- collecting forests plants: rattan (ISIC 2010), pine sap (oleo pine resin) (ISIC 0200), bamboo (ISIC 0200), wood rosin or shorea javanica (damar) (ISIC 0200), eaglewood or aquilaria malaccensis (gaharu), cajuput/eucalyptus leaves (ISIC 0200)
- collecting silkworm cocoon (natural silk farming) (ISIC 0122)
(b) 100 per cent domestic equity participation:
- water provisioning in conservation area (ISIC 0200)
- water energy provisioning in conservation area (ISIC 0200)
- capturing and trading of wild plants and wild animal from the natural wildlife habitat (ISIC 0150)
Source of Measure :
- Law No. 41 of 1999 concerning Forestry as amended by Law No. 79 of 2004 and further amended by Law No. 6 of 2023 concerning Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law
- Law No. 5 of 1990 concerning Conservation of Natural Resources and lis Ecosystems
- Government Regulation No. 5 of 2021 conceming implementation of Risk-Based Business Licensing
- Government Regulation No. 23 of 2021 conceming Forestry Management
- Government Regulation No. 36 of 2010 concerning Natural Tourism Concession in the National Park Utilization Zone, Grand Forest Park, Nature Tourism Park
- Government Regulation No. 8 of 1999 concerning Utilization of Plant and Wild Animal Species
- Presidential Regulation No. 10 of 2021 concerning Investment Business Fields as amended by Presidential Regulation No. 49 of 2021
- Government Policy
12. Sector: All sectors
Subsector:
Industry Classification: -
Level of Government: Central
Obligations Concerned: National Treatment
Description :
(a) As may be required by the relevant regulatory authorities, a company in which foreign investors (9) own 100 per cent equity participation, subject to prior notification before the grant of the license, after certain period since commencement of commercial production, the said foreign investors should sell a part of the company's share to domestic investors (10).
(b) In the case of Mineral and Coal Mining subsector (11), a mining business licence (izin Usaha Pertambangan) for foreign investment (12) shall be granted by the Minister of Investment and verified by the Ministry of Energy and Mineral Resources of the Republic of Indonesia.
Subject to prior notification before the grant of mining business licence (Uzin Usaha Pertambangan), 10 years after the commencement of production, foreign shareholders (13) of foreign investment should sell their shares gradually to Indonesian shareholders (14) according to the following priorities central government, local government, state-owned enterprises (Badan Usaha Milik Negara), regional- owned enterprises (Badan Usaha Milik Daerah) and/or national private business entity.
The shares of the said Indonesian shareholders shall reach majority after 15 years after the commencement of production.
Source of Measure :
- Law No. 25 of 2007 concerning Investment as amended by Law No. 6 of 2023 concerning Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law
- Law No. 4 of 2009 concerning Mineral and Coal Mining as amended by Law No. 3 of 2020 and Law No. 6 of 2023 conceming Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 Concerning Job Creation into Law
- Law No. 1 of 2014 concerning Management of Coastal Areas and Small Islands as amended by Law No. 6 of 2023 conceming Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law
- Government Regulation No. 20 of 1994 conceming Share Ownership in a Company Established as a Foreign Invesiment as amended by Government Regulation No. 83 of 2001
- Government Regulation No. 96 of 2021 concerning the Implementation of Mineral and Coal Mining Activities
- Indonesia Investment Coordinating Board (BKPM) Regulation No. 4 of 2021 concerning Guidelines and Procedures on Risk-Based Business Licensing and Investment Incentives
- Minister of Energy and Mineral Resources Regulation No. 9 of 2017 concerning Procedures of Divestment of Shares and Mechanism on Divestment Stock Pricing on Mineral and Coal Mining Sector as amended by Minister of Energy and Mineral Resources Regulation No. 43 of 2018
- Minister of Energy and Mineral Resources Regulation No. 25 of 2018 concerning Mineral and Coal Mining Business as amended several times lastly with Minister of Energy and Mineral Resources Regulation No. 17 of 2020
13. Sector: Mining and Quarrying
Subsector:
Industry Classification: ISIC 1010, 1020, 1030, 1310, 1320
Level of Government: Central
Obligations Concerned: National Treatment
Description:
Mining Business License Area (hereinafter referred to as "WIUP"), refers to an area given to the holder of a Mining Business License.
