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2016 Negative List Revision Detail 

by Makarim & Taira S.

Published: June, 2016

Submission: June, 2016


Further to our client alert of 25 May, we include here the full list of changes to the 2014 Negative List (DNI), as contained in Presidential Regulation No. 44/2016 and its attachments.  Note, again, that existing investors’ licensing will be grandfathered.  ASEAN investors have preferential arrangements in many cases.

Some changes of note: in Agriculture, the requirement to obtain a Ministry of Agriculture recommendation has been replaced in many instances with a 20% plasma plantation requirement.  In Forestry, some ecotourism services have been liberalized and, in Maritime and Fisheries, gathering coral for aquaria and salvage of artifacts have been closed.  In Energy and Mineral Resources, some geothermal participation conditions have changed as has foreign participation in testing and analysis of electrical installation, while biomass pellet manufacture has been liberalized.  Industry sees changes in crumb rubber opportunities, while Public Works sees a consolidation of construction categories and a raising of the minimum project size for foreign participation, from Rp.1bn to Rp.50bn for construction implementation services (contractor) and a minimum project limit of Rp.10bn for consultancy services. Toll road operation opens up to 100% foreign ownership.  Trade sees some degree of liberalization in the Department Store sector, for retail sales via internet for some categories of goods, for distributors, cold storage and warehousing, to mention several.  Foreigners may now participate more fully in some Tourism and Creative Economy fields, particularly cafes, restaurants and bars, which are now 100% open to foreign participation, while some lower-star hotel categories go from 51% to 67% foreign ownership limitation.  Film services gets a big boost to foreign participation.  There is some incremental liberalization in Transport and in Communications/IT, while online market place sees a new 49% foreign shareholding restriction for businesses with less than Rp. 100bn capital.  In Finance, pension fund disappears from the list.  In Manpower and Transmigration, work training goes up from 49% to 67% and the Health sector is mixed, seeing a new restriction on medical equipment distributors but liberalization in some other areas.  Full details are set out below.

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