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Jobs law liberalizes more industries for investors
The law states that all business sectors are open to foreign direct investment (FDI) as well as domestic direct investment (DDI), with the exception of six prohibited sectors and businesses that can be carried out by the government.
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The office of the Investment Coordinating Board (BKPM) in Jakarta. (kontan.co.id/Achmad Fauzi)
I
ndonesia is opening up almost all its business sectors to foreign investors in the recently passed Job Creation Law to attract more investment into the country, which is struggling to recover from a COVID-19-induced economic downturn.
The law states that all business sectors are open to foreign direct investment (FDI) as well as domestic direct investment (DDI), with the exception of six prohibited sectors and businesses that can be carried out by the government.
The six prohibited sectors narcotics, gambling, chemical weapons, ozone-depleting substances, coral extraction and fishing activities for endangered species based on the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). It states that further rules will be detailed in a government regulation (PP).
The current negative investment list (DNI), which is a derivative regulation from the 2007 Investment Law, regulates business sectors that are open, prohibited or open with certain conditions to foreign investment.
“The point is to create investment opportunities for added value [industries] in the country,” Investment Coordinating Board (BKPM) deputy head Yuliot told The Jakarta Post on Nov. 2.
The government previously floated the idea of scrapping the DNI and replacing it with a “positive investment list” that outlines available sectors as it liberalizes investment. This is part of the government’s concerted efforts to attract more investment into the country.
To that end, the omnibus law also promises less red tape, fewer land overlaps, looser labor laws and looser environmental safeguards.
