Indonesia Issues Implementing Rules of Investment Law Reform

1 / 2

Indonesia Issues Implementing Rules of Investment Law Reform

  • Oops!
    Something went wrong.
    Please try again later.
Yudith Ho
  • Oops!
    Something went wrong.
    Please try again later.

(Bloomberg) -- Indonesia has released the specifics of its investment law overhaul, with changes that include lower taxes on bond earnings and new permit requirements for plantations.

The 51 implementing rules, including two that were issued in 2020, cover land management, foreign worker regulations and a new framework for deciding which sectors are open or closed to overseas investors. The omnibus law passed last year is meant to spur investments and create jobs, part of a major push by President Joko Widodo to bring the pandemic-hit economy out of its first recession since the Asian financial crisis.

Key Points

Non-resident taxpayers are now subject to 10% tax rate on earnings from debt securities, instead of 20%, or another level aligned with treaties to avoid double taxation. The change is valid six months from the rule’s issuance.Palm oil plantations in areas designated as forests must get a state permit within three years or face administrative sanction. The plantations must have been started and operated in line with previous regulations.Business permits are simplified, with those deemed as low-risk only needing an identity number to operate, while high-risk ones must get a full license. The rule refers to risk as possible impact to health, safety and the environment.Companies don’t need to apply for a new permit when hiring foreign workers already holding a valid visa from another company, as long as the employee works as a director, commissioner, or in roles linked to vocational training, digital economy or oil and gas.

References

Indonesia to Cut Foreign Ownership Curbs to Add Jobs, Lure FundsHere’s What to Know on Indonesia’s Investment Law Overhaul Jokowi’s Jobs Law Faces Legal Review as Unions Continue Protest

(Adds number of total implementing regulations in second paragraph.)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Recommended Stories

  • Billionaire Sawiris Said to Back $4.7 Billion Signature Takeover

    (Bloomberg) -- Egyptian billionaire Nassef Sawiris plans to accept a sweetened $4.7 billion takeover offer for private-jet company Signature Aviation Plc, according to people familiar with the discussions.NNS, the investment vehicle of Sawiris, is set to sell its 7.42% stake to a bidding consortium led by Blackstone Group Inc. and Global Infrastructure Partners, said the people, asking not to be identified because discussions are private. Sawiris, the third-biggest shareholder in Signature Aviation, could announce his backing this coming week, they said.The move would help end a months-long takeover battle for the world’s biggest operator of private-jet bases. Rival bidders GIP and Blackstone earlier this month teamed up and increased their takeover bid to $5.62-per-share. That bump won the backing of Signature’s management.Then Carlyle Group Inc., which had been considering a counter bid, announced last week that it won’t make an offer, opting instead to acquire a unit of Signature. With the nod from Sawiris, the latest GIP and Blackstone bid, which has the backing of billionaire Bill Gates, the largest shareholder, is likely to succeed.Representatives for Signature, NNS and Blackstone declined to comment.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • $15,000 Invested in This ETF Could Send Your Kids to College

    Target may be the conventional place to register for baby shower gifts, but savvy parents will request college fund donations instead. Investing in an ETF in your kid's earliest days is a simple way to minimize out-of-pocket tuition costs. The longer you keep your money invested, the more you benefit from compounding earnings -- that's when your earnings start earning money too.

