29 June, 2016
New Negative List
The Government has enacted a new Negative List under Presidential Regulation No. 44 of 2016, which became effective on 18 May 2016 ("2016 Negative List"), although the 2016 Negative List became publicly available only on 23 May 2016. The 2016 Negative List is the implementation of the 10th Economic Package that was announced by the Government on 11 February 2016 ("10th Economic Package Announcement") (please see our prior client alert issued in February 2016).
The 2016 Negative List revokes the previous Negative List stipulated under Presidential Regulation No. 39 of 2014 ("2014 Negative List").
Although there are some differences between the information announced in the 10th Economic Package Announcement and the 2016 Negative List, the terms of the 2016 Negative List are generally consistent with the 10th Economic Package Announcement.
As required under Law No. 25 of 2007 on Capital Investment ("Investment Law"), the Government is required to determine the business lines that are closed to all investment (foreign and domestic), and the business lines that are open for investment (foreign and domestic) with requirements. In principle, all business lines are open to foreign investment, except for those sectors specifically mentioned in a "negative list" and other laws and regulations. This is specifically recognized in article 3 of the 2016 Negative List.
The 2016 Negative List has simplified the categories for the business lines that are open for investment (foreign and domestic) with requirements. The categories are now:
(a) Business lines that are reserved for or subject to partnership with micro, small and medium enterprises ("Local SME") as well as cooperatives ("Koperasi").
(b) Business lines with foreign ownership limitations.
(c) Business lines with location requirements.
(d) Business lines with special licensing requirements.
(e) Business lines reserved for 100% domestic (Indonesian) ownership.
(f) Business lines with a higher foreign ownership in the context of cooperation of the Association of Southeast Asian Nations (ASEAN).
Further, a "partnership" requirement is not intended to limit foreign ownership, but it is a requirement to establish a cooperation with a Local SME(s) when implementing investments in Indonesia. The cooperation is implemented based on a mutual agreement.
What the 2016 Negative List Says
Liberalization of Certain Sectors
There is significant liberalization under the 2016 Negative List namely:
Opening up of 45 business lines (by removing those business lines from the 2016 Negative List or otherwise requiring partnership or special licenses). These business lines are listed in Attachment 1.
Removing, for 83 business lines, the need for specific recommendation requirements from the relevant Ministries – for example, plantation seeding and plantations above 25 Ha.
Simplifying business lines categories. For example, there were 39 business lines for construction services business lines under the 2014 Negative List (e.g., warehouse construction, building construction, building reparation) which have been combined into 1 business line of "construction services".
Increasing the permitted foreign shareholding in certain business lines:
(a) 2 business lines have been increased from 33% to 67%;
(b) 23 business lines have been increased from 49% to 67%;
(c) 11 business lines have been increased from 51% to 67%;
(d) 3 business lines have been increased from 65% to 67%; and
(e) 26 business lines currently not open to foreign investment have been opened in varying percentages.
The above business lines are listed in Attachment 2.
Similar to the 2014 Negative List, the opening of foreign ownership or allowing higher foreign ownership for investors from ASEAN member States is maintained.
The Government has continued to recognize its obligations under the ASEAN Comprehensive Investment Agreement (ACIA) of 2009 under which investors that are natural persons or juridical persons of ASEAN member States ("ASEAN Investor") can enjoy a higher foreign ownership percentage in certain sectors.
A non-ASEAN company which owns or controls an ASEAN company may be able to avail itself of national treatment and investment market access privileges in an ASEAN company. However, a member State (such as Indonesia) may deny the benefits of the ACIA to an ASEAN Investor if, inter alia:
(a) a non-ASEAN investor owns or controls that ASEAN Investor and the ASEAN Investor has no substantive business operation in the territory of the host ASEAN member State;
(b) the ASEAN Investor is owned by an investor of the denying ASEAN member State and the ASEAN Investor has
no substantive operations in the territory of the host ASEAN member State; or
(c) the ASEAN Investor is owned by a non-ASEAN investor and the denying ASEAN member State has no diplomatic relations with the country of the non-ASEAN investor.
