Turning uncertainty into opportunity – Bridging Perception and reality in Indonesia’s investment landscape (WPG Indonesia webinar, 28 July 2026)

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© WongPartnership LLP and Makes & Partners Law Firm

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships

Act 2005.

Turning Uncertainty into Opportunity – Bridging

Perception and Reality in Indonesia’s Investment

Landscape (WPG Indonesia Webinar, 28 July 2026)

On 28 July 2026, WongPartnership LLP (WongPartnership) and Makes & Partners Law Firm (Makes), members of WPG, a regional law network, jointly hosted a webinar exploring opportunities and challenges in

Indonesia’s investment landscape. The session featured Dr Yozua Makes (Founder and Managing Partner,

Makes) and James Choo (Partner, WongPartnership), moderated by Ajisatria Suleiman (Of Counsel, Makes).

The discussion went beyond prevailing market perceptions to examine the commercial realities shaping investment decisions in Indonesia, including how investors can identify resilient opportunities and adopt practical strategies for structuring and executing investments in a rapidly evolving environment. It also highlighted the critical role of legal and commercial advisers in bridging regulatory expectations and business objectives, navigating cross-border complexities, and facilitating successful investments between Indonesia,

Singapore and the wider region.

This update summarises the key points and insights discussed.

The Global and Regional Economic Outlook

Understanding Indonesia’s investment landscape requires consideration of the broader geopolitical and macroeconomic forces shaping global capital flows. Disruptions to strategic shipping routes have pushed oil prices well above Indonesia’s 2026 state budget assumption of US$70 per barrel, placing pressure on fiscal strength. Prolonged higher United States (US) interest rates have strengthened the US dollar, prompting capital outflows from emerging markets such as Indonesia and weighing on the Indonesian rupiah.

Despite these challenges, Indonesia remains resilient. Q1 2026 GDP growth stood at 5.6%, supported by domestic consumption and government spending, while foreign direct investment reached US$30 billion

(up 7.2% year-on-year). Indonesia continues to evolve as a regional hub for advanced manufacturing, artificial intelligence, semiconductors and the electric vehicle (EV) ecosystem, aided by substantial nickel reserves and favourable demographics. Continued reforms in governance, regulation and transparency, together with government priorities in renewable energy, food security and digital infrastructure, reinforce

Indonesia’s long-term investment potential despite near-term global uncertainty.

Key Policy and Regulatory Developments

Indonesia has recently introduced several reforms aimed at increasing investor confidence and boosting investment opportunities:

(a)

Downstreaming: Prioritising the movement of Indonesia’s natural resource industry up the value chain, the Indonesian Government continues to enhance downstreaming capabilities such as mineral processing and EV battery manufacturing. Indonesia’s sovereign wealth fund, Danantara, is developing 26 downstreaming projects worth approximately US$5.5 billion.

2

© WongPartnership LLP and Makes & Partners Law Firm

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships

Act 2005.

(b)

Financial market reforms: Several market reforms have been introduced, including strengthening financial institutions through the demutualisation of the Indonesia Stock Exchange (IDX), transitioning the Financial Services Authority (OJK) to an enforcement agency, and reforming the

Indonesia Deposit Insurance Corporation as an independent financial safety-net institution. Equity market reforms include new disclosure requirements for listed company share ownership above 1% (previously 5%), publication of high shareholding concentration data, and an increase in the minimum free-float threshold to 15%.

(c)

International Financial Centre (IFC): In late July 2026, Indonesia passed a law establishing the

IFC as a special zone with preferential tax treatment. The IFC is targeted for implementation on 21

October 2026, and its implementing regulations are expected to incorporate common law principles, including structures such as trusts and family offices.

(d)

Centralised exports framework: A new framework operating through Danantara Sumber Daya

Indonesia covering coal, crude palm oil and ferro-alloys has been established to address under-invoicing.

(e)

Danantara bonds: Danantara’s first global bond raised US$1.5 billion and was oversubscribed.

Danantara is also issuing special debt securities, namely the Patriot and Merah Putih Bonds, with enhanced legal protections for bondholders to support capital repatriation and strategic national projects.

(f)

Minerals and strategic commodities exchange: The exchange, regulated and supervised by

OJK, is expected to begin operations on 1 January 2027 and is intended to strengthen Indonesia’s position in the global commodity market.

Singapore’s Role

Singapore remains Indonesia’s largest foreign investor, with capital inflows reaching approximately US$4.6

billion in Q1 2026 alone. Singapore has been Indonesia’s largest source of foreign direct investment for over a decade (approximately US$20 billion in 2024), with over 4,700 multinational corporations using

Singapore as their regional headquarters. The “twin hub” model — Singapore as regional headquarters, treasury and capital-raising platform, paired with Indonesia’s manufacturing, digital infrastructure and geographic hosting capabilities — continues to serve both economies well.

