The Government of Republic of Indonesia has ratified Law Number 25 of 2007 regarding Capital Investments on 26 April 2007, which comprises 18 Chapters and 40 Articles. Upon the ratification of Law No. 25 of 2007, therefore Law No.1 of 1967 regarding Foreign Capital Investment in conjunction with Law No.11 of 1970 and Law No.6 of 1968 in conjunction with Law No. 12 of 1970 regarding Domestic Capital Investment that previously regulated foreign and domestic capital investment in Indonesia is void.

Law No 25 of 2007 includes new provisions deemed essential to the improvement of the investment climate that would be conducive to the entry of foreign investments.

1. Definition of Foreign Capital Investment.
   The 2007 Foreign Capital Investment Law covers not only direct investments but also covers the purchase of shares (portfolio) (Article 1 para 10 jo. Article 5 (3)). Therefore, the modes of entry for Foreign Capital investments have been broadened in the 2007 Foreign Capital Investment Law.
2. Investors
   In the new Foreign Capital Investment Law, corporations are not the only entities that may engage in foreign capital investments but countries, individuals, business entities and corporations, all of which are from overseas may invest their capital in Indonesia (Article 1 para 6).
3. The Treatment of Investors
   In Chapter V of the new Foreign Capital Investment Law, Foreign Capital Investments shall be given the same treatment as Domestic Capital Investment. In addition, Foreign capital Investments from any country, shall be accorded the same treatment in principle, except those originating from countries given preferential treatment pursuant to an agreement with Indonesia.
4. One Stop Service
   The one-stop service shall be fully under the authority of BKPM. This is specified in Article 12 paragraphs 1 and 2 of the new Foreign Capital Investment Law, which facilitates the one-stop service for Foreign Capital Investors, which had not been provided for in the previous Foreign Capital Investment Law.
5. Licensing and Ease of Entry for Foreign Workers
   In the new Foreign Capital Investment Law it is easier for foreign workers to enter Indonesia although Indonesian workers must remain top priority, however, investors are still entitled to use foreign experts for certain positions and expertise (article 10).
6. Taxes
   The new Foreign Capital Investment Law not only provide tax facilities but also fiscal facilities so as to have a broader scope since tax is only one aspect of fiscal matters, hence providing greater facilities and benefit to foreign investors.
7. Negative List
   The new Foreign Capital Investment Law provides greater leeway since it does not specify the types of business included in the negative list (Article 11). Such negative list shall be specified in subsequent laws. This means that the types of businesses foreign investors have access to be more flexible and transparent.

On June 3, 2007, Government of the Republic of Indonesia issued two (2) Presidential Regulations, namely No. 76 of 2007 and No. 77 of 2007 regarding the List of Negative Investment which constitutes the implementation of Article 12 paragraph (4) and Article 13 paragraph (1) Law No. 25 of 2007 regarding Capital Investment.

Presidential Regulation Number 76 of 2007 regarding the Criteria and Requisites for the Drawing Up of Closed Fields of Businesses and Fields of Businesses that are Open Conditionally in the field of Capital investment. Presidential Regulation Number 76 of 2007 comprises 10 Chapters and 17 Articles and constitutes the basis for the drawing up of the list of business fields that are closed and open conditionally, under the principle of simplification, and in observance of agreements or international commitments and transparency.

While Presidential Regulation Number 77 of 2007 is a regulation pertaining to the List of Fields of Businesses that are Closed and Open Conditionally in the field of Capital Investment. This Presidential Regulation comprises 7 Articles with attachments for the fields of businesses that are closed and open conditionally. The determination of fields of businesses that are closed for foreign and domestic capital investments are based on the criteria of: Health, Safety, Defense and Security, Environmental and Moral-Cultural fields (K3LM), in addition to national interests. Whereas, the inclusion of fields of businesses that are conditionally open are among others the protection and development of Micro, Small, and Medium-scale businesses as well as cooperatives (UMKMK), supervision of production and distribution, in addition to technological capacity improvement.

Law No.40 of 2007 regarding Limited Liability Company has been enacted on 16 August 2007 amending Law No.1 of 1995. Law No. 40 of 2007 has accommodated various provisions regarding Company, in the form of new provisions, revision, improvement and retention of previous provisions that are deemed still relevant.

This law comprises 14 Chapter and 161 Articles and contains 2 additional Chapters compared to the previous Limited Liability Company Law, namely:

1. Chapter V: Social and Environmental Responsibility
2. Chapter XI: Expenses

The definition of Social and Environmental Responsibility is specified in the Chapter regarding General Provisions in Article 1.3, namely corporate commitment to play a role in sustainable economic development in order to improve the quality of life and the environment in a beneficial manner, both for the company itself, the local community, as well as the general public.

The provisions regarding expenses included in the Law No. 40 of 2007 to regulate expenses needed for:

1. Obtain the approval for the use of the corporate name;
2. To obtain validation of corporate entity;
3. Obtain approval for the amendment of Articles of Association;
4. Obtain information on corporate data from the corporate registry;
5. Announcements obligated by law to be made in Official Gazette of the Republic of Indonesia and Supplementary Official Gazette of the Republic of Indonesia; and
6. Obtain a copy of the articles of association.

While the new provision set forth in Law No. 40 of 2007, are among other things:

1. “Separation” which is set forth in Chapter on Mergers, Amalgamations and Take–over. In Law No. 40 of 2007, ”Separation” is defined as a legal act conducted by the Company to separate business activities that result in all corporate assets and liabilities to be transferred by law to 2 (two) or more Companies or part of the corporate assets and liabilities being transferred to 1 (one) or more companies.
   Separation may be conducted in the absolute terms or not.
2. Revisions in the procedure for filing and approval of corporate entities of a limited liability company, issuance of approvals and acceptance of article of association amendments and notification of rejections if it is not consistent with the provisions of law. Unlike the previous Limited Liability Company Law, in Law 40 of 2007, the procedure for filing for and issuance of validation of corporate entity is specified in detail, namely in Articles 9, 10 and 11 of Law No. 40 of 2007.
3. Provisions on General Meetings of Shareholders (RUPS) are general the same as those of Law No. 1 of 1995 except for some additional provisions such as summons to the RUPS, where in Law No. 40 of 2007 permits the summoning of the RUPS other than by registered letter, namely through newspaper advertisements.
4. In addition to the convening of RUPS as specified in Law No.1 of 1995, in which the shareholders must convene the meeting in a certain venue, Article 77 of Law No. 40 of 2007 permits the convening of RUPS through the teleconference, video conference or other electronic media that would enable all participants of the RUPS to view and hear each other directly and partake in the meeting in compliance with the quorum and the requisites for decision making as specified by law and/or company articles of association.
5. The provision specifying that the responsibility of the Directors and/or Board of Commissioner as specified by law shall not prejudice other legal provisions set forth in the Criminal Code is set forth in Chapter XII regarding other provisions.