  • Alibaba, Pinduoduo Fight Against China’s Looming Food Crisis

    (Bloomberg) -- The battle to supply 1.4 billion people with fresh fruit and vegetables is taking China’s e-commerce companies into the country’s hinterlands, where they are attempting to revolutionize centuries-old agricultural practices to secure future supply for their burgeoning online grocery businesses.Xi Jinping’s government has long made self-sufficiency in food a “top state issue” as it seeks to avert a looming food crisis. The need to modernize China’s 200 million largely small-scale farms took on added urgency during the pandemic, when output and logistics disruptions coincided with homebound shoppers turning to Alibaba Group Holding Ltd. and other internet retailers for their produce.Now, some of the country’s largest private companies have joined in with state efforts to help growers boost production, improve food quality and lower prices. For the e-commerce giants, it’s one way of strengthening their foothold in an online grocery market that’s expected to be worth more than $120 billion by 2023, without running afoul of Beijing’s recent crackdown on monopolistic practices like predatory pricing and forced exclusivity arrangements.In Fujian along the eastern coast, Alibaba has provided chicken farmers with smart bracelets that track the health of their poultry, while under JD.com Inc.’s guidance, rice growers in China’s arid north have installed smart sensors to gain real-time insights for irrigation. Out west, scientists in Yunnan are teaming up with Pinduoduo Inc. to use artificial intelligence to automate strawberry planting.“Agriculture is a critical area supported by the Chinese government,” said Liu Yue, an analyst with market research firm EqualOcean. With rural youths flocking to cities for better jobs and food safety increasingly threatened by pesticides and outdated farming methods, the country’s tech champions are eager to lend Beijing a hand, she said.The driving force behind the e-commerce platforms’ push into smart agriculture is the boom in online groceries, which is expected to double to about 820 billion yuan ($127 billion) by 2023 from last year, according to iResearch. The category overtook consumer electronics as the biggest contributor at JD.com in the first half last year, while Alibaba is making a bigger push into the business by taking a larger stake in hypermart Sun Art Retail Group Ltd.Meanwhile, a clutch of smaller rivals ranging from Xingsheng Youxuan and MissFresh-- both backed by Tencent Holdings Ltd. -- to Dingdong Maicai are in the process of raising billions of dollars to grab larger shares of the online fresh foods distribution market. That prompted state media to warn in December against overcrowding in the sector, saying instead that internet giants with immense data and advance algorithms should do more in technology innovation.“Covid-19 has helped accelerate the conversion of such purchases to online channels,” said Vey-Sern Ling, an analyst with Bloomberg Intelligence. “It’s a large untapped market, and the companies have to participate or be left behind.”At a time when Chinese leaders are clamping down on monopolies in areas from fintech to e-commerce, smart agriculture is one sphere where the tech giants’ commercial interests are aligned with the national agenda.In guidelines issued on Sunday, the State Council called for increased private investment to develop modern farming techniques and empower villages using advanced technologies. Breeding and cultivation sciences were also listed as one of Beijing’s top tech priorities for the next five years, alongside AI, quantum computing and computer chips. JD has said its smart farm projects are at least 50% funded by government subsidies.Despite the efforts, the growing appetite for fresh fruits and vegetables has left most of China’s traditionally labor-intensive farms -- roughly 98% of the 200 million operators are families or small businesses -- struggling to keep up. The country’s restrictions on land ownership and diverse terrain spanning the steppes of Inner Mongolia to the tropical shores of Hainan island in the south make it difficult to implement the industrial-scale farming that’s commonly seen in the U.S. and Europe. Data from the National Bureau of Statistics also show that about a third of farm workers are aged 55 or older, and the birthrate is at record lows, driving labor costs higher.Lei Jinrong is one farmer who’s benefited from partnering with the online retailers. The owner of Fuxin Farm in Fujian province has equipped 1,000 of his chickens with Apple Watch-style bracelets supplied by Alibaba. The devices digitally track the number of steps the birds take each day and anything below 20,000 would be an early sign of illness, he said, adding that he no longer needs to patrol his fields in search of sick poultry. This means Lei can expand production without hiring more workers -- good news as average salaries in his village have almost quadrupled over the past decade.In the eastern province of Shandong, peach farmers increased revenue by 50% last year after using JD’s blockchain technology to encrypt each step of the planting process and increase trust and transparency, attracting consumers long weary of food scandals from tainted milk powder to imitation eggs.“The improved efficiency and the economies of scale will drive down costs while higher-quality produce will yield better prices,” said Charlie Chen, head of consumer research at China Renaissance in Hong Kong. This will benefit both farmers and the e-commerce operators, he said.Pinduoduo, which raised $6.1 billion in November in part to finance its agricultural innovations, is counting on these efforts to help it quadruple sales of farm products to 1 trillion yuan by 2025. The company expects the initiatives to help it diversify beyond online retail, as it aims to license cutting-edge farming technology down the road, according to David Liu, vice president of strategy.Many of these initiatives are still in their infancy and scaling up will take time, as farmers have only recently started to collect data -- the foundation of running AI and other next-generation technologies -- and test new methods of growing. But the twin drivers of surging demand for online produce and Beijing’s push for self-sufficiency in food supplies means the tech behemoths’ forays into modernizing China’s farms have only just begun.“Smart agriculture is really the way to move forward,” said Lei, the chicken farmer. “We all have to innovate.”(Updates with competition in online groceries in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • 2 Hot Marijuana Stocks Even Warren Buffett Might Want to Buy in 2021

    Cannabis companies seem like they're the opposite of what the famed investor Warren Buffett would like. Despite the industry's present-day schlock, there are two contenders I think could eventually fit Mr. Buffett's exacting bill. While there's no guarantee that they'll ever actually make it to the Berkshire Hathaway portfolio, you shouldn't be too surprised if they do.

