Immigration Newsletter – March 2023 Pre-investment Visa Regime in Indonesia
In the past decades, Indonesia strives towards creating a conducive investment climate within the country. The attempts are varied from streamlining the investment licensing process, revisiting import tariffs, to providing foreign investors with the ease to enter the country.
The enactment of the Law No. 6 of 2011 regarding Immigration (the “Immigration Law”) affirms the Indonesian Government’s intention to further open the country to welcome foreign investment in Indonesia. One of the recitals of the Immigration Law is quoted:
“Streamlining of the immigration procedures for foreign investors who intend to invest in Indonesia is needed………. Ultimately, this shall lead to pleasant investment climate and such climate should lead to foreign investors’ interest to invest in Indonesia.”
The Immigration Law has then been followed by the enactment of the Government Regulation No. 31 of 2013 regarding the Implementing Regulation of the Immigration Law which was lastly amended by the Government Regulation No. 48 of 2021 (“GR 48/2021”) which was enacted on 2 February 2021.
Article 89 of GR 48/2021 provides that visit visa can be granted to the foreigners who will travel to Indonesia for the purposes of, amongst others, governmental projects, education, social culture, tourism, pre-investment, business, family, journalism, or transit.
Slightly less than 2 years from the enactment of GR 48/2021, Indonesian Government through its Directorate General of Immigration has taken another big step to attract foreign investment by launching the pre-investment visa application process with the aim of providing ease of entry to Indonesia for investors to review potential investments before investing in Indonesia.
KEY HIGHLIGHTS OF PRE-INVESTMENT VISA
Purpose
Under GR 48/2021, the scope of pre-investment activities includes the activities intended to start a business amongst others site survey and/or feasibility study; this shall include liaising activities with regulator such as the Investment Coordinating Board (BKPM) or local organisations such as public notary or law firms.
In light of the defined scope of pre-investment activities under GR 48/2021, pre-investment visa will not allow profit making activities such as signing commercial contracts, negotiating commercial deals. This approach, in principle, showcases the alignment between the Directorate General of Immigration and BKPM in governing the investment procedures in Indonesia.
Guarantor/monetary guarantee
Although GR 48/2021 requires guarantor or monetary guarantee to be made available to the Directorate General of Immigration, the process of pre-investment visa application does not Appear to require a guarantor or any form of monetary guarantee (save for multiple entries). The authority of the Directorate General of Immigration to require otherwise remains.
Pre-investment visa allowing multiple entries may require guarantor or monetary guarantee to be placed. The process has yet to be tested.
Validity and official cost
6 months validity with official government costs of IDR 6,000,000 (approx USD 390 as at the date of this newsletter).
Process
The application process of pre-investment visa and visa issuance appear to be streamlined as the process indicates automatic issuance post payment. Online application and payment through immigration online portal has been made available to allow the automated process.
This automated process indicates that process such as interviews (which currently in place) has been made inapplicable for pre-investment visa, unless specifically required by the Directorate General of Immigration.
Note that the streamlined process does not negate/limit the authority of the Directorate General of Immigration to question an application and to deny the visa issuance.
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