This week, Indonesia published its highly anticipated new
foreign investment regulations1 (the
"New Regulations"). The New
Regulations amend Indonesia's list of sectors totally or
partially closed to foreign investment (the
"Negative List") and clarify
the application of foreign ownership rules to listed companies and
companies undergoing mergers and acquisitions.
The New Regulations generally set forth incremental policy changes
rather than wholesale revisions to the foreign investment
framework. The progressive opening up of Indonesian industry to
foreign investment is welcome, as is the additional clarity on the
treatment of public companies. However, the New Regulations stop
short of establishing a single framework for foreign investment,
and there remain potential areas of conflict between foreign
ownership restrictions under the 2007 Foreign Investment Law and
the New Regulations and foreign ownership restrictions under other
laws and regulations.
