Frequently Asked Questions: #businesssectors

Okusi Associates provides sector-specific market analysis for various industries in Indonesia. Our specializations include:

• Tourism and Hospitality
• Real Estate and Property Development
• Creative Industries
• Digital and IT Services
• Health and Wellness
• Education and Training
• Manufacturing
• Renewable Energy
• Agriculture and Agribusiness
• Retail and E-commerce

Our market analysis services typically cover:

• Market size and growth potential
• Competitive landscape
• Regulatory environment and compliance requirements
• Consumer behavior and trends
• Investment opportunities and challenges
• SWOT analysis
• Economic and political factors affecting the sector

We tailor our analysis to the specific needs of each client, considering factors such as:

• The client’s business model and objectives
• Target market segments
• Geographic focus (e.g., specific regions or cities in Indonesia)
• Short-term and long-term business goals

Our team of experts utilizes various research methodologies, including:

• Primary research (interviews, surveys, focus groups)
• Secondary research (industry reports, government data, academic studies)
• Data analytics and trend analysis
• Benchmarking against industry best practices

To ensure the most accurate and up-to-date information, we:

• Regularly update our knowledge base on sector-specific regulations
• Maintain relationships with industry experts and government officials
• Monitor changes in the Negative Investment List (DNI) that may affect foreign investment in specific sectors

For detailed information on our market analysis services, including pricing and turnaround times, please refer to the Okusi Associates website or contact our office directly.

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The Negative Investment List (DNI) is a crucial regulation in Indonesia that affects foreign investment in the following ways:

• Definition: The DNI is a list of business sectors that are either closed or have restrictions for foreign investment in Indonesia.

• Purpose: It aims to regulate and control foreign investment to protect certain sectors of the Indonesian economy and promote local business development.

• Impact on foreign investors:

  • Determines which business sectors are open, partially open, or closed to foreign investment
  • Specifies maximum foreign ownership percentages for partially open sectors
  • May require partnerships with local Indonesian companies in some sectors

• Key considerations:

  • The list is periodically updated by the Indonesian government
  • Some sectors may require a minimum investment amount for foreign participation
  • Certain sectors may have additional licensing or operational requirements

• Examples of restrictions:

  • Some sectors may be completely closed to foreign investment
  • Others may allow only partial foreign ownership (e.g., 49% or 67%)
  • Some businesses may require local partners or shareholders

• Importance for PMA companies:

  • Foreign investors must consult the DNI before planning their investment in Indonesia
  • It helps determine the feasibility and structure of a proposed PMA company
  • Compliance with DNI regulations is essential for obtaining necessary permits and licenses

• Seeking professional advice:

  • Due to the complexity and frequent updates of the DNI, it’s advisable to consult with experts like Okusi Associates for the most current information and guidance on how the DNI affects specific investment plans.

By understanding and adhering to the DNI, foreign investors can ensure their PMA company plans align with Indonesian regulations and avoid potential legal issues or investment restrictions.

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Yes, specific licenses and permits are often required for certain business activities in Indonesia. The requirements can vary depending on the nature of the business. Here are some key points to consider:

• Basic Licenses: All companies, regardless of their business activity, need to obtain:

  • Domicile Certificate
  • Tax Identification Number (NPWP)
  • Company Registration (TDP)

• Sector-Specific Licenses: Depending on the industry, additional licenses may be required:

  • Trading companies may need an import license
  • Manufacturing companies often require industrial business licenses
  • Construction companies need construction services business licenses
  • Hotels and restaurants require tourism business licenses
  • Financial services companies need approval from the Financial Services Authority (OJK)

• Environmental Permits: Businesses that may have an environmental impact often need to obtain environmental permits or conduct environmental impact assessments (AMDAL).

• Location-Based Permits: Some regions or special economic zones may have additional licensing requirements.

• Professional Licenses: Certain professions (e.g., lawyers, doctors, architects) may need individual professional licenses in addition to company licenses.

• Online Business Permits: E-commerce businesses may require specific permits related to online transactions and data protection.

• Foreign Investment Considerations: PMA companies may face additional licensing requirements or restrictions based on the Negative Investment List (DNI).

It’s important to note that licensing requirements can change, and it’s advisable to consult with a professional service provider or relevant government agencies to ensure compliance with the most up-to-date regulations for your specific business activity.

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The Negative Investment List (Daftar Negatif Investasi or DNI) is a key regulation in Indonesia’s foreign direct investment (FDI) regime that outlines restrictions on foreign investment in various business sectors. Here are the key points about the DNI and its effects on foreign investment:

• Purpose: The DNI specifies which business fields are:

  • Closed to foreign investment
  • Restricted to investment (e.g. reserved for Indonesian SMEs or state-owned companies)
  • Open to foreign investment but with certain conditions or ownership limitations

• Structure: The list categorizes business fields under government classifications and determines:

  • Sectors where foreign investors can have 100% ownership
  • Sectors requiring partnerships with Indonesian businesses
  • Specific regulations that apply to certain sectors

• Updates: The DNI is typically updated every two years to reflect changes in investment policies.

• Scope: The current DNI contains 280 business fields. Sectors not listed are supposed to be open to 100% foreign ownership.

• Effects on foreign investment:

  • Determines maximum foreign ownership percentages for different sectors
  • Requires foreign investors to partner with local companies in some fields
  • Sets compliance requirements with local regulations for certain sectors
  • Creates some uncertainty due to potential for wide interpretation

• Minimum investment: While not directly part of the DNI, there is a nominal minimum investment of USD 300,000 for foreign-owned companies.

• Location: Foreign investment companies generally have freedom to choose their location in Indonesia.

The DNI plays a crucial role in shaping foreign investment in Indonesia by defining the sectors and conditions under which foreign companies can operate. It’s important for foreign investors to carefully review the latest DNI and consult with experts to understand how it applies to their specific business plans in Indonesia.

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