obstacles, rather than waiting until issues arose.
Additionally, Immigration stressed its firm stance against the misuse of investment schemes, such as operating “shell companies” or using KBLI classifications inconsistent with actual business activities. Law enforcement in this area was vital to maintain a healthy, transparent, and growth-oriented investment ecosystem.
Manpower: Golden Visa and Work Permit Obligations for Expatriates
The Ministry of Manpower clarified that holding a Golden Visa did not automatically grant the right to work in Indonesia. The investor visa was designed primarily for investment purposes. If a Golden Visa holder was directly involved in operational roles—such as serving as a director, commissioner, or in day-to-day management—they still had to obtain the requisite work permits in accordance with labor regulations.
While certain technical exceptions might apply in the context of shareholding, the underlying principle remained: investor status did not replace a work permit. The Ministry further stressed that meaningful investment had to translate into tangible contributions, particularly in creating employment opportunities for local workers, promoting knowledge and technology transfer, and fostering national economic growth.
Strategic Legal Approaches for Foreign Investors in Indonesia: Insights from Murzal & Partners
Following a series of intensive inter-ministerial discussions, Murzal & Partners formulated a number of strategic approaches that foreign investors could consider in establishing a sustainable business foundation in Indonesia, in full alignment with prevailing legal and regulatory frameworks. These approaches emphasized not only legal certainty but also the importance of fostering a harmonious relationship between investors and national authorities. Key considerations included:
1. Leveraging the Pre-Investment Visa (D12) and KPPA/KP3A Schemes as an Initial Validation Stage
Thorough planning from the outset was the foundation for building a solid and sustainable investment structure. For this reason, investors were advised to utilize the Pre-Investment Visa (D12) facility to conduct feasibility studies, market exploration, and initial engagement with potential partners. For more permanent representation needs, the KPPA/KP3A scheme could be utilized to establish a legitimate non-commercial presence while maintaining flexibility before committing to the establishment of a legal entity.
This stage served as a strategic validation space, enabling investors to map out risks and requirements while avoiding regulatory conflicts during the implementation phase.
2. Avoiding Symbolic Practices and Artificial Investment Structures
In practice, it was not uncommon to encounter investment structures that appeared legally compliant on paper but carried substantial legal risks in substance. Common examples included the incorporation of foreign investment companies (PT PMA) with a nominal paid-up capital of IDR 10 billion without any real business activities, discrepancies between declared and actual capital realization, the use of virtual office addresses that did not reflect actual business operations, and the listing of KBLI codes irrelevant to the business activities being carried out.
Such practices were increasingly under scrutiny by multiple regulatory authorities and could result in serious legal consequences—including deportation of foreign nationals, suspension of business operations, and revocation of business licenses. Therefore, careful and compliant structuring of investments from the outset was no longer optional; it was a strategic necessity for any serious investor.
3. Prioritizing Proactive Reporting and Communication with Immigration Authorities
Compliance with immigration administrative requirements was an integral aspect of maintaining lawful stay permits in Indonesia. One key obligation was the immigration guarantee reporting within 90 days of the issuance of the Golden Visa, as stipulated under Minister of Law and Human Rights Regulation No. 22 of 2023.
Failure to meet this requirement not only affected administrative compliance but also risked the continuity of residence status and, in certain cases, triggered more serious legal consequences. It was therefore essential for investors to establish open, responsive, and proactive channels of communication with immigration authorities—even before potential obstacles arose in practice.
This approach not only reflected a good-faith commitment to regulatory compliance but also served as an effective risk mitigation strategy in navigating the evolving landscape of immigration oversight.
4. Conducting Periodic Compliance Reviews with Manpower Regulations
Although the Golden Visa granted long-term permits in Indonesia, it did not exempt investors from employment permit obligations if they also performed managerial or operational functions within a company. Positions as directors, commissioners, or foreign experts remained under the close supervision of the Ministry of Manpower and were therefore subject to the applicable regulations governing Foreign Workers (TKA).
Investors who intended to concurrently hold strategic roles within the company structure were thus advised to conduct regular compliance reviews of workforce arrangements and existing permits. This step was important to avoid dual interpretations of individual legal status while ensuring that the company and its management remained in a secure and protected legal position.
Early compliance not only safeguarded against potential administrative sanctions but also enhanced the credibility of investors in the eyes of regulators, local employees, and business partners in Indonesia.
5. Engaging Integrated Legal Advisors from the Pre-Investment Stage
In practice, many of the legal challenges faced by foreign investors did not stem from an intention to violate the law but rather from limited understanding of the complex and cross-sectoral regulatory framework—including investment and licensing laws, immigration regulations, labor compliance, and operational requirements.
Therefore, engaging a multidisciplinary legal team from the pre-investment stage was not merely a preventive measure but formed part of an effective business strategy. A legal advisor with comprehensive regulatory insight could assist investors in designing the business structure, expansion strategies, and administrative compliance mechanisms with precision—ensuring that each business decision is aligned with the appropriate legal framework.
This approach enabled investors to minimize potential disputes, avoid administrative violations, and strengthen the company’s legal standing from the outset. Beyond that, integrated legal support also built a crucial foundation of trust in relations with government bodies, local partners, and other stakeholders.
Conclusion: Murzal & Partners – A Strategic Legal Partner in the Modern Investment Ecosystem
The inter-ministerial meeting held on 22 August 2025 was not only a testament to the government’s commitment to fostering a healthy investment climate but also highlighted the importance of cross-sectoral collaboration in developing a sustainable long-term investment roadmap.
Amidst the evolving regulatory landscape of immigration, investment, and employment, the role of legal counsel was no longer reactive—but proactive and strategic.
Murzal & Partners stood as a trusted legal advisor for foreign investors—not only to ensure regulatory compliance but also to design investment structures that were sustainable, compliant, and economically impactful. With a collaborative, policy-driven approach, we bridged the interests of investors and government stakeholders—ensuring that incoming foreign capital was not only legally sound, but also contributed meaningfully to Indonesia’s economic growth.
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