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Indonesia plans to ease foreign investment restrictions in 64 sectors, but increase restrictions in 21 others

On 15 February 2016, the Coordinating Ministry for Economic Affairs of Indonesia released a draft revision to the Indonesian Negative Investment List, also known as Daftar Negatif Investasi (DNI).

DNI sets out the list of business fields in Indonesia which are (i) closed from foreign investments or (ii) open for foreign investments with certain restrictions (such as a cap on foreign ownership). DNI was last revised in 2014.

The draft DNI revision states that 64 sectors would see easing in foreign investment restrictions:

35 sectors would be opened for 100% foreign ownership. These sectors include toll roads, restaurants, bar, cold storage, telecommunication device laboratory testing, etc.

  • 29 sectors would see an increase in foreign ownership cap to 67%. These sectors include catering, distribution business, air transport supporting services, health equipment calibration testing and maintenance, etc.
  • The draft DNI revision also states that 21 sectors would see increases in foreign investment restrictions. These sectors include coral exploitation for aquariums and other purposes, alcoholic beverage, casinos, museum, ozone depleting substances, etc.

In an interview with Reuters, Indonesian Trade Minister Tom Lembong stated, “[These] revisions represent our largest opening to international investment in 10 years. More international investment will bring more capital, more world-class expertise, more technologies to Indonesia.”

The complete revised DNI will only become effective and released to the public once the relevant Presidential Regulation is signed by President Joko Widodo, which is expected to happen within the first half of 2016.