Business bang in Indonesia: Dozens of sectors open for foreign investment

Reading Time: 2 minutes

Jakarta roundaboutIndonesia is easing foreign investment rules in a large number of economic sectors in a bid to attract more foreign investment into the country. The government has decided to open up business sectors which were previously closed or restricted, for up to to 100 per cent foreign ownership.

To that end, the so-called “Negative Investment List” has been revised and 35 formerly closed businesses removed, including logistics and storage services, pharmaceutical raw material manufacturing and healthcare services, land transportation, the restaurant business and others (see detailed list below). The measures are stipulated in the 10th economic policy package of the government released in Jakarta on February 11.

The move is aimed at boosting Southeast Asia’s largest economy by GDP which has been growing at its slowest pace in six years because of falling commodity prices and cooling growth in major trading partner China.

Indonesian President Joko Widodo hinted at the possibility that more sectors might be opened up.

“We are seriously considering deregulation across the board, but [are now] focusing on e-commerce, healthcare and the creative industry. This is the first round, there will be a second and a third,” he said.

Of the sectors, 14 businesses, which were previously partly owned by foreign investors in a range of 49 to 95 per cent, are now fully opened up. Some sectors were opened up for the first time, while 20 sectors have been added to the non-investment list mainly to protect small and medium domestic businesses.

INFOBOX

100% foreign ownership allowed
Cold storage
Sports centers
Film processing labs
Rubber and sugar industry )when engaging in partnerships with local farmers and use 30% domestically produced raw material)
Warehousing
Tourism,
E-commerce (with a marketplace value above 10 billion rupiahs and when working with local warehousing companies)
Toll road operators
Telecom device certification
Non-hazardous waste management
Raw medicine materials
Pharmaceutical ventures
Restaurants, bars, cafés
Film making
Film distribution
Cinemas (required to show Indonesian films at least 60 per cent of their screen time)
Direct selling
Futures trading

95% foreign ownership allowed
Plantation firms with more than 25 hectares of land integrated with a processing plant
Oil drilling and related

85% foreign ownership allowed
Leasing companies

67% foreign ownership allowed
Job training
Travel bureaus
Golf course developers
Flight logistics supporting businesses
Health care facilities and clinics
Medical instruments
Private museums
Catering
Convention centers and exhibitions
Consulting and construction businesses with contract values above 10 billion rupiahs
Telecom network providers with integrated telecom services.

51% foreign ownership allowed
Natural tourism management

49% foreign ownership allowed
Acupuncture
Land transportation
High voltage electric installation
Private security services
Air and sea ports
Taxi and bus services
Weapons and explosives production (with recommendation from the Minister of Defense)

40% foreign ownership allowed
Banks and financial services (requires special license)

Restricted/Closed
Defense sector (except weapons production)
Traffic information systems (air, maritime, land)
Alcoholic beverage production
Marijuana cultivation
Casinos
Historical and sacred sites
Chemical material industry that can damage the environment
Pre-design and consulting services
Architectural design services and architectural services
Utilisation of natural coral for aquariums, souvenirs and accessories
Small and medium enterprises
Any business with investment value of less than 10 billion rupiahs

(The list is a selection)

 

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Reading Time: 2 minutes

Indonesia is easing foreign investment rules in a large number of economic sectors in a bid to attract more foreign investment into the country. The government has decided to open up business sectors which were previously closed or restricted, for up to to 100 per cent foreign ownership.

Reading Time: 2 minutes

Jakarta roundaboutIndonesia is easing foreign investment rules in a large number of economic sectors in a bid to attract more foreign investment into the country. The government has decided to open up business sectors which were previously closed or restricted, for up to to 100 per cent foreign ownership.

To that end, the so-called “Negative Investment List” has been revised and 35 formerly closed businesses removed, including logistics and storage services, pharmaceutical raw material manufacturing and healthcare services, land transportation, the restaurant business and others (see detailed list below). The measures are stipulated in the 10th economic policy package of the government released in Jakarta on February 11.

The move is aimed at boosting Southeast Asia’s largest economy by GDP which has been growing at its slowest pace in six years because of falling commodity prices and cooling growth in major trading partner China.

Indonesian President Joko Widodo hinted at the possibility that more sectors might be opened up.

“We are seriously considering deregulation across the board, but [are now] focusing on e-commerce, healthcare and the creative industry. This is the first round, there will be a second and a third,” he said.

Of the sectors, 14 businesses, which were previously partly owned by foreign investors in a range of 49 to 95 per cent, are now fully opened up. Some sectors were opened up for the first time, while 20 sectors have been added to the non-investment list mainly to protect small and medium domestic businesses.

INFOBOX

100% foreign ownership allowed
Cold storage
Sports centers
Film processing labs
Rubber and sugar industry )when engaging in partnerships with local farmers and use 30% domestically produced raw material)
Warehousing
Tourism,
E-commerce (with a marketplace value above 10 billion rupiahs and when working with local warehousing companies)
Toll road operators
Telecom device certification
Non-hazardous waste management
Raw medicine materials
Pharmaceutical ventures
Restaurants, bars, cafés
Film making
Film distribution
Cinemas (required to show Indonesian films at least 60 per cent of their screen time)
Direct selling
Futures trading

95% foreign ownership allowed
Plantation firms with more than 25 hectares of land integrated with a processing plant
Oil drilling and related

85% foreign ownership allowed
Leasing companies

67% foreign ownership allowed
Job training
Travel bureaus
Golf course developers
Flight logistics supporting businesses
Health care facilities and clinics
Medical instruments
Private museums
Catering
Convention centers and exhibitions
Consulting and construction businesses with contract values above 10 billion rupiahs
Telecom network providers with integrated telecom services.

51% foreign ownership allowed
Natural tourism management

49% foreign ownership allowed
Acupuncture
Land transportation
High voltage electric installation
Private security services
Air and sea ports
Taxi and bus services
Weapons and explosives production (with recommendation from the Minister of Defense)

40% foreign ownership allowed
Banks and financial services (requires special license)

Restricted/Closed
Defense sector (except weapons production)
Traffic information systems (air, maritime, land)
Alcoholic beverage production
Marijuana cultivation
Casinos
Historical and sacred sites
Chemical material industry that can damage the environment
Pre-design and consulting services
Architectural design services and architectural services
Utilisation of natural coral for aquariums, souvenirs and accessories
Small and medium enterprises
Any business with investment value of less than 10 billion rupiahs

(The list is a selection)

 

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