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Print articleIndonesia - Amendments to the Negative List
November, 2008 -
After the enactment last year of the Investment Law, a new "negative list" of investment fields closed or conditionally open for investments was issued by Presidential Regulation No.77 of 2007. This has been amended by Regulation No.111 of 2007. The revisions and clarifications under Regulation 111 are minor, but significant in nature and provide a regulatory framework that is far less susceptible to deviant interpretations which the government is endeavoring to avoid in order to increase capital investment.
For example, the major amendments relate to restrictions imposed on foreign capital investment in the retail sector; now this sector has restrictions on foreign investors participating in business ventures and therefore provide simultaneous protection for Indonesian retailers, such as, among other things:
- Supermarkets with a selling space area of less than 1,200m2
- Department Stores with a selling space area of less than 2,000m2
- Mini Markets with a selling space area of less than 400m2
- Non-Store Retail Sales of Agricultural Produce, e.g. rice and other crops, fruits, vegetables, etc.
- Non-Store Retail Sales of Processed Foods and Beverages, e.g. rice, bread, deep-fried, boiled or steamed cakes and the like, coffee and various sugars, etc.
- Non-Store Retail Sales of Chemicals, Pharmaceuticals, Cosmetics and Laboratory Apparatus, e.g. medicinal herbs, cosmetics, etc.
- Non-Store Retail Sale of Textiles, Clothing, Footwear and Articles of Personal Use, e.g. shoes, sandals and other footwear, etc.
- Non-Store Retail Sale of Household Goods and Kitchenware, e.g. electronic appliances, devices and equipment, plastic/melamine wares etc.
- Non-Store Retail Sale of Paper, Paper Articles, Stationery, Printed Matters, Sports Goods, Musical Instruments, Photographic Instruments, and Computers, e.g. photographic and optical devices/equipments, software printing and publication, etc.
- Non-Store Retail Sales of Handicraft, Toys, and Paintings.
- Retail Sale of Fuels and Lubricants, e.g. oil fuel, gas fuel, lubricating oils, and other fuels.
- Retail Sale of Construction Materials, e.g. cement, limestone, sand, stones and paints, etc.
- Retail Sale of Machines (except Cars and Motorcycles) and Spare Parts including Transportation Vehicles, e.g. farm machineries, sewing machines, non-engine driven land transportation vehicle and water transportation vehicles, etc.
- Retail Sale of Cars, e.g. car spare parts and accessories, etc.
The amendments other than in the retail sector are, among others:
- Rental of Farm, Construction and Civil Engineering Machineries and their equipments.
- Other Services i.e. Laundry, Haircutting and Tailoring Services and Beauty Salon.
Further amendments to the Negative List are possible. However, any future amendments will be in accordance with the national interest and the needs of the Indonesian economy.
For example, the major amendments relate to restrictions imposed on foreign capital investment in the retail sector; now this sector has restrictions on foreign investors participating in business ventures and therefore provide simultaneous protection for Indonesian retailers, such as, among other things:
- Supermarkets with a selling space area of less than 1,200m2
- Department Stores with a selling space area of less than 2,000m2
- Mini Markets with a selling space area of less than 400m2
- Non-Store Retail Sales of Agricultural Produce, e.g. rice and other crops, fruits, vegetables, etc.
- Non-Store Retail Sales of Processed Foods and Beverages, e.g. rice, bread, deep-fried, boiled or steamed cakes and the like, coffee and various sugars, etc.
- Non-Store Retail Sales of Chemicals, Pharmaceuticals, Cosmetics and Laboratory Apparatus, e.g. medicinal herbs, cosmetics, etc.
- Non-Store Retail Sale of Textiles, Clothing, Footwear and Articles of Personal Use, e.g. shoes, sandals and other footwear, etc.
- Non-Store Retail Sale of Household Goods and Kitchenware, e.g. electronic appliances, devices and equipment, plastic/melamine wares etc.
- Non-Store Retail Sale of Paper, Paper Articles, Stationery, Printed Matters, Sports Goods, Musical Instruments, Photographic Instruments, and Computers, e.g. photographic and optical devices/equipments, software printing and publication, etc.
- Non-Store Retail Sales of Handicraft, Toys, and Paintings.
- Retail Sale of Fuels and Lubricants, e.g. oil fuel, gas fuel, lubricating oils, and other fuels.
- Retail Sale of Construction Materials, e.g. cement, limestone, sand, stones and paints, etc.
- Retail Sale of Machines (except Cars and Motorcycles) and Spare Parts including Transportation Vehicles, e.g. farm machineries, sewing machines, non-engine driven land transportation vehicle and water transportation vehicles, etc.
- Retail Sale of Cars, e.g. car spare parts and accessories, etc.
The amendments other than in the retail sector are, among others:
- Rental of Farm, Construction and Civil Engineering Machineries and their equipments.
- Other Services i.e. Laundry, Haircutting and Tailoring Services and Beauty Salon.
Further amendments to the Negative List are possible. However, any future amendments will be in accordance with the national interest and the needs of the Indonesian economy.
