LEGAL IMPLICATION OF AFTA TOWARD LEGAL PROTECTION OF INVESTOR IN INDONESIA AND MALAYSIA INVESTMENT LAW

Abstract

Globalization era provides opportunities to develop their countries, one of them through opening investment flows. Investment flow is currently growing rapidly which can be seen from each year increasing. With resources and many strategic sectors, Indonesia should be the first choice for investors to invest. Investment growth in Indonesia is still relatively slow compared to other ASEAN countries especially Malaysia. Since 2010, Malaysia's investment growth has always increased dramatically, including the fastest investment growth besides Singapore. The existences of legal certainty and convenience of investment are the key to attract domestic and foreign investors to invest in Malaysia. This research method is normative research that is the study of law conducted by examining the literature, using the object of writing studies in the form of existing libraries with comparing investment law of both countries, whether in the form of books, journal, and regulation that have a correlation to the issues discussed. The WTO as an organization in the trade sector has provided and paved the way for multilateral, bilateral and regional agreements. One in the regional field is AFTA. The ASEAN Free Trade Area (AFTA) is a trade agreement between the Association of Southeast Asian Nations and ASEAN countries, and facilitating economic integration with regional and international allies. Indonesia and Malaysia have agreed to ratify the treaty agreement that is in the AFTA agreement, which means the two countries are ready with the consequences to provide an easy way for free trade in ASEAN such as business licensing, taxes and incentives for investors however, Indonesia as a developing country must take appropriate steps to protect national interests. Although the existence of AFTA offers many benefits for Indonesia, protection of national interests must be taken into account in policy making. The Government has an obligation to protect national interest in order to prosper Indonesia people.