Indonesia has recently eased foreign ownership rules in several sectors, with the latest additions being the retail and port services. The move was made as part of efforts to open up more opportunities for its economy.
President Joko Widodo signed revised investment regulations, which spell out which sectors are partially closed or entirely closed to foreign investors, known as ‘the negative investment list’. The revisions were made last week, with effect taking place immediately, according to a copy uploaded onto a government website.
The government announced the revision to rules on foreign ownership in February, saying it has decided to loosen restrictions on everything from food and beverage to agriculture, transportation and cinemas.
The decision came as good news to foreign companies who have expressed interest in the sectors for quite some time. Managing director of the American Chamber of Commerce, for instance, was among those who gave a positive response:
“This is the first time in many years… that Indonesia has taken steps to open up investment rather than close it,” said Mr. Lin Neumann as reported by Reuters.
However, the new regulation sets a 49 percent foreign ownership cap on small e-commerce businesses, which contradicts the government’s earlier statement that it would open the sector 100 percent to foreign investment.