A

number of local business players are anticipating tighter competition following the government'€™s recent decision to completely open up business sectors like restaurants, cafes and sports centers for foreign investment.

Helga Angelina, the owner of organic eatery Burgreens, said she was worried that the move would make local players less competitive as foreign investors usually had more capital.

'€œI think they [foreign investors] are capital-ready and they can raise business standards that locals find difficult to compete with,'€ she said.

While full foreign ownership was only allowed for restaurants with initial capital of more than Rp 10 billion (US$739,576), smaller restaurants would likely still be affected, she argued.

Established in late 2013 with initial capital of Rp 200 million, Burgreens currently has two outlets in the Greater Jakarta area and it faces growing competition in the restaurant business.

Indonesian Hotel and Restaurant Association (PHRI) executive director Cyprianus Aoer argued that the government should make sure that its policies did not harm local small and medium-sized enterprises (SMEs).

Separately, Wuryanti Sukamdani, who runs the hotel chain Sahid, has said foreign investment in a number of tourist businesses was the inevitable result of the implementation of the ASEAN Economic Community (AEC).

'€œI remain optimistic that our human resources in local hotels and restaurants can compete,'€ she said.

Wuryanti, who is also a member of PHRI, said that while the presence of foreign-owned restaurants and cafes would definitely make competition tougher, local players could capitalize on their uniqueness and creative innovations to keep up their competitive edge.

'€œWhat they [foreigners] excel at is standardization and packaging and we have to watch out,'€ she said.

Both Helga and Cyprianus agreed that the government should provide incentives for local players facing stiffer competition.

Helga said that microloans and mentorship programs in finance were needed for most local restaurant owners to help them run their businesses efficiently.

'€œEven in some developed nations like Australia and New Zealand, their local coffee shops outperform global ones as their governments provide incentives,'€ she said.

For one-star and two-star hotels in particular, the government could, for example, provide subsidies for businesses that have just begun to grow, Cyprianus said.

In the tenth economic stimulus package announced on Thursday, the government revised the country'€™s negative investment list (DNI), covering sectors in which restrictions on foreign investment apply.

Under the revision, restaurants, cafes, bars and sports centers are among 35 business sectors opened up completely for foreign investors.

In the previous DNI regulation, foreign ownership of bars and cafes was limited to allowed 49 percent or 51 percent under an SMEs partnership. Foreign ownership of restaurants was restricted to 51 percent.

Foreign ownership of non-star, one-star and two-star hotels, meanwhile, continue to be capped at 51 percent.

Coordinating Economic Minister Darmin Nasution said that while the government had opened up various business sectors for foreign investors, any businesses worth less than Rp 10 billion remained reserved for local SMEs.