Electronic Theses and Dissertation

National regulation under Law Number 25 of 2007 on Capital Investment facility services and/or licensing of the rights over land as stipulated in Article 21 letter a that can be granted and extended in advance all at once and it can be renewed upon the request of the investor. In the form of the right to build can be granted for 80 (eighty) years through grant and it can be extended in advance for 50 (fifty) years and can be renewed for 30 (thirty) years Article 22, point b. However, this law is not fully implemented by the government of Banda Aceh. The government only applies Qanun Number 14 of 2017 on Aceh’s good management by which Banda Aceh’s Government good can be leased up to for 5 (five) years only since the agreement is signed and it can be extended later.
The purpose of this research is to analyze the reason behind Banda Aceh government makes a limitation in giving land license to only five years for foreign direct investment, to find out the impact that occurred from the limitation of 5-year land license, and to find out the obstacles faced by investors in investing in Banda Aceh.
This study uses empirical legal methods. Data required for this thesis consists of primary and secondary data. Primary data were collected through field research and secondary were obtained through library research. All collected data are analyzed by applying qualitative analysis.
The results of this study found that Qanun Number 14 of 2017 on Aceh’s good management is taken from the Ministerial Decree of Home Affairs regulation Number 19 of 2016. Based on the Ministerial Decree of Home Affairs regulation Number 19 of 2016 on guidelines for the Management of Regional Property Article 114: (1) The period of lease of goods belonging to the area is 5 (five) years since the signing of the agreement and can be extended. Another results found, the impact that is appeared from the limitation on the 5-year short land license affects the interest of investor in deciding their investment. The foreign investors would not take a risk to apply their capital in the region even though there are many advantages that can be provided from the investment.
It is suggested that the government should increase the period of land lease to 25-30 years with special characteristics, such as; The investment requires a large area of land and environmentally friendly. Moreover, The government needs to promote the location for investor by giving a good due diligence, a good infrastructure and legal certainty. The purpose and legality in the procedure for using land right hould be clear.

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