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2016 Negative List Revision Released 

by Makarim & Taira S.

Published: June, 2016

Submission: June, 2016

 



The Indonesian Government has released the long-awaited revision to the Negative List (“DNI”).  The revised regulation (Presidential Regulation No. 44/2016) was promulgated on 18 May 2016 and circulated to the public on 24 May.  The DNI regulates the sectors which are closed, open, or conditionally open to investment. The DNI revision is keenly awaited as it stipulates, amongst other matters, restrictions on foreign participation in various business activities in Indonesia.  Makarim & Taira will circulate a more comprehensive discussion of the changes in the near future, along with an English translation of the new DNI.

DNI Revisions

The Government of Indonesia has enacted a new DNI under Presidential Regulation No. 44 of 2016, which became effective on 18 May 2016 (“2016 DNI”).  The 2016 DNI revokes the previous DNI stipulated under Presidential Regulation No. 39 of 2014.  In principle, all lines of business are open to foreign investment, except for those sectors specifically mentioned in the DNI and other laws and regulations (as noted in article 3 of the 2016 DNI).  For those wishing to review the regulation itself, it is important to note that the DNI structure has changed, with the conditional restrictions being split into Attachment II (business fields reserved for micro, small and medium enterprises and cooperatives (UMKMK) and for partnership arrangements with UMKM); and Attachment III (business fields with other restrictions including those relating to ownership – i.e. foreign, domestic and Asean Economic Community owned businesses, location and special licenses).  Both these attachments need to be checked, whereas in the previous version the conditional restrictions all appeared in Attachment II.

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