Jakarta’s traffic? A legendary adventure, some might say. But navigating foreign investment regulations? That shouldn’t be a wild ride.
Indonesia currently bringing the spotlight to law enforcement, ensuring fair play and legal certainty. This is Indonesia’s way of saying, ‘We’re ready for our close-up,’ as the star investment destination in Southeast Asia.
To bolster its position, the Indonesian government, through the Investment Coordinating Board and the Directorate General of Immigration, has taken significant steps to enhance the country’s business compliance system. These measures aim to ensure that foreign investments contribute positively to the national economy while adhering to immigration, tax, and legal regulations.
Joint Initiatives
Operation Wira Waspada, a joint initiative by Indonesia’s Investment Coordinating Board and Immigration Offices, has revealed widespread non-compliance among foreign businesses across Indonesia.
In Bali, authorities found 267 foreign investment companies that had their Business Identification Numbers (BINs) revoked for failing to meet the minimum investment requirement of Rp 10 billion. Many were found to be fictitious or contributing minimal value. Many were found to be fictitious or contributing minimal value, prompting the deportation of 63 foreign nationals and an entry ban for others.
“The reason for the revocation of the BINs of these 267 companies is that they could not fulfill the investment value commitment of Rp 10 billion and above,” said Saffar Muhammad Godam, Acting Director General of Immigration, during a press conference at I Gusti Ngurah Rai Airport, Friday February 21, 2025.
At the same occassion, Investment Coordinating Board’s Regional Director, Andy Sugiharto, added, “The reality in Bali is that many try to operate as investors. However, when we check in the field, one or two companies are non-existent. Even if they exist, their value is insignificant.”
Post-Audit Mechanisms
The operation has since expanded to other regions, such as Batam, where similar issues have been uncovered. Investigations have found companies with no physical presence, those operating outside approved business scopes, and foreign workers violating immigration laws. These efforts aim to eliminate fraudulent activities that undermine Indonesia’s economic growth.
The Investment Coordinating Board has introduced enhanced post-audit mechanisms to monitor the actual economic impact of foreign investments. Through the Online Single Submission (OSS) system, stricter oversight is in place to ensure that businesses meet their investment commitments and adhere to licensing regulations.
Andy Sugiharto emphasized that these audits are essential for verifying compliance and fostering genuine investments. “We conduct post-audits to ensure that investments genuinely add value to Indonesia. After Bali and Batam, we plan to expand this effort to Jakarta and other regions,” he stated.
Adding to this, Yuldi Yusman as Director of Immigration Supervision and Enforcement elaborated on the rigorous methods employed during these inspections.
“Our team conducts supervision using various methods, including document checks, surprise inspections, and gathering information from various sources. We want to ensure that the presence of foreign nationals in Batam complies with applicable laws,” Yuldi Yusman stated during a press conference at Hang Nadim International Airport, Batam, Thursday March 13, 2025.
Balancing Foreign Investment and Regulation
During the operation in Batam, Immigration Office detained 13 foreign nationals for violations, such as working without proper permits and setting up fake companies.
Among them was an Austrian national who established a fictitious company to extend his Investor KITAS (limited stay permit) without making real investments. Several Chinese and Bangladeshi nationals were also found involved in violations ranging from misuse of visit permits to unlawful entry into Indonesia.
These actions underline the government’s broader strategy to ensure compliance across all aspects of the business landscape. Proper business licensing, adherence to immigration laws, and fulfillment of tax responsibilities are interconnected components of a robust compliance system. Companies acting as guarantors for foreign workers now face heightened scrutiny, with severe penalties for those providing false information or failing to meet their legal obligations.
At the same time, Indonesia remains firmly committed to attracting foreign investment, recognizing its crucial role in driving economic development. To support compliant businesses, the government has introduced various incentives and streamlined regulations.
Strict enforcement of these laws ensures fair competition and protects the interests of all stakeholders. By maintaining legal order and promoting accountability, Indonesia is fostering a business environment where genuine investments can thrive—benefiting both investors and the nation as a whole.
One-Stop Solution for Compliance
Understanding and managing Indonesia’s complex regulatory requirements doesn’t have to be overwhelming. Seven Stones Indonesia offers a one-stop solution for foreign businesses, providing comprehensive services ranging from company incorporation and immigration applications to tax and accounting management.
Our compliance check services are designed to help you avoid unpleasant “surprise visits” from local authorities and ensure your business operates smoothly and legally.
Don’t leave compliance to chance. Partner with Seven Stones Indonesia today and take the first step toward securing your business’s success in one of Southeast Asia’s most promising investment destinations. Reach out to us now and let’s make compliance the easiest part of your journey!
Sources: Media24, SuaraBali
Feat Image: via AntaraNews/Jessica