  • China's state broadcaster turns to France for license to broadcast in Europe after losing UK rights

    China’s state news broadcaster is asking France’s media watchdog for permission to continue airing in Europe, after a UK regulator stripped the network of its licence earlier this month. France’s Conseil Supérieur de l’Audiovisuel (CSA) confirmed to the Financial Times (FT) on Sunday that it was reviewing a request by China Global Television Network (CGTN) filed in December. The UK regulator Ofcom revoked CGTN’s license following an investigation which concluded that the network didn’t have “editorial responsibility” over its content, making it illegal to broadcast in the UK. Unlike the UK, France does not have any laws that prohibit state-controlled media from broadcasting in the country. Still, a spokesperson for France’s media watchdog told the FT that it would carry out “additional analysis” in its review in light of Ofcom’s ruling. CGTN launched its European hub in London less than two years ago. The network is hoping France will let it stay in Europe under rules outlined in a decades-old treaty signed by the Council of Europe, a 47-member pan-European organisation of which France, the UK and China are all members. The treaty states that an international broadcaster can air in any member country as long as it falls under the jurisdiction of one member. If the CSA determines CGTN falls under its jurisdiction, it could grant the network permission to continue to broadcast in the UK, as the treaty is separate to and not affected by Brexit. The affair has increased tensions between China and the UK, and left other European countries a difficult situation. Several distributors that broadcast CGTN in Germany have temporarily stopped airing the channel. Meanwhile, the channel is still available for streaming online. In response to Ofcom’s decision, China’s National Radio and Television Administration announced earlier this month it was barring BBC World News from continuing to air in China and Hong Kong. In a statement, the BBC’s Director-General Tim Davie called Beijing's decision “deeply worrying.”

  • New UN ambassador could restore US credibility on human rights in China and worldwide

    Thomas-Greenfield should expand the coalition of nations willing to brave China's retaliation and condemn its abuses in Xinjiang, Hong Kong and Tibet.

  • UK's Johnson to plot path out of lockdown on Monday

    British Prime Minister Boris Johnson will plot a path out of COVID-19 lockdown on Monday in an effort to gradually reopen the battered $3 trillion economy, aided by one of the fastest vaccine rollouts in the world. But a fast start to the vaccine rollout plus a near-two month tough national lockdown means Johnson can now set out a phased easing of the restrictions, prioritising a return to schools and social mixing outdoors. Under pressure both from politicians in his own Conservative Party to restart the economy, and from scientific advisers who fear a resurgence of the virus if he unlocks too quickly, Johnson has a difficult course to chart.

  • 3 Large-Cap Stocks That Turned $250,000 Into $1 Million (or More) in 6 Months

    These big companies have been virtually unstoppable since mid-August, but it's unclear if these moves are sustainable.

  • Northern Ireland parties take legal action against Brexit deal

    Members of Northern Ireland's two largest pro-British parties are set to take part in legal action challenging part of Britain's divorce deal with the European Union, the parties said on Sunday. The Democratic Unionist Party (DUP) and Ulster Unionist Party (UUP) are to join other pro-British figures to challenge the Northern Ireland Protocol, which has created trade barriers between the British region and the rest of the United Kingdom. The protocol, which is designed to protect the European Union's single market without creating a land border on the island of Ireland, has caused significant disruption to trade since it came into force at the start of the year.