Indonesia has limited experience in applying these criteria and it remains to be seen if the Investment Coordinating Board ("BKPM") will look through and seek to deny an application by an ASEAN Investor on the above grounds.
In the immediate term, subject to tax planning and specific advice, (i) it would be appropriate for the ASEAN Investor to be owned or controlled by ASEAN based investors (control is defined as the power to name a majority of directors of the ASEAN Investor or legally direct the actions of the ASEAN Investor), and (ii) the ASEAN Investor should have substantive business operations in its ASEAN country of origin. Sectors with higher foreign ownership limitations
under the ASEAN Investor scheme are set out in Attachment 3.
Investments in sectors categorized as open for investment (foreign and domestic) with requirements will be categorized as open to foreign investment if the investment is implemented in special economic zones determined by the Government. However, this treatment will not apply to business lines that have been reserved for Local SME and Koperasi.
Changes from the 10th Economic Package Announcement
As mentioned above, there are several changes between the information in the 10th Economic Package Announcement and the 2016 Negative List. Some of the changes are:
the business line of staple food (pangan pokok) plantation seeding with an area of more than 25 Ha is not reserved for Local SMEs, so this business line is still limited to 49% foreign investment; and
the business line of healthcare research center is excluded from the 2016 Negative List with the intention that this business line should be conducted by the Government instead of private companies.
Restricted Business Lines
There are business lines which are now specifically closed, have increased minimum project value requirements, or where the permitted foreign investment has been reduced. These include:
Specifically closing investment for 2 business lines of (i) usage (taking) and distribution of: coral/decorative coral from the nature for aquarium and coral/recent death coral from transplantation/propagation result and (ii) lifting of valuable items from a sunken ship’s cargo.
Providing more protection for Local SMEs and Koperasi, by among other things:
(a) Reserving additional 19 business lines for Local SMEs under the public work sector (i.e., business service/construction consultant service using low or medium technology and/or low or medium risk and/or the project value is less than IDR10 billion) – for example, predesign and architecture consultancy services, architecture design services and contract administration services; previously foreign investment was permitted up to 55%.
(b) Increasing the project values of 39 business lines under the public work sector (i.e., construction services (construction implementation service) using low and medium technology and/or low and medium risk and/or the project value is up to IDR50 billion) that are reserved for Local SMEs from IDR1 billion to IDR50 billion – essentially, this means foreign owned construction services companies can only qualify for projects with a value of over IDR50 billion.
(c) Adding 3 business lines that require a partnership with a Local SME or otherwise in the form of a plasma cooperation, namely:
sugar industry (white sugar, refined sugar, raw sugar);
salting/drying fish and other water biota industry; and
retail trading through mail order or the internet.
The above business lines are listed in Attachment 4.
Reducing the permitted foreign investment in 2 business lines. These business lines are:
(a) Reducing the permitted foreign shareholding in the business line of provision and business for crossing harbors to become 49% – previously 100% foreign ownership.
(b) Reducing the permitted foreign shareholding in the business line of provision and business for and lake harbors to become 49% – previously 100% foreign ownership.
Grandfathering/Restructurings
The prior grandfathering provisions remain, thereby protecting prior approved investment if there has been a reduction in the permitted level of foreign investment in the 2016 Negative List. The position of BKPM is that business lines that have been grandfathered will still be permitted to a conduct business expansion.
Applicability of the Negative List to Public Listed Companies
The position remains unchanged. The 2016 Negative List does not apply to "indirect or portfolio investment", (being a restatement of the elucidation under article 2 of the Investment Law). Although the 2016 Negative List has tried to emphasize that indirect or portfolio investment in companies (engaged in business lines that are open for investment with requirements) through domestic capital market will be exempted from the requirements (meaning the business lines will be open for investment), there are no provisions in the 2016 Negative List removing the ambiguity of the phrase "indirect or portfolio investment" and how in practice the list is applied. Consequently the current market practice will prevail.
