The Indonesian government has released its 10th economic policy package designed to boost investment by removing the foreign ownership limit on 35 industrial sectors, and to protect small and medium enterprises (SMEs) by restricting foreign investment in 20 other sectors.
The government said the new policy is expected to generate more job opportunities by attracting more foreign capitalists, and to sharpen the competitive edge of local firms by encouraging creativity, innovation, and the ability to absorb new technology.
Under the new policy, the so-called negative investment list of 2014 has been revised to allow foreign investors to own a 100% stake in some businesses in the tourism industry, said Coordinating Minister for Economic Affairs Darmin Nasution in a press conference on February 11.
These include restaurants, bars, cafes, art and entertainment firms, and sports centers. However, spas are capped at 51% foreign ownership.
Plantation firms having over 25 hectares of land and a processing plant may also be foreign owned up to 95%. Some types of businesses, including leasing companies, will be allowed 85% ownership.
Foreign businesses may now also acquire a 67% share in health support services, job training services, travel bureaus, golf course developers, flight logistics supporting businesses, private museums, catering businesses, convention centers and exhibitions, consulting and construction businesses, as well as certain telecommunications network providers.
Meantime, other sectors are available for up to 49% foreign stake, such as those in acupuncture, land transportation, and high-voltage electricity.
On the other hand, the revised investment list restricts or denies foreign direct investments in 20 industrial sectors, up from the previous 16, in order to give SMEs some buffer from the stiff competition. Off-limits to FDIs include pre-design and consulting services, architectural design services, and SMEs with capitalization of less than IDR10 billion.