  • Copper Surges Above $9,000 as Deficit Concern Spurs Record Rally

    (Bloomberg) -- Base metals stormed higher on Monday, with copper rallying above $9,000 a ton on bets that increased demand driven by the recovery from the pandemic will spur a historic deficit, putting the economic bellwether on course for a record run of monthly gains. Nickel topped $20,000 a ton.Copper climbed more than 3% on Monday and is heading for an unprecedented eleventh monthly rise in February. Metals are on tear on expectations that post-crisis demand will outstrip near-term supply. That may both reinforce speculation about about a new commodity supercycle and stoke concern about rising price pressures as the world economy recovers from the pandemic.The metal’s revival marks a turnaround from earlier in the month, when copper hit turbulence as investors signaled the need for more details about stimulus measures and on concerns about a softening in Chinese demand. But prices rose during China’s Lunar New Year as factory production was more buoyant than usual. Expectations for a revival in inflation have helped, too“Market sentiment is heated right now in anticipation of a new cycle of global inflation,” Jia Zheng, an analyst with Goldtrust Futures Co., said from Shanghai. “Chinese investors returning from Lunar New Year holidays are waiting for more stimulus from the U.S. and Europe. Fundamentally, Chinese demand has exceeded expectations, as travel restrictions boosted consumption.”The risk of faster inflation has prompted a selloff in bonds globally, with the benchmark 10-year U.S. Treasury yield jumping to the highest in about a year on Monday. A gauge derived from bond market pricing signals expectations for average inflation of about 2.2% in the U.S. over the next decade.Goldman’s ViewGoldman Sachs Group Inc. reinforced its bullish copper stance last week, saying that China’s return from the week-long break had triggered another leg higher for prices. The market is facing the largest deficit in a decade this year, with a high risk of scarcity over the coming months, according to the bank.There are already signs of emerging tightness on the London Metal Exchange, as spot contracts trade at a premium to futures. That pattern, known as backwardation, was a feature of the market during a record-breaking boom in Chinese demand last year, and suggests that spot demand is once again outpacing supply as exchange inventories run low.Three-month copper traded at $9,141.50 a ton on the LME at 11:02 a.m. in Singapore after hitting $9,187, the highest since 2011. In China, the SHFE contract hit the daily limit. Other metals rose, with LME nickel hitting $20,010 a ton, and tin at the highest since 2011.Copper’s rally has been a boon for suppliers. Jiangxi Copper Co., China’s top producer, gained as much as 13% in Hong Kong to the highest level since 2013. In Australia, OZ Minerals Ltd. has more than doubled over the past 12 months, and shares in BHP Group and Rio Tinto Group rose on Monday.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • US coronavirus death toll approaches milestone of 500,000

    The U.S. stood Sunday at the brink of a once-unthinkable tally: 500,000 people lost to the coronavirus. A year into the pandemic, the running total of lives lost was about 498,000 — roughly the population of Kansas City, Missouri, and just shy of the size of Atlanta. The figure compiled by Johns Hopkins University surpasses the number of people who died in 2019 of chronic lower respiratory diseases, stroke, Alzheimer’s, flu and pneumonia combined.

  • New WTO boss backs British calls for new services rules

    The new World Trade Organization chief has backed Britain’s push for a shake-up of global rules in services trade, but warned sweeping reforms of the under-fire organisation will take a long time. Ngozi Okonjo-Iweala, the first African and first woman to head the trade referee, said the “sooner we can pin down the rules” in trade in services the better after the UK called for them to be modernised. The former Nigerian finance minister also told The Daily Telegraph that wider WTO reforms would help Britain’s post-Brexit trade thrive as she vowed to push to reduce export restrictions blocking vaccine and medical supplies. Dr Okonjo-Iweala, who was appointed WTO director general last week, inherits an organisation in crisis and in need of huge reform after failing to cope with the surge in protectionist trade policies in recent years. She said trade in services will be the “wave of the future” as she admitted the beleaguered trade referee has “nowhere to go now but up”. In response to the UK’s calls for a trade in services revamp Dr Okonjo-Iweala said: “I do agree that this is an area in which the WTO can really help and do much better to get the multilateral trading system working… Trade in services is growing in leaps and bounds.” International trade secretary Liz Truss has repeatedly called for the WTO to help liberalise trade in services as part of wider reforms. Last month she said the UK wanted to “lead the creation of new rules in areas like digital and data, services and the environment”.

  • After guaranteeing contract, Rockets to part ways with DeMarcus Cousins

    Mark Berman: "The Rockets guaranteed his salary because management appreciates his professionalism and how he went about his business."

  • Why You Might Be Interested In FutureFuel Corp. (NYSE:FF) For Its Upcoming Dividend

    FutureFuel Corp. ( NYSE:FF ) is about to trade ex-dividend in the next 4 days. This means that investors who purchase...

