A number of sectors within tourism and the creative economy are to open up to foreign investors, signaling the government’s renewed commitment to welcoming overseas investment, a top official has said.
Investment Coordinating Board (BKPM) head Franky Sibarani revealed on Wednesday 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. Among businesses in the [creative economy] sector are film distribution, film production houses and cinema operators. In the tourism sector are hotel chains, tourist attractions and cruises,” he said.
Franky told reporters that the new DNI would raise foreign ownership caps in the two industries to more than 50 percent or up to 100 percent.
At present, foreign direct investment is allowed to account for a maximum 49 percent stake in companies providing technical assistance in movie-related production, including film production, production houses, film distribution and movie promotion.
However, foreign investors can still buy shares in cinema operators listed on the stock exchange, according to capital market regulations. Publicly listed Graha Layar Prima, known for its Blitzmegaplex cinema chain, is partly owned by a South Korean company.
Meanwhile, the cap on foreign ownership in tourist businesses like hotels and restaurants currently ranges between 49 and 51 percent.
Accommodation services with foreign ownership currently limited to 49 or 51 percent are 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.
Alongside tourism and the creative economy, another 15 industrial sectors are also “open with requirements” to foreign investment at present. Among the sectors are agriculture, forestry, maritime affairs and fisheries, public works and commerce.
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.
Separately, 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.
Voicing similar concerns, Indonesian Consumers Foundation (YLKI) chairman Tulus Abadi said that while the rising cap on foreign ownership in cinemas and accommodation services would give consumers more options, he argued that local ownership should still be maintained.
He added that many joint ventures in tourism and the creative economy formed by local and foreign investors already met most consumers’ demands.
In contrast, the Creative Economy Agency (Bekraf) has previously stated that the country needed more foreign direct investment in cinemas, as there was still a wide gap between the number of cinemas and the number of viewers.