John Aglionby, Jakarta – Most analysts believe last month's double hotel bombing in Jakarta is unlikely to have much permanent impact on Indonesia's economy, provided it was not the start of a wider destabilisation campaign.

But even before the attacks, the investment climate was far from ideal, as many high-profile foreign investors in south-east Asia's largest economy have learnt for themselves.

When international bondholders tried to seize 70 per cent of Central Proteina Prima after a default, they did not expect a controversial rights issue that diluted their holding in the Indonesian aquaculture company to 40 percent and, last month, a $4 billion lawsuit.

Separately, Research In Motion, the Canadian manufacturer of Blackberry smart phones, recently found itself within a whisker of having imports of new devices banned until it set up an in-country service centre.

International companies such as Mars, the confectioner, and Intel, the computer chip maker, and McDonald's have also found themselves fighting various legal actions. Almost a dozen oil companies based in Batam, a special economic zone east of Sumatra, have just told officials they plan to relocate to nearby Singapore if rules that result in tax being levied multiple times are not altered.

The cases expose the difficulties foreign groups face navigating Indonesia's opaque legal system and uncertain business climate, even at a time when the newly re-elected government of President Susilo Bambang Yudhoyono is seeking to portray itself as the region's most stable and thriving nation.

Peter Fanning, the head of the Jakarta-based International Chamber of Commerce, says: "There's no doubt the president is serious about getting on top of the endemic corruption?... But it's also true to say the institutional framework within which the law courts work has not changed one iota [since the president began his first term in 2004]."

The $4 billion lawsuit involving international bondholders and CP Prima shares is a case in point. Four companies owned by Thailand's prominent Chearavanont family pledged shares in CP Prima, defaulted and are now suing the Bank of New York Mellon and Indonesia's Bank Danamon, for their actions as trustee and security agent in the deal.

Todung Mulya Lubis, the bondholders' lawyer, says the fact that the plaintiffs are suing for $4 billion speaks volumes about the woeful state of the country's legal system. CP Prima's current market capitalisation is only about $213 million and the value of the outstanding bonds is only $125 million.

Nevertheless, the four companies are suing for the same damages even though one guaranteed three times more CP Prima shares than any of the other companies.

Elsewhere, the problem hitting Research In Motion exposes another common problem in Indonesia – the contradictory contents of regulations issued by different institutions. "You're never quite sure what's going on, what the next steps should be," said one western diplomat.

In spite of the numerous areas of concern, analysts say there are signs for hope. The time it takes to start a new business has almost halved, Indonesia's fight against corruption does appear to be bearing fruit and, as the Research In Motion spat shows, many disputes can be resolved in the end.

International investors do not appear to be put off. Volkswagen recently announced it would set up an assembly plant in Indonesia, while British American Tobacco in June paid $494 million for 85 per cent of Bentoel, an Indonesian cigarette company.

"Unless the president acts decisively in his next term, the cautious will remain cautious and on the sidelines, while bolder entrepreneurs will continue to come in and be well rewarded," Mr Fanning said.