Monitoring, Evaluation and Resolution of Investment Issues
As mentioned in the 10th Economic Package Announcement, to monitor, evaluate and resolve investment issues, the Government will establish, under a separate Presidential Decree, a National Team for the Enhancement of Export and Investment. The National Team will be under the coordination of the Coordinating Minister in the field of Economic Affairs (Menteri Koordinator Bidang Perekonomian).
Conclusion
In general, the Government is giving a positive signal that Indonesia is more open, and the terms of the 2016 Negative List are consistent with what had been previously announced in the 10th Economic Package Announcement.
For domestic investors, the following should be considered as a result of the proposed foreign investment liberalization:
(a) identify any threats that may arise given increase competition;
(b) identify any new opportunities in establishing a joint venture with foreign investors; or
(c) identify any call option(s) under which foreign shareholders may be entitled to, in order to increase their shareholdings in joint ventures.
For foreign investors, the things to consider are:
(a) identify opportunities to invest in Indonesia given the additional liberalized sectors (either wholly owned or through joint ventures);
(b) assess the possibility of increasing shareholdings in existing joint ventures (and for certain business lines this will allow financial consolidation), whether through negotiation or the exercise of call options or the conversion of convertible financing instruments; or
(c) assess the possibility (if appropriate) to remove the small shareholdings held by Indonesian investors (e.g., where foreign investment is now open 100%).
Despite various lobbying with the Government to specifically exempt indirect or portfolio investment through the domestic capital market, the Government may have taken a status quo position on this issue by not further clarifying the phrase "indirect or portfolio investment" in the 2016 Negative List. Consequently, current market practice will prevail. However, continuous monitoring is required on how this ambiguity is viewed in the future.
The effectiveness of the National Team for the Enhancement of Export and Investment will also be a key factor to ensure that the entire economic stimulus packages that have been issued by the Government are monitored and implemented accordingly.
Hopefully the (i) opening of certain business lines to foreign investors, and (ii) the protection given to businesses conducted by domestic investors, Local SMEs and Koperasi, will provide more certainty when investing into Indonesia.
Attachment 1 Liberalized Business Lines
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
1. |
Maritime and Fishery |
Coral breeding/cultivation |
Limited to 49% foreign investment |
Open 100% foreign investment, but requires a recommendation from the Ministry of Environmental and Forestry |
|
2. |
Energy and Mineral Resources |
Biomass pellet producing industry for energy |
Partnership with Local SMEs |
Open 100% foreign investment |
|
3. |
Industry |
Salting/drying fish and other water biota industry |
Reserved for Local SMEs |
Open 100% foreign investment, but requires a partnership with Local SMEs |
|
4. |
Sugar Industry (white crystal sugar, refined crystal sugar and raw crystal sugar) |
Limited to 95% foreign investment, but requires a sugarcane plantation before constructing a new sugar mill or expanding a sugar mill |
Open 100% foreign investment, but requires a partnership in the form of 20% plasma core of the total land area |
|
|
5. |
Crumb rubber industry |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment, but requires a special license from the Minister of Industry provided that it is integrated with the development of crumb rubber plantation:
|
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
6. |
Public Work |
Toll road business |
Limited to 95% foreign investment |
Open 100% foreign investment |
|
7. |
Non-hazardous waste management and disposal |
Limited to 95% foreign investment |
Open 100% foreign investment |
|
|
8. |
Trade |
Direct selling through marketing network developed by business partners |
Limited to 95% foreign investment |
Open 100% foreign investment |
|
9. |
Retail trade through mail order or internet (for certain goods), namely:
|
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment, but requires a partnership with Local SMEs |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
10. |
Trade |
Distribution (affiliated with production) |
Limited to 33% foreign investment |
Open 100% foreign investment |
|
11. |
Cold storage |
Limited to (i) 33% foreign investment in Sumatra, Java and Bali and (ii) 67% foreign investment in Kalimantan, Sulawesi, Nusa Tenggara, Maluku and Papua |
Open 100% foreign investment |
|
|
12. |
Futures Broker |
Limited to 95% foreign investment |
Open 100% foreign investment |
|
|
13. |
Tourism and Economy Creative |
Restaurant |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Open 100% foreign investment |
|
14. |
Bar |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
