Learning local practice

Author: | Published: 20 Jul 2010

"The biggest risk is uncertainty," bemoans one general counsel at an investment fund in Jakarta. "It used to be the uncertainty of politics and economics but now it is judicial uncertainty and corruption."

Doing business in Indonesia is no easy ride. From the dawn of foreign investment when Indonesia was a dictatorship under Suharto to its journey through the Asian Financial Crisis and democracy, investing in Indonesia has been fraught with difficulties – not least understanding local law and local practice.

Joel Hogarth, a partner at O'Melveny & Myers, has worked in Indonesia for nearly 10 years. Here, he explains what foreign investors need to know when putting their money into Indonesia and analyses some of the challenges and opportunities.

IFLR: How did you first come to work on deals in Indonesia? Joel Hogarth: My first case in Indonesia was the Asia Pulp & Paper (APP) restructuring in 2001. Although a very...