Foreign investors or juridical person of another Party seeking to make an investment in Indonesia are prohibited from participating in the auction of metallic mineral and coal WIUP with the size of equal or under 500 hectares
Source of Measure
- Law No. 4 of 2009 concerning Mineral and Coal Mining as amended by Law No. 3 of 2020 and Law No. 6 of 2023 conceming Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law
- Government Regulation No. 96 of 2021 concerning the Implementation of Mineral and Coal Mining Activities
- Minister of Energy and Mineral Resources Regulation No. 7 of 2020 concerning the Procedure for Granting Area, License, and Reporting on Mineral and Coal Mining Activities as amended by Minister of Energy and Mineral Resources Regulation No. 16 of 2021
14. Sector: All sectors
Subsector:
Industry Classification:
Level of Government: Central
Obligations Concerned: National Treatment
Description:
Non-resident taxpayers will be subject to withholding tax of 20 per cent, if they derive the following income from an Indonesian source, which include:
(a) Interest;
(b) Royalty;
(c) Dividend; or
(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 Taxes amended by Law No. 7 of 2027 concerning Harmonization of Tax Regulations
15. Sector: All sectors
Subsector:
Industry Classification:
Level of Government: Central
Obligations Concerned: Prohibition of Performance Requirements
Description:
Obligation under Article 6 (Prohibition of Performance Requirements) shall not apply to all existing non-conforming measures, which include measures related to these requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with investments of that investor;
(c) to restrict sales of goods in its territory that such investment produces by relating such sales to the volume or value of its exports or foreign exchange earnings:
(d) to export a given level or percentage of goods;
(e) to transfer a particular technology, a production process, or other proprietary knowledge to a person in its territory.
For specific purpose, a foreign investor or a legal entity established as Indonesian Limited Liability Company (Perseroan Terbatas) in accordance with Law No. 40 of 2007 concerning Limited Liability Company as amended by Law No. 6 of 2023 concerning Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law, which are employing foreign experts are required to provide trainings and transfer of technology to workers of Indonesian nationals pursuant to the laws and regulations.
Source of Measure:
- Law No. 25 of 2007 concerning Investment as amended by Law No. 6 of 2023 conceming Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law
- Law No. 40 of 2007 concerning Limited Liability Company as amended by Law No. 6 of 2023 concerning Siipulation of Government Regulation in Lieu of Law No. 2 of 2022 concerning Job Creation into Law
- Government Policy
LIST B. EXPLANATORY NOTES
1. This List B sets out, pursuant to Article 13 (Reservations and Non-Conforming Measures) of Chapter 11 (Investment), Indonesia's existing measures that are not subject to some or all of the obligations imposed by:
(a) Article 3 (National Treatment) of Chapter 11 (Investment);
(b) Article 4 (Most-Favoured-Nation Treatment) of Chapter 11 (Investment);
(c) Article 5 (Senior Management and Board of Directors) of Chapter 11 (Investment); or
(d) Article 6 (Prohibition of Performance Requirements) of Chapter 11 (Investment).
2. List A and this List B pursuant to Article 13 (Reservations and Non-Conforming Measures) of Chapter 11 (Investment) follow the negative list with two list approach as follows:
(a) List A sets out commitments in relation to existing non-conforming measures which are subject to standstill obligations but not subject to ratchet mechanism; and
(b) this List B sets out policy flexibility in relation to measures in sectors, subsectors and activities.