  • Pemex Gets New Tax Benefits of as Much as $3.6 Billion

    (Bloomberg) -- Mexico President Andres Manuel Lopez Obrador announced new tax benefits for Pemex as the beleaguered state oil company seeks to reverse long-term production declines and reduce debt.Petroleos Mexicanos will get an additional 14% credit stimulus to apply to the taxes it pays on hydrocarbons capped at 73.3 billion pesos ($3.6 billion) for this year, according to a presidential decree. The new benefit comes in addition to previous measures that reduced Pemex’s profit-sharing duty from 65%, to 58% in 2020 and 54% in 2021, respectively.Pemex says that it has one of the industry’s highest tax burdens, paying about $27 billion in net taxes last year, according to a January presentation. It’s debt of $110.3 billion is the highest of any major oil company, and its crude oil output has declined every year since reaching a peak in 2004.Finance Minister Arturo Herrera said the government will be working on Pemex debt in the coming weeks, in an interview with Bloomberg News on Wednesday. The government will make a capital injection of as much as $1.6 billion into Pemex this year, said a person with knowledge who wasn’t authorized to talk publicly about the deliberations. (Updates with details of capital injection in final paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Stripe Names Digital Currency Advocate, Former BoE Governor Carney to Board

    Carney has argued for a digital replacement to fiat, amid the U.S. dollar’s waning hegemony.

  • Tom Izzo explains everything that's gone wrong for Michigan State basketball this season

    Here is Tom Izzo's breakdown of a "frustrating" Michigan State basketball season that could end up his worst in 26 seasons with the Spartans.

  • Inside Entrepreneur and Influencer Roni Madhvani’s Eccentric Art Deco Watch Collection

    The equisite timepieces from Cartier, Patek Philippe and more harken back to the golden age of watchmaking.

  • Former Celebrities Who Have Normal Jobs Now

    Many people give fame a try for 15 minutes or so and decide to take a hard pass. After realizing life in the spotlight isn't their true calling, some go on to pursue surprisingly normal careers. See:...

  • China May Ban Rare Earth Tech Exports on Security Concerns

    (Bloomberg) -- China may ban the export of rare-earths refining technology to countries or companies it deems as a threat on state security concerns, according to a person familiar with the matter.The Chinese government is currently conducting a review of its rare-earths policy. Officials view the technology needed to refine and purify the raw materials as a more powerful weapon in protecting state interests than the actual minerals, and is looking at banning sales of the technology to some countries or companies, according to the person, who asked not to be identified because the information isn’t public.While China has no plans to restrict shipments of rare earths to the U.S., it is keeping the plan in its back pocket should a trade war break out again, the person said. The Asian nation is also exploring a ban on rare earths as part of its sanctions on some individual companies, including Lockheed Martin Corp., which violated China’s core interest over arms sale to Taiwan, the person said.China’s Ministry of Commerce didn’t immediately respond to a fax seeking comment.Shares of MP Materials Corp., the lone U.S. rare-earths producer, closed 6.4% higher on Friday after earlier touching a record $46.84 in New York. The U.S. Defense Department in November awarded the company $9.6 million to fund processing and separation of light rare-earths at its Mountain Pass operations, a move that signals the nation’s aim to expand domestic production of the permanent magnets that make rare-earths so coveted.China controls most of the world’s mined output of rare earths, a broad group of 17 elements that are used in everything from smartphones to fighter jets, and has a stranglehold over processing. Its dominance would leave overseas industries with few avenues to immediately secure supply if curbs were to be put in place.The minerals have previously been touted as a possible weapon in the U.S.-China trade war, with Beijing readying a plan in 2019 to restrict shipments to hurt the American economy. The U.S. imports about 80% of its rare-earth compounds and metals from the Asian nation, according to government data.Those curbs were never adopted, though it spurred the U.S. and Europe to seek out ways to cut their reliance on a single supplier. While rare earths are relatively abundant, mine-able concentrations are less common than other ores and countries face hurdles including high costs and environmental concerns in setting up domestic industries.Read more: U.S., Europe Face Hurdles to Cut China Reliance for Rare EarthsDonald Trump last year signed an executive order aimed at expanding domestic output of rare-earth minerals, a year after the Department of Defense was ordered to spur the production of magnets. The U.S. has also been awarding contracts and signing investment agreements aimed at establishing its own processing capabilities.Earlier this week, the Financial Times reported that China is exploring whether it can hurt U.S. defense contractors by limiting supplies of rare-earth minerals that are critical to the industry.Meanwhile, China, which typically issues two batches of rare-earths mining quotas a year, boosted the first batch for 2021 to 84,000 tons, a 27% increase from last year, according to a statement from Ministry of Industry and Information Technology Friday. Last year’s total hit a record 140,000 tons as demand strengthened for the strategic materials.(Updates with MP Materials share move in fifth paragraph, China’s quota in 11th.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.