From Government of Indonesia

Details of Investment List Issued

The government has issued its latest “priority investment list”, which sets out a more comprehensive description of which business sectors are opened and closed to investors.

The new list, required under the recently enacted Investment Law, governs a total of 338 business sectors, of which Trade Minister Mari Pangestu said 69 sectors would now be more open than before, with 11 becoming more restrictive, The Jakarta Post reported Thursday (5/7/07).

The previous 2000 and 2001 “negative investment lists” were less detail which only consist of 83 sectors.

The list increases the number of closed sectors to 25 from 11 previously to protect the national interest in such areas as public health, the environment, culture and natural biodiversity. It also prioritizes 43 sectors for small and medium enterprises (SMEs).

Other sectors will, however, be more open to foreign investors than before. Under the new rules, non-national investors will be allowed to take controlling stakes in banks (up to 99%), the power sector, oil and gas industry, toll road operators, water companies, agriculture and plantation firms (95%), insurance firms (80%), the pharmaceutical industry (75%), health services (65%) and construction (55%).

In the telecommunications sector, foreign investors will be allowed to own up to 65% of cellular operators, but only 49% of fixed-line phone companies.

The list, which came into effect on Tuesday (3/7/07), apply only to fresh investments and will not affect existing ones or those being processed now.

“The government put the national interest and the future of the nation first. (But) basic principles such as transparency and legal certainty are also important things that will affect the investment climate in Indonesia.” Trade Minister Mari Pangestu was quoted as saying by Business Times.
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