29 Sectors Opened to Foreign Ownership
In an attempt to attract more foreign investment into the economy, the Indonesian government has agreed to open up 29 previously closed or restricted business sectors to 100 percent foreign ownership.
Of the 29 sectors, 14 businesses, which were previously partly owned by foreign investors in the range of 49 to 95 percent, are now fully opened up. These include toll roads, non-toxic waste management, direct selling, cold storage, futures trading, restaurants, bars, cafes, sports centres, film studios, film processing laboratories, voice dubbing facilities for film and film copying businesses, and rubber crumb industry. The e- commerce sector, however, did not see any revision and continues to have investment caps. In addition, 15 sectors that were previously closed to foreign investors are now omitted from the negative investment list. These sectors are: film equipment, film editing, film script, film cinema, studio recording, film distribution, telecom kiosks, electronic equipment testing, e- commerce platform (marketplace, price grabber), raw materials for pharmaceuticals, health management consultation and services, health support services (medical equipment rent), laboratory clinics and medical check-up clinics.
As for e- commerce platforms, marketplaces with a value of over Rp.100 billion (US$7.5 million) are omitted from the negative investment list and foreign investors are allowed to own up to 100 percent. However, for e- commerce platforms with a value between Rp.10 billion and Rp.100 billion, foreign investors are entitled to ownership of up to 49 percent. This implies that e- commerce businesses with a value of less than Rp.10 billion, including startups, are closed to foreign ownership.
Meanwhile, the number of business sectors in which foreign investors are allowed to set up joint ventures with micro or small- and medium-sized enterprises and cooperatives totalled 110 sectors, from 62 previously.
Coordinating Minister for Economic Affairs Darmin Nasution said there are 83 sectors recommended to be opened for foreign investment. However, the government rejected the recommendations. They include budget, one-star and twostar hotels, motels, billiards or bowling establishments, and golf courses.
In the revised negative list, the government has added 19 sectors reserved for micro, small- and medium-sized enterprises and cooperatives (SMECs). The 19 various business sectors are valued below Rp.10 billion, including construction services. In the previous policy, foreign investors were allowed to have ownership of up to 55 percent.
In addition, there are 39 other sectors that were reserved for SMECs whose contract value is widened to Rp. 50 billion from previously Rp.1 billion. These include construction for commercial building, health facility building and others.