Source of Measure:
Law No. 25 of 2007 concerning Investment;
Law No. 4 of 2009 concerning Mineral and Coal Mining;
Law No.1 of 2014 concerning Management of Coastal Areas and Small Islands;
Government Regulation No. 20 of 1994 concerning Share Ownership in Companies Set Up Under Foreign Capital Investments;
Government Regulation No. 23 of 2010 concerning the Implementation of Mineral and Coal Mining Activities j.o. Government Regulation No. 77 of 2014 concerning Third Amendment j.o. Government Regulation No. 1 of 2017 concerning Fourth Amendment;
Minister of Energy and Mineral Resources Regulation No. 9 of 2017 concerning Procedures of Divestment of Shares and Mechanism on Divestment Stock Pricing; and
Minister of Energy and Mineral Resources Regulation No. 25 of 2018 concerning Mineral and Coal Mining Business.
14. Sector: Mining & Quarrying
Sub-Sector:
Industry Classification: ISIC 1010, 1020, 1030, 1310, 1320
Level of Government: Central
Type of Obligation: National Treatment (Article 7.4)
Description of Measure:
Mining Business License Area, hereinafter referred to as WIUP, refers to an area given to the holder of a Mining Business License.
Foreign investor or legal entity organized under the laws of the other Party seeking to make investment in Indonesia is prohibited from participating in the auction of metallic mineral and coal WIUP with the size under 500 Hectares.
Source of Measure:
Law No. 4 of 2009 concerning Mineral and Coal Mining;
Government Regulation No. 23 of 2010 concerning the Implementation of Mineral and Coal Mining Activities j.o. Government Regulation No. 1 of 2017 concerning Fourth Amendment of Government Regulation No. 23 of 2010; and
Minister of Energy and Mineral Resources Regulation No. 11 of 2018 concerning the Procedure for Granting Area License, and Reporting on Mineral and Coal Mining Activities.
15. Sector: All Sectors
Sub-Sector:
Industry Classification:
Level of Government: Central
Type of Obligation: National Treatment (Article 7.4)
Description of Measure:
Non-resident taxpayers will be subject to withholding tax of 20%, if they derive the following income from an Indonesian source:
a. Interest;
b. Royalty;
c. Dividend;
d. Fee from service performed in Indonesia.
Source of Measure: Law No. 36 of 2008 concerning the Fourth Amendment to Law No. 7 of 1983 concerning Income Tax.
16. Sector: All Sectors
Sub-Sector:
Industry Classification:
Level of Governmen: Central
Type of Obligation: Performance Requirements (Article 7.8)
Description of Measure:
Obligation under Article 7.8 (Performance Requirements) shall not apply to all existing non- conforming measures, which include measures related to these requirements:
a. Local content;
b. Trade balancing;
c. Foreign exchange restrictions related to the foreign exchange inflows attributable to an enterprise;
d. Export controls; and
e. Transfer of technology.
For specific purpose, foreign investor or legal entity established as "Perseroan Terbatas" in accordance with Law No. 40 of 2007 concerning Limited Liability Company, which is employing foreign experts, are required to provide trainings and transfer of technology to workers of Indonesian citizen pursuant to the rules of law.
Source of Measure:
Law No. 25 of 2007 concerning Investment;
Law No. 40 of 2007 concerning Limited Liability Company; and
Government policy.
17. Sector: Agriculture, Manufacturing Horticulture
Sub-Sector:
Industry Classification: ISIC 0111, 0112, 0113, 0140, 1513, 1514, 1531, 1549, 2423
Level of Government: Central
Type of Obligation: National Treatment (Article 7.4) Senior Management and Board Directors (Article 7.9)
Description of Measure:
National Treatment and Senior Management and Board Directors may not apply to the establishment and operation of horticulture business activities in Indonesia, which include the following activities:
a. Germination;
b. Cultivation;
c. Harvest and postharvest;
d. Processing;
e. Distribution, trading, and marketing;
f. Research; and
g. Agro tourism.
Transition period of four years is provided for existing investors (12) in the Horticulture subsectors to make adjustment to comply with measures stated in the Law No. 13 of 2010 concerning Horticulture and its implementing regulation.
The definition of Horticulture subsectors can be found in the Law No. 13 of 2010 concerning Horticulture.
Source of Measure:
Law No. 13 of 2010 concerning Horticulture; and
Government policy.
18. Sector: Energy
Sub-Sector: Small Scale Power Plant with Renewable Energy (1 MW - 10 MW)
Industry Classification: ISIC 4010
Level of Government: Central
Type of Obligation: National Treatment (Article 7.4)
Description of Measure: Foreign equity participation in Small Scale Power Plant with Renewable Energy (1 MW-10 MW) is restricted no more than 49 percent of the capital share.
Source of Measure: Presidential Regulation of the Republic of Indonesia No. 44 of 2016 concerning Lists of Business Fields that are Closed to Investment and Business Fields that are Conditionally Open for Investment.
ANNEX I . SCHEDULE OF KOREA
1. The Schedule of Korea to this Annex sets out, pursuant to Article 7.10 (Non- Conforming Measures), Koreaâs existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 7.4 (National Treatment);
(b) Article 7.5 (Most-Favored-Nation Treatment);
(c) Article 7.8 (Performance Requirements); or
(d) Article 7.9 (Senior Management and Board of Directors).
