Indonesia is one of the fastest-growing economies in Southeast Asia, attracting investors from around the world with its stable political climate, abundant natural resources, and growing consumer market. To regulate foreign investment in the country, the government has issued a Negative Investment List, which outlines the sectors closed to foreign investment and those with certain restrictions.
What is Negative Investment List?
The Negative Investment List (Daftar Negatif Investasi or DNI) is a regulation issued by the government of Indonesia to restrict foreign investment in certain sectors. The DNI is periodically updated to reflect changes in the country’s economic development and national priorities. The current version of the DNI is the Negative List BPKM 2017, which was issued by the Investment Coordinating Board (BKPM) on May 18, 2017.
What are the sectors restricted by Negative List BPKM 2017?
The Negative List BPKM 2017 restricts foreign investment in several sectors, including:
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Primary and secondary education
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Healthcare services
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Legal services
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Construction services
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Transport, including railways and toll roads
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Telecommunications, including satellite and internet services
While foreign investment is restricted in these sectors, it is still possible for foreign investors to form joint ventures with local partners or invest in other related sectors that are not restricted by the Negative List BPKM 2017.
What are the benefits and drawbacks of Negative List BPKM 2017?
The Negative List BPKM 2017 is seen as a necessary measure to protect Indonesia’s national interests and promote domestic economic growth. By restricting foreign investment in certain sectors, the government aims to promote local businesses and industries, create more job opportunities for Indonesians, and develop the country’s infrastructure and technology capabilities.
However, critics argue that the Negative List BPKM 2017 may discourage foreign investment in Indonesia, cause delays and complications in the approval process, and harm the country’s international competitiveness. They also argue that the list may contain outdated and irrelevant regulations that do not reflect the current needs and priorities of the country.
How to comply with the regulations of Negative List BPKM 2017?
If you are a foreign investor interested in doing business in Indonesia, it is important to understand the regulations outlined in the Negative List BPKM 2017 and ensure that your business activities comply with them. Some of the key steps to comply with the regulations include:
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Consult with a local legal expert to understand the regulations and requirements of foreign investment in Indonesia.
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Identify any restrictions or limitations that may apply to your business activities and ensure that you have the necessary licenses and permits.
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Explore opportunities for joint ventures with local partners or investment in other related sectors that are not restricted by the Negative List BPKM 2017.
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Be prepared for a longer and more complex approval process, and ensure that you have sufficient resources to comply with regulatory requirements and maintain good relations with local authorities.
Conclusion
The Negative List BPKM 2017 is a regulation issued by the Indonesian government to restrict foreign investment in certain sectors. While it is seen as a necessary measure to protect the country’s national interests and promote domestic economic growth, it may also have drawbacks and challenges for foreign investors. If you are interested in doing business in Indonesia, it is important to understand the regulations and requirements outlined in the Negative List BPKM 2017 and ensure that your business activities comply with them.
