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Indonesia to relax foreign investment rules for local start-ups
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Rupiah and the US dollar bills are arranged side by side in a bank. (Antara/Rosa Panggabean)
T
he government has unveiled a draft presidential regulation, derived from the recently passed Job Creation Law, that offers leeway for foreign investment in tech-based start-ups in special economic zones (SEZs).
The draft, which is available on the official website of the jobs law, stipulates that foreign investment in start-ups located in an SEZ will be exempted from the minimum requirement of more than Rp 10 billion (US$710,111) applied to other types of foreign investment. This is expected to strengthen the tech start-up ecosystem, the article reads.
The regulation will further ease the process for start-ups to hire foreign workers without being required to have a government-approved plan to use foreign employees, which is included in an article of the jobs law.
In doing so, the government seeks to promote investment in education, financial technology (fintech), software development, research and innovation start-ups, according to Yuliot, the deputy for investment climate development at the Investment Coordinating Board (BKPM).
“This will affect investors’ appetite and thus give a boost to SEZs,” Yuliot told The Jakarta Post in a phone interview on Thursday, adding that foreign start-ups thus could also invest in Indonesia.
“In many countries, they offer something special in such zones. This is what we want to apply to our SEZs.”
President Joko "Jokowi" Widodo has made repeated comments that he wants technology to play a central role in his government.
