In general, mailbox companies may seem normal just like other investment companies. However, the distinction between the two is that mailbox companies do not have real business activities. Inevitably, this company may fall within the definition of an investor within the international investment agreements. This implies that mailbox companies can be protected and further obtain the benefits of the treaty. With the existence of the denial of benefits clause, Indonesia has the right invoke its rights to deny the treaty benefits to investors who do not have substantial business activities in the territory of Indonesia and are owned or controlled by foreign nationals. This clause, nevertheless, has not yet been included in Indonesia’s bilateral investment treaty. Accordingly, this analysis will further discuss on the protection provided by this clause as well as the measures that Indonesia can take to improve its protection in its international investment treaties. This Thesis will employ normative legal research by applying the comparative and case analysis approaches. Based on the analysis, Indonesia needs to incorporate the denial of benefits clause into its international investment agreements that can be formulated either as discretionary or automatic. The automatic formulation of denial of benefits clause is deemed to be the most effective measure in preventing investors to make use of the treaty benefits in an abusive way. In light of this, such clause has a decisive role for Indonesia as the Host State not to accord the treaty benefits to investors who fail to satisfy the criterions of the clause and shall further be included into all Indonesia’s international investment agreements.