Recent bilateral developments reinforce close economic links between Singapore and Indonesia. These include the Nongsa-Changi subsea cable completed on 20 July 2026 connecting Batam and Singapore data centres, a Memorandum of Understanding (MOU) for up to 3.4 GW of low-carbon electricity exports, and the Singapore-Indonesia Leaders’ Retreat in July 2026, which produced 26 MOUs spanning energy, digital cooperation and human capital.

Growing Singapore-Indonesia investment flows will require closer coordination. The IFC presents an opportunity for such coordination, through which Singapore professionals can support the IFC with their expertise in common law and international commercial practices.

3

© WongPartnership LLP and Makes & Partners Law Firm

DISCLAIMER: This update is intended for your general information only. It is not intended to be, nor should it be, regarded as or relied upon as legal advice. Court decisions referred to herein may be subject to further appeal at the time of publication, and subsequent developments in the law, including new legislation, amendments, court decisions or practice directions, may affect the accuracy or relevance of the matters discussed. We are under no duty to update this publication to reflect any such changes in the law. You should consult a qualified legal professional before taking any action or omitting to take action in relation to matters discussed herein.

WongPartnership LLP (UEN: T08LL0003B) is a limited liability law partnership registered in Singapore under the Limited Liability Partnerships

Act 2005.

Conclusion

Uncertainty is now a defining feature of the global investment environment, rather than a challenge unique to

Indonesia. Against this backdrop, investors must look beyond prevailing perceptions and assess Indonesia through the lens of its underlying commercial fundamentals, strategic relevance and long-term growth opportunities. Regulatory changes should not be viewed solely as a compliance burden, but as a factor requiring informed deliberations, local insights and long-term, forward-looking structuring of the proposed transaction.

More importantly, successful investments increasingly require tighter coordination between legal strategy and the broader commercial, political, regulatory, and market optics surrounding such transactions. Legal advisers must therefore move beyond technical compliance to anticipate regulatory expectations, align transaction structures with business objectives, engage key stakeholders and bridge international standards with Indonesian law and market practice.

The longstanding collaboration between WongPartnership and Makes brings together WongPartnership’s international and regional capabilities with Makes’ deep understanding of Indonesia’s legal, regulatory and commercial landscape. Through WPG, we are strategically positioned to provide coordinated, commercially grounded and locally informed advice across the full investment lifecycle, assisting clients in navigating uncertainty and Indonesia’s evolving landscape to maximise cross-border investments.

If you would like more information on this or any other area of law, you may wish to contact the Partner at

WongPartnership or Makes whom you normally work with or the following:

Dr Yozua MAKES

Founder and Managing Partner

Mark CHOY

Partner

Iwan SETIAWAN

Senior Partner

James CHOO

Partner

FRANSISCA

Partner

Lesley TAN

Partner

Muhammad KARNOVA

Partner

OUR REGIONAL

PRESENCE

Established by WongPartnership LLP in 2017,

WPG, a regional law network, brings together six prominent law firms across seven jurisdictions in a strategic collaboration to provide clients access to legal expertise throughout Asia and the Middle

East.

WPG combines the strengths and local insights of its member firms to offer seamless, sophisticated and practical advice. Through this integrated approach, clients benefit from unparalleled legal capabilities and tailored solutions across diverse jurisdictions.

WINNING PARTNERSHIPS. LEADING EXCELLENCE.

As a market leader and full-service firm, WongPartnership has been involved in landmark corporate transactions as well as high-profile litigation and arbitration matters. WongPartnership’s Indonesia practice not only offers the highest levels of legal expertise, but also the practical know-how to navigate the fast-evolving landscape of doing business in Indonesia. We offer an unparalleled one-stop platform to clients over a full range of services, including transactional, advisory and dispute resolution. WongPartnership’s collaboration with Makes includes working on a range of corporate/commercial matters, and both inbound and outbound Indonesia related M&A transactions. Working seamlessly on various matters, we have been able to deliver commercially focused advice and negotiation skills that drive successful outcomes for clients.

Makes & Partners – a member firm of WPG, a regional law network set up by WongPartnership – is the go-to firm for strategy formulation, offering not just legal insight but the foresight, access, and precision needed to navigate

Indonesia’s complex and evolving business landscape. With a longstanding focus on mergers & acquisitions, capital markets, corporate finance, and restructuring, Makes does not only complete transactions – they set industry standards. Especially regarded for pioneering transformative deals during the 1998 financial crisis, our track record includes “The Firsts” such as: (i) the first standardized legal M&A framework for post-crisis government asset sales, which remains a model for divestments and privatizations today; (ii) the first successful restructuring by sale of multiple government assets; and (iii) the first dual listing of an Indonesian state-owned enterprise on the NYSE and NASDAQ in 1995.

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