Is the Property Sector in Indonesia Open to Foreign Investment?

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Understanding 5 Steps Foreign Direct Investment In Indonesia", "Latest Negative List of Investments In Indonesia", you may read also "How To Buy Land In Indonesia?" and on this occasion we will discuss about 'Is the Property Sector in Indonesia Open to Foreign Investment?'.

The www.hukumindo.com platform has discussed in several of its articles the legal aspects of investing in Indonesia for foreign nationals. In some cases, there are still questions from some investors regarding which sectors can be entered for investment. This is reasonable because all countries have policies in opening or closing several sectors of their country to foreign investment. On this occasion it will be specific to the property sector, the question then is: Is the property sector open to foreign investment?

Recent Negative List of Investment

In the article entitled: "Latest Negative List of Investments In Indonesia", the following is Closed Business Fields according to Presidential Regulation Of The Republic Of Indonesia Number: 49 Year 2021 Concerning Amendment To Presidential Regulation Number: 10 Year 2021 Concerning Investment Business Sector:[1]

• Narcotics;
• Any form of gambling and/or casino;
• (Convention on International Trade in Endangered Species of Wild Fauna and Flora) CITES-listed fishing;
• Utilization or collection of coral/coral;
• Chemical weapons manufacturing industry; and
• Chemical industry and the ozone layer depleting industry, (6 business fields, previously 20 business fields).
• The liquor industry containing alcohol such as wine and the beverage industry containing malt are also included in the business sector that is closed in nature.
• Manufacture of traditional medicinal products.
• Manufacture of raw materials for traditional medicines for humans.
• Manufacture of building goods from wood.
• Coffee processing industry that has obtained geographical indications.
• Rendang Industry.
• Ship Industry (phinisi, outrigger, and wooden boats with traditional designs).
• Non-furniture wood carving handicraft industry, wood carving, reliefs, masks, statues and puppets.
• Traditional cosmetic industry.
• Batik Industry (Written Batik, stamp, and combination).
• Industry of crackers, chips, dents, and the like.
• Art Gallery.
• Wooden building goods industry.

Property Sector and Negative List of Investment

As stipulated in Presidential Regulation Of The Republic Of Indonesia Number: 49 Year 2021 Concerning Amendment To Presidential Regulation Number: 10 Year 2021 Concerning Investment Business Sector above, property sector is not in the negative list. So, the answer of the question of: is the property sector open to foreign investment? Is YES. Property sector is open to foreign investment in Indonesia.

In addition, there are several reasons that make the property sector open to foreign investment, one of which is because the need for property products in Indonesia is still quite large. Citing one source in Indonesian online media, the number of housing backlogs in Indonesia is estimated at 13 million. This means that this sector still has opportunities and markets that can be explored and developed.[2] In another words, to meet the needs of a large market, foreign investors are still needed to work on the sector. This huge demand cannot be met by only domestic investment. And if you have any legal issue with this topic, contact us then, feel free in 24 hour, we will be happy to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Latest Negative List of Investments In Indonesia", www.hukumindo.com., Diakses pada tanggal 20 Agustus 2022, https://www.hukumindo.com/2021/08/latest-negative-list-of-investments-in.html

2. "Investor Asing Semakin Serius Merambah Bisnis Properti di Indonesia", kontan.co.id., Diakses pada tanggal 20 Agustus 2022, https://industri.kontan.co.id/news/investor-asing-semakin-serius-merambah-bisnis-properti-di-indoensia