Not all types of business are open for foreign investors. Foreign investors must observe Presidential Regulation No. 44/2016 on Negative List of Investment which sets the lines of business open and closed to foreign investors (Negative List of Investment/NLI). Under the NLI, foreign investors can identify business areas closed for foreign investment, business areas which can be fully owned by a foreign investor or those which require joint venture with a domestic investor. A certain privilege is given to investors from ASEAN countries where the NLI, based on ASEAN agreement, can provide a higher shareholding percentage compared to investors from other countries. The NLI will be reviewed every three years to accommodate the recent business updates.
Presidential Regulation Number 44 Year 2016 divide the sectors open to foreign investors to be as follows:
- Sector which is closed
- Sector which is open under condition, sectors reserved or partnering with Micro, Small Medium Enterprise and Cooperatives
- Sector which is open with certain condition.