Abstract
This article examines the internal and external factors that influence foreign direct investment (FDI) in Indonesia, focusing specifically on the legal framework as a key determinant. Internal factors—also referred to as pull factors—include the quality of Indonesia’s Foreign Investment Law, legal certainty, bureaucratic efficiency, and the availability of fiscal and non-fiscal incentives. Meanwhile, push factors represent external elements, such as the attractiveness of neighboring countries’ investment laws, regional economic integration, and global investment trends that encourage capital relocation. Using a normative juridical approach and qualitative analysis of secondary data, this study compares Indonesia’s regulatory environment with that of several Southeast Asian countries, particularly Vietnam, Malaysia, and Cambodia. The findings reveal that Indonesia’s legal infrastructure remains less agile and investor-oriented compared to these competitors. Regulatory complexity, inconsistent implementation, and a lack of legal predictability are identified as key weaknesses. To compete effectively and attract sustainable foreign investment, Indonesia must revamp its legal approach—prioritizing simplification, harmonization with international standards, and greater protection for investors. The article concludes that comprehensive legal reform is essential not only to enhance competitiveness but also to ensure that foreign investment contributes meaningfully to national development goals.
Bahasa Abstract
Penelitian hukum ini membahas faktor internal dan eksternal yang memengaruhi keputusan investasi asing langsung (FDI) di Indonesia, dengan fokus utama pada kerangka hukum sebagai faktor penentu utama. Faktor internal—atau disebut juga faktor penarik—meliputi kualitas Hukum Penanaman Modal Asing Indonesia, kepastian hukum, efisiensi birokrasi, serta ketersediaan insentif fiskal dan non-fiskal. Sementara itu, faktor eksternal—atau faktor pendorong—merujuk pada daya saing hukum investasi negara tetangga, integrasi ekonomi kawasan, serta tren global yang mendorong relokasi modal. Penelitian ini menggunakan pendekatan yuridis normatif dan analisis kualitatif terhadap data sekunder untuk membandingkan kondisi regulasi di Indonesia dengan beberapa negara Asia Tenggara, khususnya Vietnam, Malaysia, dan Kamboja. Hasil penelitian menunjukkan bahwa struktur hukum investasi Indonesia masih kalah bersaing karena kompleksitas regulasi, inkonsistensi implementasi, dan rendahnya prediktabilitas hukum. Untuk dapat bersaing dan menarik investasi asing yang berkelanjutan, Indonesia perlu mereformasi kerangka hukumnya secara menyeluruh—dengan menekankan penyederhanaan, harmonisasi dengan standar internasional, serta perlindungan hukum yang lebih kuat bagi investor. Artikel ini menyimpulkan bahwa reformasi hukum investasi bukan hanya mendesak untuk meningkatkan daya saing, tetapi juga krusial agar investasi asing benar-benar berkontribusi terhadap pembangunan nasional.
Recommended Citation
Adam, Richard C.
(2025)
"Between Attraction and Evasion: Legal Factors Shaping FDI in Indonesia and Neighboring Countries,"
Indonesia Law Review: Vol. 15:
No.
1, Article 5.
DOI: 10.15742/ilrev.v15n1.6
Available at:
https://scholarhub.ui.ac.id/ilrev/vol15/iss1/5