|
15. |
Cafe |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
|
16. |
Swimming pool |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
17. |
Tourism and Economy Creative |
Football field |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
18. |
Tennis court |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
|
19. |
Fitness Center |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
|
20. |
Sport Center |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
|
21. |
Other sport activities |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Open 100% foreign investment |
|
|
22. |
Film taking studio |
Limited to 49% foreign investment |
Open 100% foreign investment |
|
|
23. |
Film processing laboratory |
Limited to 49% foreign investment |
Open 100% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
24. |
Tourism and Economy Creative |
Film voice dubbing facility |
Limited to 49% foreign investment |
Open 100% foreign investment |
|
25. |
Film printing and/or duplication facility |
Limited to 49% foreign investment |
Open 100% foreign investment |
|
|
26. |
Film taking facility |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
27. |
Film editing facility |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
28. |
Film subtitling facility |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
29. |
Film production |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
30. |
Movie theatre |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
31. |
Recording studio (Cassette, VCD, DVD, etc.) |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
32. |
Film distribution |
Closed for foreign investment (100% domestic ownership) |
Open 100% foreign investment |
|
|
33. |
Transportation |
Salvage service and/or underwater work (PBA) |
Limited to 49% foreign investment |
Open 100% foreign investment, but requires a special license from the Ministry of Transportation |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
34. |
Communication and Informatics |
Telecommunication kiosk |
Reserved for Local SMEs |
Open 100% foreign investment |
|
35. |
Establishment of testing telecommunication device agency (laboratory test) |
Limited to 95% foreign investment |
Open 100% foreign investment |
|
|
36. |
Trade Transaction Operator through Electronic System (market place on a platform basis, daily deals, price grabber, online classified advertising) with investment less than Rp100,000,000,000 |
Not included |
Limited to 49% foreign investment Open 100% foreign investment. if more than Rp100,000,000,000 |
|
|
37. |
Health |
Medicine raw material industry |
Limited to 85% foreign investment |
Open 100% foreign investment |
|
38. |
Business and management consulting services and/or hospital management services |
Limited to 67% foreign investment |
Open 100% foreign investment |
|
|
39. |
Supporting health services (medical equipment rental) |
Limited to 49% foreign investment |
Open 100% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
40. |
Health |
Clinic laboratory |
Limited to 67% foreign investment |
Open 100% foreign investment |
|
41. |
Medical checkup clinic |
Limited to 67% foreign investment |
Open 100% foreign investment |
|
|
42. |
Healthcare equipment industry: Class B (i.e., surgical masks, syringes, patient monitors, condoms, surgical gloves, hemodialysis fluids, PACS, surgical knife) |
Not included |
Open 100% foreign investment, but requires a special license from the Ministry of Health |
|
|
43. |
Healthcare equipment industry: Class C (i.e., IV Catheter, X-Ray, ECG, Patient Monitor, Orthopedic Implants, Contact Lens, Oximeter, densitometer) |
Not included |
Open 100% foreign investment, but requires a special license from the Ministry of Health |
|
|
44. |
Healthcare equipment industry: Class D (i.e., MRI, CT Scan, Cardiac Catheters, Cardiovascular Stents, HIV Test, Pacemaker, Dermal |
Not included |
Open 100% foreign investment, but requires a special license from the Ministry of Health |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
Health |
Filler, Ablation Catheter) |
|||
|
45. |
Stem cell banks and laboratories |
Not included |
Open 100% foreign investment, but requires a special license from the Ministry of Health |
Business Lines with Increased Permitted Foreign Shareholding
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
1. |
Energy and Mineral Resources |
Geothermal power plant ≤ 10 MW |
Not included |
Limited to 67% foreign investment |
|
2. |
Construction and Installation of electric power: Installation of high/extra high voltage electric power utilization |
Not included |
Limited to 49% foreign investment |
|
|
3. |
Electric power installation operation and maintenance: High/extra high voltage electric power installation examination and testing |
Not included |
Limited to 49% foreign investment |
|
|
4. |
Public Work |
Construction service (construction implementation service) using advanced technology and/or high risk and/or the project value is more than Rp50,000,000,000 |
