investment law



in Indonesia





Indonesia is the largest democracy state in South East Asia with over 279 million people, world’s fourth – most populous country and the most populous Muslim – Majority country, it consist of 17,000 islands, including : Sumatera, Java, Sulawesi, parts of Borneo and Papua. Indonesia is the largest island country at 1,904,569 square kilometres (735,358 square miles). Indonesia is a state law as stipulated in its constitution (Undang-Undang Dasar 1945) and presidential republic with an elected legislature.


Indonesia is the largest democracy state in South East Asia with over 279 million people, world’s fourth – most populous country and the most populous Muslim – Majority country, it consist of 17,000 islands, including : Sumatera, Java, Sulawesi, parts of Borneo and Papua. Indonesia is the largest island country at 1,904,569 square kilometres (735,358 square miles). Indonesia is a state law as stipulated in its constitution (Undang-Undang Dasar 1945) and presidential republic with an elected legislature.


The economy of Indonesia is the world’s 16th largest by nominal GDP and the 7th largest by the PPP. It is the world’s third largest democracy , a regional power and is considered a middle power in global affairs. The country is a member of several multilateral organisations, including the United Nations, World Trade Organization, G20 and founding of the Non-Aligned Movement, Association Of South East Asian Nations, East Asia Summit, D-8 and the Organisation of Islamic Cooperation.


Indonesia is welcome with investment from within the country and from abroad, investment from both abroad and within the country regulated in acnt no 25/2007 and Indonesia has provided legal protection to investors as regulated in act no. 06/2023 concerning job creation.


Investment legal protection in Indonesia has develoved better to ensure fairness, certainty and usefulness compared to previous periods. Joko Widodo’s administration has also started plans to move the capital to kalimantan (Borne) islandso that development is more evenly distribued in Indonesia , which has so far only focused on java.


President Joko Widodo’s administration has tried hard to improve regulations related to investment which overlap and sometimes conflict with other regulations with the omnibus law, with these laws and regulations providing the legal protection expected by investors. Toward its investment in Indonesia.


Regarding developments in the field of financial institutions and investments, the administration of President Prabowo Subianto is very concerned about the investment climate in Indonesia, which is related to the development and strengthening of the economy with the act no 4/2023 concerning the development and strengthening of the financial sector (P2SK) which was subsequently amended by act no. 4/2026 which is a legal umbrella that regulates and overhauls the Indonesian finacial sector ecosystem to respond to market dynamics.


Streengthening in the finacial sector is further supported by the ratification of law on Indonesia’s International Financial Center which soon come in to effect, making Indonesia an International Finacial Center as in several countries in the region as :


1. Dubai International Finacial Center (2004) (UAE).

2. Abu Dhabi Global Market (2015) (UAE).

3. Labuhan International Business and Finacial Center (Malaysia) (1990).

4. Qatar Financial Center (2005).

5. Astana International Center (2018) (Kazakhstan).

6. Singapore.

7. Hongkong.


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Palm Oil Investment in Sumatra: History, Current Conditions, and Opportunities for Foreign Companies



Investment Law





Introduction ​


Sumatra is the historical and economic center of Indonesia’s palm oil industry. The island hosted the first commercial oil palm plantations in the country and remains the largest palm oil producing region in Indonesia. This report discusses the history of oil palm plantations in Sumatra, the current condition of the sector, and investment opportunities for foreign companies.


1. History of the First Palm Oil Plantation in Sumatra


Oil palm was introduced to Indonesia in 1848 when several seedlings from West Africa were planted at the Bogor Botanical Gardens. These seedlings later became the source of planting materials used in Sumatra.


The first commercial oil palm plantations were established in 1911 in Pulu Raja, Asahan (North Sumatra) and Sungai Liput (Aceh). These plantations were pioneered by European investors, particularly the Belgian entrepreneur Adrien Hallet. Their success demonstrated that Sumatra possessed highly suitable climatic and soil conditions for oil palm cultivation.