3. Each reservation shall set out the following elements, where applicable:
(a) Sector refers to the sector for which the entry is made;
(b) Subsector refers to specific industries, products, and activities in which a reservation is taken;
(c) Industry Classification where referenced, refers to the activity covered by the entry, according to the CPC, ISIC Rev. 3, or as expressly otherwise described in that entry:
ISIC Rev. 3 means the International Standard Industrial Classification of All Economic Activities as set out in the Statistical Papers, Series M, No.4, ISIC Rev. 3, Statistical Office of the United Nations, New York, 1990;
CPC means the Provisional Central Product Classification as set out in the Statistical Papers, Series M, No. 77, Department of International Economic and Social Affairs, Statistical Office of the United Nations, New York, 1991.
(d) Level of Government indicates the level of government maintaining the listed measures;
(e) Obligations Concemed refers to the obligations of Articles 3 (National Treatment), 4 (Most-Favoured-Nation Treatment), 5 (Senior Management and Board of Directors), and 6 (Prohibition of Performance Requirements), as the case may be, which do not apply to the listed measures;
(f) Description sets out the non-conforming measure for which the entry is made; and
(g) Existing Measure refers to existing measures that apply to the sector, subsector or activities covered by the reservations and is identified for transparency purposes only.
4. In accordance with Article 13 (Reservations and Non-Conforming Measures), the Articles of this Agreement specified in the Obligations Concerned element of an entry do not apply to the non-conforming measure identified in the Description element of that entry.
5. In the interpretation of a reservation, all elements of a reservation shall be considered. The Description element shall prevail over all other elements.
6. The Schedules of other Parties shall not be used to interpret Indonesiaâs obligations under Chapter 11 (Investment)
7. This note shall form part of Indonesia's reservations.
1. Sector: All sectors
Subsector: Customary Rights on Land and Properties
Industry Classification:
Level of Government: Central and Regional
Obligations Concerned: National Treatment
Description:
Indonesia reserves the right to adopt or maintain any measure related to customary rights of land and properties of minorities tribal groups.
Existing Measures
- Article 33 of the 1945 Constitution of The Republic of indonesia
- Government Policy
2. Sector: Manufacturing
Subsector:
Industry Classification: ISIC (see below)
Level of Government: Central
Obligations Concerned: National Treatment
Description:
Indonesia reserves the right to adopt or maintain measures for the establishment and operation of foreign investment in the following subsectors:
a. Limitation on Foreign Equity Participation:
- industry of main equipment for defence and security (ISIC 2520, 2893, 2927, 2929, 3530). In the event of a strategic interest, foreign equity ownership may exceed the limitation with the approval of the Minister of Defence
b. Partnership:
- manufacture of copra (ISIC 1514)
- sweetening and saline fruits and vegetable industry (ISIC 1513)
- manufacture of soy sauce (ISIC 1549) manufacture of foods from soybeans and beans other than soy sauce, tempeh, and tofu (ISIC 1513, 1514, 1531, 1549)
- milk powder and condensed milk processing and industry (ISIC 1520)
- rattan processing industry (ISIC 2010)
- preserving industry of rattan, bamboo, and the likes (ISIC 2010)
- coconut industry: coconut charcoal/briquettes industry; coconut coir fibre industry (ISIC 2411, 3699)
- essential oil industry (ISIC 2429)
- bricks and clay or ceramic industry (ISIC 2691, 2692, 2693)
- other goods made from clay or ceramic industry (ISIC 2691, ISIC 2693)
- lime industry (ISIC 2694)
- goods made from cement industry (ISIC 2695)
- good made from lime industry (ISIC 2695)
- other goods made from cement and lime industry (ISIC 2695)
- nails, nuts and bolts industry; component and spare parts industry for engine and turbine; other pumps, compressors, taps, and valves industry; component and accessories for two and three wheels motor vehicles industry (ISIC 2899, 2911, 2912, 3591, 3592)
- spare parts accessories for motor vehicles with four or more wheels (ISIC 3430)
- manufacture of devices and fittings of wooden ships for marine tourism and fishing (ISIC 3511)
- manufacture of jewellery products from precious metal for personal use (ISIC 3330, 3691)