There are many laws in Indonesia which are used for the regulation of foreign direct investment companies. Foreign direct investment companies in Indonesia are regulated by Law No. 25 of 2007 with regard to investment as well as adherence to investment regulations. This law also states that any form of foreign direct investment done in Indonesia is to be carried out by a limited liability company owned by foreigners. In Indonesia, such a company is known as a Penanaman Modal Asing (PMA). PMAs in Indonesia are regulated by Law No. 40 of 2007.
The Investment Law also protects the investors because it states that the Indonesian government will remove neither the ownership rights of the investors nor those of any of the country’s foreign investors. When one takes into account all the laws in Indonesia which concern FDI companies, it will be shown that the laws which specifically pertain to foreign direct investment companies include articles which include information such as licensing, closed or restricted sectors for foreign direct investment, general incentives, fiscal concessions, labor issues, and compensation, among others.