Limited to 67% foreign investment. The threshold for the project value was up to Rp1,000,000,000 |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states The threshold for the project value is increased up to Rp50,000,000,000 |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
5. |
Public Work |
Business service/ construction consultant service using advanced technology and/or high risk and/or the project value is more than Rp10,000,000,000 |
Limited to 55% foreign investment There was a reference to "business service/ construction consultant service" only However, there is no reference to "advanced technology and/or high risk and/or the project value is more than Rp10,000,000,000" |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states A new reference to "… advanced technology and/or high risk and/or the project value is more than Rp10,000,000,000" is introduced |
|
6. |
Trade |
Department store with selling floor of 400 m2 – 2,000 m2 |
Closed for foreign investment (100% domestic ownership) |
Limited to 67% foreign investment, but requires a special license from the Ministry of Trade with the following requirements:
|
|
7. |
Distribution (not affiliated with production) |
Limited to 33% foreign investment |
Limited to 67% foreign investment |
|
|
8. |
Warehousing |
Limited to 33% foreign investment |
Limited to 67% foreign investment |
|
|
9. |
Tourism and Economy Creative |
Museum management |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
10. |
Management of historical and ancient heritage such as temples, palaces, inscriptions, |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
Tourism and Economy Creative |
historical sites and ancient buildings |
|||
|
11. |
Tourism travel bureau |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
12. |
Catering services |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
13. |
Motel |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs); or limited to 70% for investors from ASEAN member states (no contradiction with regional regulations and located in Java island and Bali) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
14. |
Billiard hall |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
15. |
Bowling alley |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
16. |
Golf court |
1. Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if |
Limited to 67% foreign investment; |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
Tourism and Economy Creative |
partnership with local SMEs)
|
states |
||
|
17. |
Art impresario services |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 60% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
18. |
Meeting, Incentive, Conference, and Exhibition (MICE) |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
19. |
Transportation |
Land transportation for passengers in route (i.e., inter-city and inter-province transportation; rural transportation; inter-city in province transportation; urban/rural transportation; and cross-country border transportation) |
Closed for foreign investment (100% domestic ownership) |
Limited to 49% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
20. |
Transportation |
Land transportation for passengers which is not in route (i.e., taxi; tourism transportation; certain destination transportation; and certain area transportation) |
Closed for foreign investment (100% domestic ownership) |
Limited to 49% foreign investment |
|
21. |
Terminal supporting business |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
22. |
Air transportation supporting service (reservation system via computer, ground handling for passenger and cargo and aircraft leasing) |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
23. |
Airport related services |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
24. |
Unloading/loading cargo (maritime cargo handling services |
Limited to 49% foreign investment; or limited to 60% for investors from ASEAN member states |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states which is only applicable to 4 ports in eastern part of Indonesia, namely:
|
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
Transportation |
c. Kupang port; and d. Sorong port |
|||
|
25. |
Freight forwarding services |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
26. |
Air cargo services |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
27. |
General selling agent (GSA) for foreign air transportation company |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
28. |
Communication and Informatics |
Fixed telecommunication network provider |
Limited to 65% foreign investment |
Limited to 67% foreign investment |
|
29. |
Mobile telecommunication network provider |
Limited to 65% foreign investment |
Limited to 67% foreign investment |
|
|
30. |
Telecommunication network provider integrated with telecommunication services |
Limited to 65% foreign investment |
Limited to 67% foreign investment |
|
|
31. |
Content services (ringtone, premium sms, etc.) |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
32. |
Call center and other added value telephony services |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
33. |
Communication and Informatics |
Internet services provider |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