2. Each Schedule entry sets out the following elements:
(a) Sector refers to the sector for which the entry is made;
(b) Obligations Concerned specifies the article(s) referred to in paragraph 1 that, pursuant to Article 7.10.1(a) (Non-Conforming Measures), do not apply to the non-conforming aspects of the law, regulation, or othermeasures, as set out in paragraph 3;
(c) Level of Government (1) indicates the level of government maintaining the scheduled measure(s);
(d) Measures (2) identifies the laws, regulations, or other measures for which the entry is made. A measure cited in the Measures element:
(i) means the measure as amended, continued, or renewed as of the date of entry into force of this Agreement; and
(ii) includes any subordinate measure adopted or maintained under the authority of and consistent with the measure; and
(e) Description sets out commitments, if any, for liberalization on the date ofentry into force of the Agreement, and the remaining non-conforming aspects of the measure for which the entry is made.
3. In the interpretation of a Schedule entry, all elements of the entry shall be considered. An entry shall be interpreted in light of the relevant articles of the Chapters against which the entry is made. To the extent that:
(a) the Measures element is qualified by a liberalization commitment from the Description element, the Measures element as so qualified shall prevail over all other elements; and
(b) the Measures element is not so qualified, the Measures element shall prevail over all other elements, unless any discrepancy between the Measures element and the other elements considered in their totality is so substantial and material that it would be unreasonable to conclude that the Measures element should prevail, in which case the other elements shall prevail to the extent of that discrepancy.
4, In accordance with Articles 7.10.1(a) (Non-Conforming Measures) and subject to Articles 7.10.1(c) (Non-Conforming Measures), the articles of this Agreement specified in the Obligations Concerned element of an entry do not apply to the non-conforming aspects of the law, regulation, or other measure identified in the Measures element of that entry.
5. A foreign person means a foreign national or an enterprise organized under the laws of another country.
1. Sector: Agriculture and Livestock
Obligations Concerned: National Treatment (Article 7.4)
Measures: Foreign Investment Promotion Act (Law No. 16479, August 20, 2019), Article 4
Enforcement Decree of the Foreign Investment Promotion Act (Presidential Decree No. 30170, October 29, 2019), Article 5
Regulations on Foreign Investment (Notice of the Ministry of Trade, Industry, and Energy, No.2018-137, July 6, 2018), Attached Table 2
Description: Foreign persons may not: (i) invest in an enterprise engaged in rice or barley farming; or (ii) hold 50 percent or more of the equity interest of an enterprise engaged in beef cattle farming.
2. Sector: Manufacturing of Biological Products
Obligations Concerned: Performance Requirements (Article 7.8)
Measures: Pharmaceutical Affairs Act (Law No. 16250, January 15, 2019), Article 42
Regulations on Safety of Pharmaceuticals, Etc. (Ordinance of the Prime Minister No. 1544, June 12, 2019), Article 11
Description: A person who manufactures blood products must procure raw blood materials from a blood management body in Korea.
3. Sector: Energy Industry- Electric Power Generation Other Than Nuclear Power Generation; Electric Power Transmission, Distribution and Sales
Obligations Concerned: National Treatment (Article 7.4)
Measures: Financial Investment Services and Capital Markets Act (Law No. 16191, December 31, 2018), Article 168
Enforcement Decree of Financial Investment Services and Capital Markets Act (Presidential Decree No30118, October 8, 2019), Article 187
Foreign Investment Promotion Act (Law No. 16479, August 20, 2019), Articles 4 and 5
Enforcement Decree of the Foreign Investment Promotion Act (Presidential Decree No. 30170, October 29, 2019), Article 5
Regulation on Foreign Investment (Notice of the Ministry of Trade, Industry and Energy No. 2018-137, July 6, 2018), Attached Table 1 and 2
Notice of the Ministry of Finance and Economy (No. 2000- 17, September 28, 2000)
Financial Investment Service Regulations (Notice of the Financial Services Commission No. 2019-8, March 20, 2019), Article 6-2
Description: The aggregate foreign share of KEPCOâs issued stocks may not exceed 40 percent. A foreign person may not become the largest shareholder of KEPCO.
The aggregate foreign share of power generation facilities, including cogeneration facilities of heat and power (GHP) for the district heating system (DHS), may not exceed 30 percent of the total facilities in the territory of Korea.
The aggregate foreign share of electric power transmission, distribution and sales businesses should be less than 50 percent. A foreign person may not be the largest shareholder.
4. Sector: Energy Industry - Gas Industry
Obligations Concerned: National Treatment (Article 7.4)
Measures: Act on the Improvement of Managerial Structure and Privatization of Public Enterprises (Law No. 11845, May 28, 2013), Article 19
Financial Investment Services and Capital Markets Act (Law No. 16191, December 31, 2018), Article 168
Foreign Investment Promotion Act (Law No. 16479, August 20, 2019), Articles 4 and 5
Articles of Incorporation of the Korea Gas Corporation (March 27, 2019), Article 11
Description: Foreign persons, in the aggregate, may not own more than 30 percent of the equity of KOGAS.
ANNEX II . SCHEDULE OF INDONESIA
EXPLANATORY NOTES
1. Articles 7.4 (National Treatment), 7.5 (Most-Favored-Nation Treatment), 7.8 (Performance Requirements), and 7.9 (Senior Management and Boards of Directors) apply only to the following sectors:
(a) manufacturing;
(b) agriculture;
(c) fisheries;
(d) forestry;
(e) mining and quarrying.
2. This Annex sets out, in accordance with Article 7.10 (Non-conforming Measures), the specific sectors, sub-sectors or activities, within the sectors listed inparagraph 1, for which Indonesia may maintain existing, or adopt new or more restrictive, measures that do not conform with obligations imposed by:
(a) Article 7.4 (National Treatment);
(b) Article 7.5 (Most-Favored-Nation Treatment);