An analysis of indonesias open foreign investment regime

Foreign investors must also comply with regulations on various other issues, such as environmental protection, manpower, and zoning.

An analysis of indonesias open foreign investment regime

Indonesian government officials welcome increased FDI, aiming to create jobs and spur economic growth, and court foreign investors, notably focusing on infrastructure development and export-oriented manufacturing. However, vague and conflicting regulations, poor existing infrastructure, rigid labor laws, sanctity of contract issues, and corruption remain significant concerns for foreign investors.

The Investment Coordination Board, or BKPM, serves as an investment promotion agency, a regulatory body, and the agency in charge of approving planned investments in Indonesia.

As such, it is the first point of contact for foreign investors, particularly in manufacturing, industrial, and non-financial services sectors. The Negative Investment List aims to consolidate FDI restrictions from numerous decrees and regulations, in order to create greater certainty for foreign and domestic investors.

The revision to the list eased restrictions in a number of previously closed or restricted fields. The list also raises the foreign investment cap in the following sectors, though not fully to percent: For investment in certain sectors, such as mining and higher education, the Negative Investment List is useful only as a starting point, as additional licenses and permits are required by individual ministries.

A number of sectors remain closed to foreign investment or are otherwise restricted. The salvage of undersea artifacts from shipwrecks was added to the list of fields closed to both domestic and foreign investment.

In NovemberBank Indonesia BI introduced a regulation imposing a foreign ownership limit of 20 percent for companies that offer electronic payment services.

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Foreigners may purchase equity in state-owned firms through initial public offerings. Capital investments in publicly listed companies through the stock exchange are not subject to Indonesia's Negative Investment List unless an investor is buying a controlling interest.

Business Facilitation Business Registration The Investment Coordination Board, or BKPM, serves as an investment promotion agency, a regulatory body, and the agency in charge of approving planned investments in Indonesia.

An analysis of indonesias open foreign investment regime

As such, it is the first point of contact for foreign investors, particularly in manufacturing, industrial, and non-financial services sector. In order to conduct business in Indonesia, foreign investors must be incorporated as a foreign-owned limited liability company in Indonesia PMA.

To apply for a principle license, investors must provide: Once an investor has obtained a principle license he may apply for a business license.

At this stage, investors must: Previously the business registration process averaged days. After obtaining a principle investment license, investors in some designated industrial estates can directly start construction on projects.

Other licenses such as construction environment permits can be applied for in parallel with construction, though they must still be obtained before commercial production commences.Demonstrations, one feature of an open democratic society, take place almost on a daily basis in Indonesia, albeit usually small-scale.

Matters that are protested against range from political issues (such as perceived weak government performance) and economic issues (such as low wages) to social issues (such as religious matters).

The paper offers an in-depth case study of Indonesia using extensive exploratory data analysis on FDI inflows into Indonesia. As discussed in the paper, the data investigation uses and reconciles available FDI data both from national and international sources to understand the usefulness of such data for policy analysis.

Indonesia - 1-Openness to and Restriction on Foreign Investment | ashio-midori.com

Indonesia opened 35 business sectors to full foreign ownership and raised allowable foreign stakes in dozens of others, as part of a bid to draw more investment. For instance, under the current Negative Investment List (see our June bulletin), a wholesale distribution business not affiliated with manufacturing is only open to 67% foreign ownership.

Previously, such a line of business was open to % foreign ownership but the foreign ownership level applicable to this line of business has since.

A list of sectors which are closed or partially open under certain conditions to foreign investment is available in the Indonesia's Investment Law. Learn more about Foreign Investment in Indonesia on ashio-midori.com, the Directory for International Trade Service Providers.

Indonesia’s foreign direct investment regime

3. Analysis of FDI Inflows The introduction of New Economic Policy in July, has resulted in attraction of greater FDI inflows into India. The liberalization of foreign investment policy has resulted in an upward trend in FDI inflows, although the inflows have also witnessed fluctuations in the recent years.

Indonesia - 1-Openness to and Restriction on Foreign Investment | ashio-midori.com