34. |
Data communication system services |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
35. |
Telephony internet services for public |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
36. |
Internet interconnection services (NAP), other multimedia services |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
|
37. |
Trade Transaction Operator through Electronic System (market place on a platform basis, daily deals, price grabber, online classified advertising) with investment less than Rp100,000,000,000 |
Not included |
Limited to 49% foreign investment Open 100% foreign investment. if more than Rp100,000,000,000 |
|
|
38. |
Manpower |
Work training (to provide, obtain, enhance and develop work competency, productivity, discipline, attitude |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
Manpower |
and work ethics among others in the area of technical and engineering, business administration, language, tourism, management, information technology, art and agriculture vocation directed to provide the work force in entering work) |
|||
|
39. |
Health |
Healthcare equipment testing |
Limited to 49% foreign investment |
Limited to 67% foreign investment |
|
40. |
Pest control/fumigation services |
Closed for foreign investment (100% domestic ownership) |
Limited to 67% foreign investment |
|
|
41. |
Medic evacuation and ambulance services |
Closed for foreign investment (100% domestic ownership) |
Limited to 67% foreign investment |
|
|
42. |
Main clinic: (i) clinic specialized medical services; (ii) clinic specialized dental services; (iii) nursing services; and (iv) other hospital services (mental |
Limited to 67% foreign investment if throughout Indonesia; or limited to 70 % foreign investment if in capital cities of eastern part of Indonesia (save for Makassar and Manado) For nursing services, limited to (i) 49% foreign investment throughout Indonesia, (ii) 51% foreign investment in Makassar and Manado or (ii) 70 % |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states This business line can be conducted in all capital cities of eastern part of Indonesia (save for Makassar and Manado) |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
Health |
rehabilitation clinic) |
foreign investment in capital cities of eastern part of Indonesia For other hospital services (mental rehabilitation clinic), limited to 67% foreign investment if throughout Indonesia |
||
|
43. |
Healthcare equipment distribution |
Not included |
Limited to 49% foreign investment, but requires a special license from the Ministry of Health |
|
|
44. |
Health equipment industry: Class A (i.e., cotton bandages, gauze, sticks, IV pole, sanitary napkins, adult diapers, patient bed, wheelchair) |
Not included |
Limited to 33% foreign investment, but requires a special license from the Ministry of Health |
Business Lines with Increased Permitted Foreign Shareholding from ASEAN Member States
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
1. |
Forestry |
Nature tourism business such as facility, activity and ecotourism business in forest areas including water tourism, nature adventure tourism and cave tourism |
Limited to 51% foreign investment |
Limited to 51% foreign investment; or limited to 70% for investors from ASEAN member states |
|
2. |
Public Work |
Construction service (construction implementation service) using advanced technology and/or high risk and/or the project value is more than Rp50,000,000,000 |
Limited to 67% foreign investment The threshold for the project value was up to Rp1,000,000,000 |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states The threshold for the project value is increased up to Rp50,000,000,000 |
|
3. |
Business service/ construction consultant service using advanced technology and/or high risk and/or the project value is more than Rp10,000,000,000 |
Limited to 55% foreign investment There was a reference to "business service/ construction consultant service" only However, there is no reference to "advanced technology and/or high risk and/or the project value is more than Rp10,000,000,000" |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states A new reference to "… advanced technology and/or high risk and/or the project value is more than Rp10,000,000,000" is introduced |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
4. |
Trade |
Survey on people’s opinion and market research |
Closed for foreign investment (100% domestic ownership); or limited to 51% for investors from ASEAN member states |
Closed for foreign investment (100% domestic ownership); or limited to 70% for investors from ASEAN member states |
|
5. |
Tourism and Creative Economy |
Museum management |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
6. |
Tourism travel bureau |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
7. |
Catering services |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
8. |
Motel |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs); or limited to 70% for investors from ASEAN member states (no contradiction with regional regulations and located in Java island and Bali) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
