Indonesia poised to expand foreign investment options

In Indonesia, several sectors within tourism and the creative economy may open to foreign investors. Investment Coordinating Board (BKPM) head Franky Sibarani announced earlier this week that the government expected to finalize a new negative investment list (DNI) of between six and seven industrial sectors in the next two weeks as part of the first phase of the new DNI announcement. 

“I hope that the [DNI revision relating to] tourism and the creative economy will be announced soon,” he told the Jakarta Post. Hotel chains would be included in the revision. Sibarani estimated that the new DNI would raise foreign ownership caps to more than 50 percent, and could even go as high as 100 percent. 


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Currently, the cap on foreign ownership in tourist businesses like hotels and restaurants ranges between 49 and 51 percent. These can include two-star hotels, three-star hotels, non-star hotels, homestays and motels, with ASEAN investors allowed up to 70 percent-ownership in motels, according to the current DNI regulation — Presidential Decree No. 39/2014. 

The government has previously announced that it will announce a new DNI for the 16 industrial sectors, with a number of business sectors to be opened to foreign direct investment. 

Indonesian Hotel and Restaurant Association (PHRI) head Cyprianus advised the government to maintain ownership of local businesspeople in hotel chains. “Instead of opening up foreign ownership to 100 percent for two-or-three star hotels, I think the government needs to provide soft loans for locals who have land to develop good-quality hotels,” he said. 

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