Report of the Joint Study Group on the Feasibility of India-Indonesia ...

41
Branches and Liaison Offices can perform only specified functions and for undertaking o<strong>the</strong>r
activities a Company has to be incorporated under <strong>the</strong> Indian Companies Act, 1956.
III.3.1.9. Acquisition and Transfer <strong>of</strong> Immovable Property in India for Carrying On a
Permitted Activity
A foreign investor who establish a Company or a branch, excluding a liaison <strong>of</strong>fice, can
acquire immovable property in India which is necessary for or incidental to carrying on his
business activity in India subject to compliance with all applicable laws and reporting to <strong>the</strong>
Reserve Bank <strong>of</strong> India within ninety days from <strong>the</strong> date <strong>of</strong> such acquisition.
III.3.2. Indonesia
On 26 April 2007 with <strong>the</strong> joint approval <strong>of</strong> <strong>the</strong> Indonesian Parliament and <strong>the</strong> President <strong>of</strong>
<strong>the</strong> Republic <strong>of</strong> Indonesia Susilo Bambang Yudhoyono, a new Law on Investment was
enacted. This new Investment Law replaced <strong>the</strong> old Foreign Investment Law <strong>of</strong> 1967 and <strong>the</strong>
Domestic Investment Law <strong>of</strong> 1968, because <strong>the</strong>se two latter Laws no longer suited <strong>the</strong>
necessity to accelerate Indonesia’s national economic and legal development, especially
regarding investment. The specific considerations underlying this new Investment Law were
that to accelerate national economic development, it was necessary to increase both domestic
as well as foreign investment. To this end, it was necessary to create an investment climate
which is conducive, promotional, legally certain, impartial and efficient, while taking into
account <strong>the</strong> interest <strong>of</strong> <strong>the</strong> national economy.
This Law includes all direct investment activities in all sectors. While domestic investment
may take <strong>the</strong> form <strong>of</strong> a corporation, non-corporation or individual business, foreign
investment projects should be in <strong>the</strong> form <strong>of</strong> a limited liability company based on <strong>the</strong> law <strong>of</strong>
<strong>the</strong> Republic <strong>of</strong> Indonesia.
A major difference with <strong>the</strong> two old investment laws is that <strong>the</strong> new Investment Laws
provides national treatment that is it provides equal treatment to any investors from all
countries as it provides to domestic investors. However, <strong>the</strong> principle <strong>of</strong> same treatment shall
not apply to investors from certain countries that have received privileges by virtue <strong>of</strong> an
agreement with Indonesia.
The new Investment Law provides a guarantee that <strong>the</strong> Indonesian government shall nei<strong>the</strong>r
nationalize nor take over <strong>the</strong> ownership rights <strong>of</strong> investors, except through <strong>the</strong> law. In <strong>the</strong>