One of the critical aspects that foreign investors need to understand when considering investments in Indonesia is the Negative Investment List, commonly referred to as DNI (Daftar Negatif Investasi). This list plays a pivotal role in determining which industries and sectors are open for foreign investment and to what extent.
In this article, we will delve into the intricacies of the Negative Investment List in Indonesia, shedding light on its significance and implications for investors.
Also read: Investing in Indonesia: Great Opportunity for Global Investors
What is Negative Investment List (DNI) in Indonesia?
Daftar Negatif Investasi (DNI) or the Negative Investment List in Indonesia is a list of business sectors in which foreign investment is either prohibited, permitted, or conditionally permitted. The most recent DNI was authorized via Presidential Regulation No. 49 of 2021, which modifies Presidential Regulation No. 10 of 2021.
The DNI is divided into four categories:
Priority sectors
Many sectors are open to 100% foreign investment, with several fiscal and non-fiscal incentives available (depending on the business line).
Business fields with specific requirements
These sectors are open to foreign investment, but subject to certain requirements, such as minimum investment thresholds, local content requirements, or partnerships with Indonesian companies.
Business fields open to large enterprises with compulsory partnerships
These sectors are open to foreign investment, but only in the form of joint ventures with Indonesian companies.
Business fields closed to investment
These sectors are closed to both domestic and foreign investment.
Also read: What to Invest in Indonesia: 7 Best Sectors for Foreigner
Business Sectors Closed to Foreign Investment in Indonesia (2023)
The following is a list of business sectors that are closed to foreign investment in Indonesia in 2023:
- Narcotics
- Psychotropics
- Precursors and hazardous chemicals
- Gambling
- Pornography
- Weapons and ammunition
- Explosives
- Nuclear energy
- Certain defense industries
- Certain types of mining
Includes the mining of gold, silver, copper, nickel, and bauxite. - Certain types of forestry
Includes the logging of natural forests and the cultivation of certain types of trees, such as teak and sandalwood. - Certain types of fishing
Includes the fishing of certain types of fish, such as tuna and lobster. - Certain types of agriculture
Includes the cultivation of certain types of crops, such as rice, corn, and soybeans. (read: Top 10 Agriculture Companies in Indonesia) - Certain types of transportation
Includes the operation of certain types of transportation services, such as taxis, buses, and shipping lines. - Certain types of telecommunications
Includes the operation of certain types of telecommunications networks, such as cellular networks and fixed-line networks. - Certain types of media and publishing
Includes the publication of certain types of media, such as newspapers and magazines. - Certain types of financial services
Includes the operation of certain types of financial institutions, such as banks and insurance companies. - Certain types of professional services
Includes the provision of certain types of professional services, such as law and accounting.
Also read: Where to Invest in Indonesia: 7 Best Cities and Locations
It is important to note that the DNI is subject to change at any time. The Indonesian government has announced plans to further liberalize the DNI in the future, but it is not clear when these changes will take effect.
Foreign investors keen on investing in Indonesia should engage with the Indonesia Investment Coordinating Board (BKPM) or qualified investment advisors to confirm whether a particular business sector is open to foreign investment and to learn about any specific requirements that may apply.
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