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21 January 2020

Indonesia plans to amend 79 laws to spur foreign investment

The bill will revise nine laws that cover the ease of doing business in the country and eliminate costs associated with setting up a business and relax working visa rules for certain sectors

The vast majority of amendments to laws and articles are meant to simplify the business licencing process/Bloomberg

by Bloomberg

Indonesia is set to overhaul its nearly two-decade-old labour law and scrap an array of rules that hinder foreign investment as President Joko Widodo seeks to transform the economy from a commodity reliant one into a manufacturing hub.

The government plans to table a bill in parliament that will revise 79 separate existing laws and 1,244 clauses. The omnibus law on job creation will reform Indonesia’s labour legislation, making it easier for companies to secure permits and relax foreign ownership rules, local content requirements and land procurement.

President Widodo has put the omnibus bill at the top of his second-term agenda as he looks to stoke economic growth that is been hovering around the five per cent mark since he won the presidency in 2014.

The vast majority of amendments to laws and articles are meant to simplify the business licencing process, while others are targeted at investment requirements, employment, protection of minimum wages, land procurement and economic zones among others.

Similarly, Indonesia plans to create incentives for downstream mining activities, with some coal miners exempt from royalties and obligations to supply to the domestic market and to be given permits that last the life of the mine.

A long-awaited overhaul of the so-called negative investment list, which restricts foreign ownership in a range of industries, will be included in the job creation bill. The government will establish a priority list for investment that includes high-tech, digital and labour-intensive sectors

The government is yet to release sectoral details on local content requirements and foreign ownership levels.


RELATED STORIES: Indonesia foreign investment





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