An Analysis of the Authority in Licensing Approval(The Preliminary Approval) on the Activity of Foreign Investment

Abstract

Until now foreign investment is still one of the important factors to move and support the economics’ growing. In analyzing the important role of foreign investment, trying to be the target of foreign investment is the common thing among many countries in this era, both the developed countries and the developing countries.  Developing countries try as they can to be the target of the foreign investment. In philosophy, the existence of foreign investment is mainly needed which aims to support the development for the prosperity of the whole Indonesia people. Foreign investment affects to economics’ growing and the employment field. However, in fact this foreign investment does not only give the positive effects but also some negative effects. There are some problems which is related to the foreign investment. Those problems are related to the Licensing or the preliminary approval for the foreign investors that will trust their financial capital in Indonesia. Its regulations are confusing the investors. This confusion happens because the authorities of PMA permission are given to the center government through BKPM, but the existence of region autonomy also affects that (PMA) the foreign investment management is included to the obligation of region government. Thus, based on this regulation the region government also can manage the regulation of foreign investment permission which has been explained in region regulation that has been stated.

Keywords: Foreign Investment, Authority, the Central Government, Local Government.