In the first of ASEAN Briefing’s Indonesia’s Omnibus Law series, we analyze Presidential Regulation 10 of 2021 (PR 10/2021) on business fields open to investment — also dubbed as the positive investment list. The regulation comes into effect on March 4, 2021.

PR 10/2021 replaces Presidential Decree No.36/2010 (Indonesia’s negative investment list) and is part of the government’s ongoing economic reforms through the issuance of the Omnibus Law.

Important sectors that had previous foreign ownership restrictions, which have now been lifted include, among others:

The government has classified business fields into four categories.

To classify as a priority sector, business enterprises must meet the following criteria:

There are 245 business fields under this category that can be found under Exhibit 1 of the positive investment list. Moreover, businesses in priority sectors are eligible for a range of fiscal and non-fiscal incentives.

Fiscal incentives include a 50 percent corporate income tax reduction for investments between 100 billion rupiah (US$6.9 million) and 500 billion rupiah (US$34.9 million) for a period of five years and 100 CIT reduction for investments over 500 billion rupiah (US$34.9 million) for a period between five and 20 years.

In addition, there are tax allowances available in the form of a reduction in the taxable income of 30 percent of the total investment for six years, a special withholding tax rate on dividends of 10 percent, and tax losses carried forward for up to 10 years.

Examples of non-fiscal incentives are the provision of supporting infrastructure, simplified business licensing procedures, and the guaranteed energy supply or raw materials.

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This article was first published by AseanBriefing which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, India, and Russia. Readers may write to [email protected]

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