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.

Indonesia Expat - - BUSINESS PROFILE -

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.

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