To promote the local business activities Indonesian government have imposed some restrictions on the foreign investments to the country. Not all type of business sectors are open for foreign investors. On May 25, 2010, the Indonesian government issued Presidential Regulation No. 36 of 2010 on Negative Investment List (DNI), which is further amended on 23 April 2014 to Presidential Regulation No. 39 of 2014. This regulation stipulates a list of the business sectors which are either fully closed, partially opened or fully owned by the foreign investors. Fully closed sectors are those which are prohibited for Foreign Investors to conduct any investment activity, including goods/ services prohibited by Indonesian Law, dangerous, polluting, strategic for national security or heritage. Partially opened sectors are certain business fields that are open for investment for Foreign Investors under certain requirements, such as joint venture with domestic partner, certain capital ownership, certain location and special permits. Another relevant regulation pertaining to Negative Investment List is Presidential Regulation No. 76 of 2007 which explains the criteria and establishment of closed business line and open business with conditions in respect of capital investment. Some special privileges are given to the investors of ASEAN countries. Higher shareholding percentage can be provided to investors of ASEAN countries as compared to the other countries.
The negative investment list is reviewed every 3 years by BKPM (Indonesia Investment Coordinating Board). The key changes made in 2014 ammendment are as follows:
