In order to accelerate economic growth, the Indonesian government has taken many major steps. One of them is to increase foreign investment by relaxing negative investment. This new policy allows foreign-funded enterprises to own only 64% of the shares at first, but now they can own 83% of the shares.
In fact, in Economic Policy Package XVI, the government has added 100% of the business areas that are open to foreign direct investment to the list. With this policy, the government expects that the industrial sector, especially small and medium-sized enterprises, will have significant growth.
Closed Business Fields for Foreign Capital Companies
In 2018, the government saw significant developments in the investment sector. Likewise, foreign investor confidence in Indonesia is considered to be increasing. That is why the government ensures that there are only eight business fields closed to foreign capital companies, namely:
- Cannabis cultivation.
- Catching certain types of fish.
- Taking or utilizing live or dead corals from the wild.
- Lifting of valuable objects on a sunken ship.
- The chemical industry pollutes the environment.
- Chemical weapons industry.
- Liquor / alcoholic industry.
- Gambling or casino business.
List of Business Fields that a Foreign Capital Company may Own
In the following business areas, foreign businessmen no longer need to have joint ventures with Indonesian residents, and can completely 100% own the company as a sole proprietorship, specifically involving 25 business areas, namely:
- Business in the nature tourism sector takes the form of exploiting ecotourism activities and services as well as facilities in forest areas.
- Survey and market research services.
- The job training sector, including the development of work competencies, productivity, and work ethic. For example, in the fields of technology and engineering vocational, commerce, language, tourism, information technology, and agriculture with the aim of equipping the workforce to enter the world of work.
- Art gallery area.
- Performing arts field.
- The human transportation business segment uses non-route land transportation, transportation with certain majors in the transportation sector, and tourism transportation.
- Overseas sea transport for passengers (excluding cabotage) in the Transportation sector
- Data communication system services sector.
- Fixed telecommunications network operating sector.
- The communication and information sector in the operation of mobile telecommunications networks.
- Content services telecommunications services.
- Information service center or call center services and other value-added telephone services.
- Internet access service sector.
- Internet telephone services for the public interest.
- Internet interconnection services (NAP) and other multimedia services.
- Provision, utilization, inspection, and submission of electrical power installations, including high voltage / extra high voltage electricity.
- Finished drug pharmaceutical industry.
- Acupuncture service facilities.
- Pest control/fumigation service sector.
- Oil and gas construction services.
- Geothermal survey services sector.
- Oil and gas drilling services at sea.
- Geothermal drilling services.
- Geothermal operation and maintenance services sector.
- Power generation sector> 10 MW.
Therefore, for those foreigners who want to set up a foreign-funded enterprise, first of all, please make sure that the business area to be involved is no longer in the negative investment list, and determine whether it can be 100% sole proprietorship to ensure that your business can run normally.