Investment Limitation
Selasa, 30 Juli 2024
Currently, all business fields that are commercial in nature are open for investment except for business fields that are declared closed for investment or business fields that can only be carried out by the central government which are of a service nature or in the context of defense and security which are strategic in nature and cannot be carried out or cooperated with other parties.
Open business fields shall consist of:
In principle, all business fields are open to Investment, except for business activities which are specifically regulated under Presidential Regulation Number 10 Year 2021 on Investment Business Fields and Presidential Regulation Number 49 Year 2021 on the Amendment to Presidential Regulation Number 10 Year 2021, it is mentioned that all business fields are open for investment activities except:
Business fields which are declared closed for investment
Business fields for activities which may only be undertaken by the Central Government
For business fields which are open to investment (foreign investment and domestic investment) shall consist of:
Prioritized business fields, are business fields that meet the following criteria:
National strategic programs/projects
Capital-intensive
Labor-intensive
High-tech
Industry pioneers
Export-oriented and/or
Orientation in research, development and innovation activities
Investors who invest in the list of priority business fields will be granted fiscal incentives and/or non-fiscal incentives.
Fiscal incentives that are granted by the government shall encompass: Tax incentives and customs incentives
Tax incentives in the form of:
Income tax for investment in certain business fields and/or certain regions (tax allowance)
Deductions of corporate income tax (tax holidays)
Investment allowance in the form of deduction of corporate income tax and deduction of net income for new investment or business expansion in certain business fields which are considered as labor-intensive industries, as well as gross income deduction for the organization of work practices, apprenticeships and/or learning activities in relation to the development of human resources based on certain competency.
Customs incentives in the form of:
exemption of import duty on the import of machinery as well as goods and materials for the construction or development of industries in the framework of investment facilities.
Meanwhile, for non-fiscal incentives shall cover ease of doing business, the provision of supporting infrastructure, the guarantee of the availability of raw materials, immigration shall include: recommendation to transfer the status of a visitor permit to a limited stay permit and recommendation to transfer the status of a limited stay permit to a permanent stay permit, employment and other facilities in accordance with provisions laws and regulations.
Allocated business fields or partnersips with cooperatives and UMKM, shall consist of:
Business fields allocated for cooperatives and UMKM | Business fields open to large business in partnership with cooperatives and UMKM |
Must meet the following criteria: Business activities that do not use technology or that use simple technologies Business activities that have specific processes, are labor-intensive, as well as have a special cultural heritage and are hereditary and/or The operating capital of the business does not exceed IDR10,000,000,000 (ten billion rupiahs) excluding the value of land and buildings | Must meet the following criteria: Business fields which are mostly operated by Cooperatives and UMKM and/or Business fields that are encouraged to be included in large business supply chain |
Business fields with certain requirements are business fields that can be operated by all investors, including cooperatives and UMKM which meet the following requirements:
a. Investment requirements for domestic investors. (These requirements may include requirements regarding investment values, permitted business fields for certain business entities, and business fields which require paid-up capital/certain assets).
b.Requirements for investment with restrictions on foreign capital ownership, however, this requirement does not apply to:
Approved investments in certain business fields prior to PP No. 10 Year 2021 was promulgated
Investments which acquire special rights based on an agreement between Indonesia and the country of origin of the investors, unless the provisions under PP 10/2021 are more profitable for Investments.
Restrictions on the ownership of foreign capital shall also apply to companies that receive merger, acquisition or new companies resulting from a consolidation in accordance with provisions of laws and regulations in the same business field.
c. Requirements for investment with special license
d. Other investment requirements namely business fields which are strictly limited and supervised in separate laws and regulations in the control and supervision of alcoholic beverages.
These business fields shall encompass:
Wholesale of alcoholic beverages (importer, distributor and sub distributor) (KBLI 46333)
Retail of alcoholic beverages (KBLI 47221); and
Street retail trade of alcoholic beverages (KBLI 47826)
Business fields which are eligible to be operated by all investors are business fields which are not included in numbers 1,2,3 above.
Business fields which are closed to investment
This business field is a business field that cannot be carried out by both domestic investors and foreign investors. Business fields which are closed to investment based on Law no. 11 Year 2020 on Job Creation are as follows:
a. Cultivation and industry of class I narcotics
b. Any form of gambling and/or casino
c. Catching of fish species listed under Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES);
d. Utilization or retrieval of coral and utilization or extraction of corals from nature which are used for building materials/lime/calcium, aquariums and souvenirs/jewelry, as well as live or dead corals from nature;
e. Chemical weapons manufacturing industry; dan
f. Industrial chemical substances and industrial substances which destroy the ozone layer industries.
Special Business Fields (Single Purpose dan Single Majority)
Special business fields are certain business fields which based on the regulation on said business field cannot be merged with other business fields. Several business fields which are categorized as Single Purpose are hospitals, shipping, services related to water transportation, private broadcasting institutions, subscription broadcasting institutions, transportation management services, warehousing and other storage.
Meanwhile, Single Majority is the ownership of domestic (national) capital must remain greater than the overall owner of foreign capital, for example, Single Majority business field is Air Transportation for other passengers (KBLI 51109) with foreign capital of a maximum of 49%.
Provisions for Technology-Based Start-ups
Foreign investment activities located within Special Economic Zones (KEK) which engage in technology-based pioneering businesses may undertake investments with an investment value equal to or less than IDR10,000,000,000 (ten billion rupiahs) excluding the value of land and buildings.
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