Plantation Law 2014 - New foreign investment restrictions to come

Asia Capital Markets Oil & Gas

In brief

Given Indonesia's status as the world's top palm oil producer, investment in the plantation sector should be one of Indonesia's most attractive opportunities for foreign investors. This is supported by the most recent Negative Investment List, which became effective on 24 April 2014 and which permits foreign ownership in this sector of up to 95 per cent.

A draft Bill for a new plantation law had controversially suggested that foreign investment might be limited to 30 per cent with retrospective effect. The plantation law has now been rushed through Parliament on 29 September 2009 without this limitation (the Plantation Law), but restrictions affecting foreign investments may still be imposed through the new law's implementing regulations.

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