The rapid expansion of plantations attracted additional foreign capital from Belgium, the Netherlands, Germany, and the United Kingdom. Processing facilities and palm oil mills were subsequently developed, laying the foundation for the modern palm oil industry in Indonesia.


2. Current Condition of Palm Oil Plantations in Sumatra


Today, Sumatra remains the dominant palm oil producing region in Indonesia, accounting for more than half of the nation’s oil palm plantation area. Major producing provinces include Riau, North Sumatra, South Sumatra, Jambi, and Aceh.


The region benefits from mature infrastructure, including ports, roads, processing mills, refineries, and export facilities. It also has a skilled workforce with extensive experience in plantation management and downstream processing.


Despite its strengths, the industry faces several challenges, including sustainability requirements, environmental concerns, land-use conflicts, and increasing international scrutiny related to deforestation and carbon emissions. As a result, certification and sustainable management practices have become increasingly important.


3. Palm Oil Investment in Sumatra for Foreign Companies


Sumatra continues to attract foreign investors because of its favorable climate, established infrastructure, strong export orientation, and large-scale production capacity.


Indonesia has gradually liberalized investment regulations. Under current investment policies, foreign investors can participate extensively in plantation and palm oil processing businesses, subject to licensing requirements, environmental compliance, and community development obligations.


Investment opportunities are not limited to plantation development. Significant growth potential exists in downstream industries such as biodiesel, oleochemicals, food processing, cosmetics, renewable energy, and biomass utilization. These sectors offer higher value-added opportunities and stronger long-term profitability.


For more than a century, Sumatra has been the heart of Indonesia’s palm oil industry. The combination of historical development, extensive plantation areas, and modern industrial infrastructure makes the island one of the most attractive destinations for palm oil investment. While sustainability and regulatory compliance are increasingly important, the long-term outlook for investment remains positive, particularly in downstream and value-added industries.


Winarno & Associates is ready to serve as your investment lawyer in Sumatra and play a part in your investment success there please do not hesitate to contact us.


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Investment Opportunities in Coal Mining in Sumatra



article



Introduction


Sumatra is one of Indonesia’s most important coal-producing regions and has played a significant role in the development of the mining industry for more than a century. The island possesses vast coal resources and remains attractive for investment.


1. History of the First Coal Mining Activities in Sumatra


Coal mining in Sumatra began during the Dutch colonial period. In 1868, Willem Hendrik de Greve discovered coal deposits in the Ombilin area of West Sumatra. Commercial operations expanded during the late nineteenth century and became one of Southeast Asia’s earliest industrial coal mining complexes.


2. Coal Mining After Indonesian Independence


Following independence, mining assets were nationalized and later expanded through state-owned and private-sector participation. PT Bukit Asam became a major industry player, particularly in South Sumatra.


3. Current Coal-Producing Regions in Sumatra


Major coal-producing provinces include South Sumatra, Jambi, Bengkulu, West Sumatra, Aceh, and Riau. Current Coal Production Statistics Indonesia produced approximately 775 million tonnes of coal in 2023, of which around 140 million tonnes came from Sumatra. South Sumatra produced about 106 million tonnes, Jambi about 15 million tonnes, and Aceh about 8 million tonnes. Sumatra exported approximately 74.5 million tonnes and supplied about 65.5 million tonnes to the domestic market.


4. Opportunities for New Coal Mining Development in Sumatra


Opportunities exist through untapped resources, infrastructure development, domestic energy demand, export markets, and downstream industrial projects. 5. Current Investment Laws Governing Coal Mining in Sumatra The sector is governed by Law No. 4 of 2009 and Law No. 3 of 2020, covering licensing, environmental management, reclamation, and investment requirements.


Sumatra remains one of Indonesia’s most promising coal investment destinations due to its resources, infrastructure, market access, and regulatory framework. We are ready to assist your legal need and provide the best solustion as investment lawyer in sumatera.





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