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The government revised its so-called negative investment list
-- a list of business sectors, wholly or partly closed to investment --
last week, aiming to clarify rules and fair treatment within the
business community.
A copy of the list obtained by The Jakarta Post on Thursday, basically
separates business sectors closed to both local and foreign investment,
and those open to investment with certain conditions.
On the closed side, the government scrapped two of 25 sectors; the
installation and maintenance of roads, and non-ferrous metals industry
or lead.
The remaining 23 were left intact, which included gambling, public
broadcasting services, motor vehicle test operators and air traffic
service providers.
As for the list of business sectors open to investment with conditions,
the government has shown its stance in protecting small businesses by
making no changes within the sub-sector reserved for small and medium
enterprise businesses.
In response to a request from business operators grouped under the
Indonesian Chamber of Commerce and Industry (Kadin), the government
made considerable revisions to sub-sectors including capital
ownerships, allowed business locations and list businesses reserved for
100 percent domestic ownership.
In capital ownership, the government scrapped 15 out of 17 businesses
in the arts and culture sector, leaving only art galleries and art
performance venues, where a minimum of 50 percent domestic ownership
was still required.
In the capital ownerships category, the government also scrapped in the
list business and management consultation services, in which foreign
investment was previously limited to 49 percent -- now completely open,
but lowered foreign ownership in crossing transport services from 60
percent to 49 percent.
With the change, foreign ownership is now limited to 49 percent in 29
lines of businesses within the transportation sectors named in the
list, but this will be subjected to further revisions as soon as the
House of Representatives passes its transportation bill, which promises
more liberalization in the sector, at some stage in 2008.
A massive change appeared in the permitted business locations category,
which previously regulated the locations of 19 lines of businesses; now
there is only one -- breeding and farming pigs, which must heed
regional regulations.
The previous 19 businesses included hotels, caterers, spas, game
makers, karaoke establishments, restaurants, nursing services and
travel bureaus.
Finally, in the list of industries for domestic investment only
category, the number of items stays roughly the same, except in the
retail sector, which stipulates 100 percent domestic ownership for
supermarkets on less than 1,200 square meters of land, department
stores on less than 2,000 square meters, community and convenience
stores, 200 square meters.
There has been no formal response as yet from Kadin, which said it had
not receive the revised list yet.
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