Presidential
Regulation No. 39 of 2014 on The List of Business Fields that are Closed or
Conditionally Open for Investment (“Negative List”) was
issued and became effective on 24 April 2014. This new negative investment list
revises and replaces the previous Negative list which was released in 2010. The
new Negative List revises the components of the 2010 list classified as: a)
closed for investment; and b) conditionally open for investment. The business
fields covered by the Negative List are in a wide variety of sectors with
perhaps the most influential changes being in the energy and mineral resources,
trade (in particular, distribution), agriculture, power and pharmaceutical
fields.
Business sectors that are not mentioned in the Negative List are, in theory, considered completely open to investment from non-Indonesian investors but this is not necessarily the case in practice. Article 3 of the Negative List confirms that business sectors that are not specifically mentioned are unconditionally open for investment. However, we consider that it would be prudent to re-confirm with BKPM (as the government institution that administers the enforcement of the foreign ownership limitations provided in the Negative List other than those in the banking, finance and mining sectors) that there is no unwritten policy in place, or condition imposed, that restricts foreign investment into business lines that are not listed in the Negative List. Where new business sectors have been introduced, although a new foreign ownership limit may now apply where previously there was no formal restriction, investors at least have some certainty as to what restriction or condition applies.
The business fields that are conditionally open for investment and the existing business fields where there is now greater or less flexibility include the following:
|
List
of Business Fields That Are Closed to Investment |
|
|
Field |
Business Field |
|
Agriculture |
Growing of
Marijuana |
|
Forestry |
1. Fishing of species
of fish listed in Appendix 1 of CITES 2. Gathering
(taking) of coral from nature for construction materials/lime/calcium and
souvenirs/jewelry as well as living coral or dead coral (recently dead coral)
from nature. |
|
Industry |
1. Manufacture of
chemicals that damage the environment: 1. Mercury processed
Chlorine Alkali 2. Manufacture of
active ingredients of pesticides 3. Industrial
chemicals: Polychlorinated Biphenyl (PCB),
Hexachlorobenzene 4. Manufacture of
the ozone depleting substances listed in President Regulation No.39/2014 2. Chemical Material
Industry Schedule 1 Chemical Weapons Convention (Sarin, Soman, TabunMustard,
Levisite, Ricine, Saxitoxin, VX, etc) 3. Manufacture of
Alcoholic Beverages (Hard Liquor, Wine, and Malt Containing Beverages) |
|
Transportation |
1. Provision and
operation of terminals for passenger land transport 2. Provision and
operation of Weight Stations 3. Telecommunication/aids
to shipping navigation and vessel traffic information system (VTIS) 4. Provision of air
navigation services 5. Performance of
testing of Motor Vehicle |
|
Communication and
Informatics |
Management and
implementation of radio frequency spectrum and satellite orbit monitoring
stations |
|
Education and
Culture |
1. Governmental
museums 2. Historical and archaeological
remains (temples, Sultan’s palace, inscriptions, ruins, ancient buildings,
etc) |
|
Tourism and
Creative Economy |
Gambling/casinos |
The business fields that are conditionally open for investment and the existing business fields where there is now greater or less flexibility include the following:
|
Business
Field |
New
Maximum |
Old
Maximum |
|
Energy and
mineral resources |
||
|
Electricity
installation testing and maintenance |
Closed |
100% |
|
Electricity
installation in building and civil construction |
Closed |
95% |
|
Power plants
producing >10 MW built under a Public Private Partnership (PPP) project |
100% |
95% |
|
Power plants
producing 1-10 MW |
49% |
Uncapped with
domestic partner |
|
Electricity
transmission and distribution PPP project |
100% |
95% |
|
Land drilling
services |
Closed |
95% |
|
Offshore oil and
gas drilling |
75% |
95% |
|
Certain oil and
gas support services |
Closed |
95% |
|
Certain oil and
gas construction services |
Closed |
95% |
|
Geothermal
surveying |
95% |
100% |
|
Trade |
||
|
Postal and online
retail shopping |
Closed |
Unregulated |
|
Distribution,
warehouse and cold storage (except cold storage in area listed below) |
33% |
100% |
|
Cold storage
business in Kalimantan, Sulawesi, Nusa Tenggara, Maluku and Papua |
67% |
100% |
|
Transportation |
||
|
Construction of
land terminals (eg passenger land transport terminals and general cargo
terminals) |
49% |
Closed |
|
Motor vehicle
testing |
49% |
Closed |
|
Provisions of
port facilities built under a Public Private Partnership (PPP) project |
95% |
49% |
|
Communication and
informatics |
||
|
Advertising
companies (for ASEAN investors only) |
51% |
Closed |
|
Fixed and
multi-media integrated telecommunication networks |
65% |
100% |
|
Call centers and
other telephony services |
49% |
Uncapped with
domestic partner |
|
Communication
data systems |
49% |
95% |
|
Multimedia
content |
49% |
Uncapped with
domestic partner |
|
Finance |
||
|
Venture capital |
85% |
80% |
|
Health |
||
|
Pharmaceutical
companies |
85% |
75% |
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