9. |
Pool house (billiard) |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
10. |
Tourism and Creative Economy |
Bowling alley |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
11. |
Golf court |
|
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
12. |
Art impresario services |
Limited to 49% foreign investment (no contradiction with regional regulations); or limited to 51% foreign investment (if partnership with local SMEs) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
13. |
Meeting, Incentive, Conference, and Exhibition (MICE) |
Limited to 51% foreign investment (no contradiction with regional regulations) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states |
|
|
14. |
Film promotional facility (advertisement, poster, stills, photo, slide, negative, |
Closed for foreign investment (100% domestic ownership); or limited to 51% for investors from ASEAN member states |
Closed for foreign investment (100% domestic ownership); or limited to 51% for investors from ASEAN member states |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
banner, pamphlet, giant banner, folder, etc.) |
||||
|
15. |
Transportation |
Overseas sea transportation for passengers (excluding cabotage) |
Limited to 60% for investors from ASEAN member states |
Limited to 70% for investors from ASEAN member states |
|
16. |
Overseas sea transportation for cargo (excluding cabotage) |
Limited to 60% for investors from ASEAN member states |
Limited to 70% for investors from ASEAN member states |
|
|
17. |
Unloading/loading cargo (maritime cargo handling services) |
Limited to 49% foreign investment; or limited to 60% for investors from ASEAN member states |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states which is only applicable to 4 ports in eastern part of Indonesia, namely: a. Bitung port; |
|
|
18. |
Health |
Hospital (formerly specialist/sub- specialist hospital services) |
Limited to 67% foreign investment if throughout Indonesia; or limited to 70 % foreign investment if in capital cities of eastern part of Indonesia (save for Makassar and Manado) |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states This business line can be conducted in all capital cities of eastern part of Indonesia (save for Makassar and Manado) |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
19. |
Health |
Main clinic: (i) clinic specialized medical services; (ii) clinic specialized dental services; (iii) nursing services; and (iv) other hospital services (mental rehabilitation clinic) |
Limited to 67% foreign investment if throughout Indonesia; or limited to 70 % foreign investment if in capital cities of eastern part of Indonesia (save for Makassar and Manado) For nursing services, limited to (i) 49% foreign investment throughout Indonesia, (ii) 51% foreign investment in Makassar and Manado or (ii) 70 % foreign investment in capital cities of eastern part of Indonesia For other hospital services (mental rehabilitation clinic), limited to 67% foreign investment if throughout Indonesia |
Limited to 67% foreign investment; or limited to 70% for investors from ASEAN member states This business line can be conducted in all capital cities of eastern part of Indonesia (save for Makassar and Manado) |
Business Lines with Increased Minimum Project Values (Protection for Local SMEs)
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
1. |
Public Work |
Construction service (construction implementation service) using low and medium technology and/or low and medium risk and/or the project value is up to Rp50,000,000,000 |
Reserved for local SMEs The threshold for the project value was up to Rp1,000,000,000 |
Reserved for local SMEs The threshold for the project value is increased up to Rp50,000,000,000 This category consists of 39 specific business lines |
|
2. |
Business service/ construction consultant service using low or medium technology and/or low or medium risk and/or the project value is less than Rp10,000,000,000 |
Limited to 55% foreign investment There was a reference to "business service/ construction consultant service" only However, there is no reference to "…simple technology and/or low risk and/or the project value is less than Rp10,000,000,000" |
Reserved for local SMEs A new reference to "…simple technology and/or low risk and/or the project value is less than Rp10,000,000,000" is introduced This category consists of 19 specific business lines |
|
|
3. |
Industry |
Salting/drying fish and other water biota industry |
Reserved for Local SMEs |
Open 100% foreign investment, but requires a partnership with Local SMEs |
|
No |
Sector |
Business Lines |
2014 Negative List |
2016 Negative List |
|
4. |
Industry |
Sugar Industry (white crystal sugar, refined crystal sugar and raw crystal sugar) |
Limited to 95% foreign investment, but requires a sugarcane plantation before constructing a new sugar mill or expanding a sugar mill |
Open 100% foreign investment, but requires a partnership in the form of 20% plasma core of the total land area |
|
5. |
Trade |
Retail trade through mail order or internet (for certain goods), namely:
|
