Indonesia FDI clarification to restrict listco investment

Author: Ashley Lee | Published: 31 Jul 2013
  • A recent announcement by Indonesia’s foreign investment regulator may affect a wide range of foreign investments into listcos;
  • It was previously assumed that foreign investment into public companies was exempt from foreign investment regulations;
  • The new regulation requires foreign-controlled companies, and their subsidiaries, to register as foreign companies;
  • This may cause issues for subsidiaries that operate in sectors restricted to foreign investment.

A recent announcement by Indonesia’s foreign investment regulator clarified new limits on foreign investment in listcos. But it may adversely affect foreign investors who had long believed the regulations did not apply.

The Indonesian Capital Investment Coordinating Board’s (BKPM) regulation No 5/2013 (Regulation 5), issued on May 29, clarified the status of public companies controlled by foreign investors. But it will affect investments in listcos designed...