Since Job Creation Law was effective on 2nd November 2020, the government also has to regulate the implementation regulation of Job Creation Law. Presidential Regulation No. 10 of 2021 on Investment Business Lines (â€śPR No. 10/2021â€ť) has been enacted by the government, as one of the implementing regulations of the Job Creation Law, which effective since 4 March 2021. This presidential regulation invalidates the current investment business lines and negative list under Presidential Regulation No. 76 of 2007 and Presidential Regulation No. 44 of 2016.
In line with the government’s intention to encourage more foreign investment in Indonesia, PR No. 10/2021 will contribute to create a major impact in the opening of Indonesiaâ€™s economic foreign investment. As we can see, the number of sectors subject to foreign ownership restriction appears to have been significantly reduced. Although PR No. 10/2021 has significantly liberalized foreign investment limitation for many business lines, several restrictions still remain.Â Â
The Investment Law as amended by the Job Creation Law, and the investment list under PR No. 10.2021 provide all business lines not included the list are open for any investment as mentioned in article 3 paragraph (1) item d PR No. 10/2021. To understand properly the specific business lines that are open to foreign investment or subject to certain restrictions, it must be read in conjunction with Investment Law, Job Creation Law, Indonesian Standard Business Classification code of 2020 (KBLI), and also relevant, specific sector laws and regulations.
The Changes of Investment Business Lines in General
The changes of Investment Business Lines in general are set out below:
The following business lines are closed for both foreign and domestic investors are:
(6 business lines, down from 20 previously)
Key Provisions under PR No. 10/2021
In broad terms the List of Investment Bussines Lines under PR No. 10/2021 is not an extreme departure from the previous investment regime, but there are several new provisions, including:
PR No. 10/2021 has reclassified business sectors to open investment (open sectors) into four broad categories. One of them is prioritised sectors which is a new concept. Prioritised sectors are business lines that satisfy certain criteria, as follows:
There are 245 business lines listed as prioritised sectors in schedule I of PR No. 10/2021. Business lines that satisfy those criteria above are eligible for:
Simplified business lisencing, provision of supporting infrastructure, guaranteed energy supply, guaranteed raw materials, immigration, workforce and other facilities in accordance with applicable laws and regulations.
Key Liberalized Business Lines
The following are key liberalized business lines: