Investment Treaties

In recent years, Indonesia has adopted a more modernized investment treaty approach. Newer-generation treaties typically provide clearer parameters for core protections (including more specific articulation of fair and equitable treatment and more detailed compensation principles for expropriation), and often include additional provisions on transfers of funds, losses arising from extraordinary events, and safeguard exceptions. These treaties may also contain more explicit carve-outs (such as for government procurement and certain tax measures), as well as language recognizing the State’s right to regulate and encouraging responsible business conduct and anti-corruption measures.

Bilateral Investment Treaties (BITS)

Indonesia has entered into bilateral investment treaties with a number of countries. In recent years, Indonesia has adopted a more selective approach to investment treaties, with a focus on modern treaty standards and clearer regulatory safeguards. The scope and level of protection vary depending on the specific treaty. Investors should assess whether a BIT applies based on their nationality and investment structure.

Investment Chapters in Free Trade Agreements (FTAs) and CEPAs

In addition to standalone BITs, Indonesia is a party to 22 Free Trade Agreements (FTAs), Preferential Trade Arrangements (PTAs), and Comprehensive Economic Partnership Agreements (CEPAs):

  1. Indonesia–Canada Comprehensive Economic Partnership Agreement (ICA-CEPA), which establishes Indonesia’s first trade pact with a North American nation, focusing on market access for automotive, textiles, and manufacturing sectors while securing critical supplies of wheat and agricultural goods.
  2. Indonesia–EU Comprehensive Economic Partnership Agreement (IEU-CEPA), which aims to open comprehensive market access across Europe and Indonesia, focusing on robust provisions for digital trade, intellectual property rights, government procurement, and sustainable development.
  3. Indonesia–Eurasian Economic Union Free Trade Agreement (I-EAEU FTA), which secures preferential trade terms with a massive market across Russia and Central Asia, focusing on expanding export avenues for agricultural commodities, electronics, and fisheries.
  4. Indonesia–Japan Economic Partnership Agreement (IJEPA), which liberalises trade in goods and services between Indonesia and Japan while promoting investment, movement of natural persons, and economic cooperation.
  5. Indonesia–Pakistan Preferential Trade Agreement (IP PTA), which provides preferential tariff rates for a limited list of goods traded between Indonesia and Pakistan.
  6. Indonesia–EFTA Comprehensive Economic Partnership Agreement (Indonesia–EFTA CEPA), which facilitates trade and investment between Indonesia and the EFTA States (Switzerland, Norway, Iceland, and Liechtenstein), including goods, services, investment, and sustainable development.
  7. Indonesia–Mozambique Preferential Trade Agreement, which grants limited tariff preferences for selected products to enhance bilateral trade flows between the two countries.
  8. Indonesia–Australia Comprehensive Economic Partnership Agreement (IA CEPA), which deepens bilateral economic integration through comprehensive commitments on goods, services, investment, skills cooperation, and economic capacity building.
  9. Indonesia–Korea Comprehensive Economic Partnership Agreement (IK CEPA), which expands market access and strengthens cooperation in trade, services, investment, and supply chains between Indonesia and the Republic of Korea.
  10. Preferential Trade Agreement under the D8 Organization (PTAD8), which provides tariff preferences among Developing-8 member countries to promote South-South trade cooperation.
  11. ASEAN Trade in Goods Agreement (ATIGA), which eliminates or reduces tariffs and non tariff barriers on goods traded among ASEAN Member States.
  12. ASEAN Trade in Services Agreements (ATISA/AFAS), which progressively liberalise trade in services within ASEAN through commitments on market access and national treatment.
  13. Indonesia–United Arab Emirates Comprehensive Economic Partnership Agreement (IUAE CEPA), which promotes bilateral trade and investment through extensive tariff elimination, services liberalisation, and investment facilitation.
  14. ASEAN–China Free Trade Agreement (ACFTA), which establishes a free trade area between ASEAN and China covering trade in goods, services, and investment.
  15. Indonesia–Chile Comprehensive Economic Partnership Agreement – Trade in Goods (IC CEPA TIG), which removes or reduces tariffs and addresses non tariff measures on goods traded between Indonesia and Chile.
  16. Indonesia–Chile Comprehensive Economic Partnership Agreement – Trade in Services (ICCEPATIS), which liberalises cross-border services and investment between Indonesia and Chile.
  17. ASEAN–Japan Comprehensive Economic Partnership (AJCEP), which enhances economic cooperation and liberalises trade in goods, services, and investment between ASEAN and Japan.
  18. ASEAN–India Free Trade Area (AIFTA), which provides tariff concessions on goods and commitments on services and investment between ASEAN Member States and India.
  19. ASEAN–Hong Kong, China Free Trade Agreement and Investment Agreement, which liberalises trade in goods and services and ensures investment protection between ASEAN and Hong Kong, China.
  20. ASEAN–Australia–New Zealand Free Trade Area (AANZFTA), which establishes comprehensive trade and investment rules between ASEAN, Australia, and New Zealand, including goods, services, and investment.
  21. Regional Comprehensive Economic Partnership (RCEP), which is a mega regional trade agreement among ASEAN and its FTA partners, harmonising rules on goods, services, investment, intellectual property, and e commerce.
  22. ASEAN–Korea Free Trade Agreement (AKFTA), which liberalises trade in goods, services, and investment between ASEAN Member States and the Republic of Korea.