This thesis is studying to answer the problems i.e : How is privatization proceeding in Indonesia and why privatized ? How is the legal aspect on , privatization ?. In order to answer the questions, the writer has use a juridicial normative approach i.e legal research using a secondary data by using dogmatic juridical approach and analytical descriptive. The conclusion of the research are ; Privatization was performed in according to article 1 point 12 Undang-undang No. 19 Tahun 2003, where some or whole government own companies can be transferred into private or public sector. The transferring of government ownership in according to UUBUMN no. 19 / 2003 may be conducted by direct placement, strategic sale, management buyout and Initial Public Offering as it is the most appropriate method for Indonesian public. The objectives of pnvatization in the short term are to reduce the deficit of the government in the national budget, in the medium term pnvatization is expected to improve efficiency by eliminates the overall role of government in the business performance, enhancing economic performance in the public enterprises by expanding private sector involvement in management reducing Government financial involvement in public enterprises, and boosting the stock exchange through the public Share Program.