Timor-Leste and Indonesia Sign Agreement to Promote and Protect Investment
On October 15th, 2026, in Jakarta, the Governments of Timor-Leste and Indonesia signed a Bilateral Agreement on the Promotion and Protection of Investments, establishing a framework to promote, facilitate, and protect investment between the two countries.
The Vice Prime Minister, Coordinating Minister for Economic Affairs, and Minister of Tourism and Environment, Francisco Kalbuadi Lay, and Indonesia’s Minister of Investment and Downstream Industry and Head of the Investment Coordinating Board (BKPM), Rosan Perkasa Roeslani, signed the agreement.
The signing fulfils a commitment made by the two Governments in 2023. Formal negotiations began in November 2024, and the legal review of the text was completed in August 2025.
At its October 7th, 2026, meeting, the Council of Ministers reviewed the agreement, which aims to create more favourable conditions for investment between the two countries by establishing a framework for investment protection and treatment, streamlining procedures, and providing mechanisms for resolving potential disputes.
The agreement rests on three main pillars: promotion to foster a favourable investment environment; facilitation through greater transparency, procedural efficiency, and inter-party cooperation; and protection through rules governing investment treatment and legal certainty.
The instrument also provides for the exchange of information on investment opportunities and for strengthening ties between the private sectors of both nations. Key sectors identified for further cooperation include manufacturing, infrastructure, renewable energy, logistics, and digital technologies.
Indonesia is Timor-Leste’s primary trading partner among ASEAN Member States. In 2025, bilateral trade reached US$423.63 million, accounting for approximately US$273.86 million.
The signing took place during the Timorese delegation's visit to Indonesia for the 41st Trade Expo Indonesia, held from October 14th to 18th. On the sidelines of the event, Francisco Kalbuadi Lay met Indonesia’s Minister of Trade, Budi Santoso, to discuss diversifying bilateral trade, expanding market access, and cooperation between business operators from both countries.
The Vice-Minister of Commerce and Industry, Augusto Júnior Trindade, also met Indonesia’s Vice-Minister of Trade, Dyah Roro Esti, to discuss opportunities to increase trade flows and promote products from both nations, including Timorese coffee and cloves.
The signing ceremony was also attended by the Minister of Transport and Communications, Miguel Marques Gonçalves Manetelu; the Vice-Minister of Commerce and Industry, Augusto Júnior Trindade; and the Ambassador of Timor-Leste to ASEAN.
The agreement establishes a new bilateral framework to promote, facilitate, and protect investment, and to develop economic cooperation between Timor-Leste and Indonesia.
