After undergoing a lengthy deliberation process, on 12 May 2016 the government issued Presidential Regulation No. 44 of 2016 on the List of Business Fields Which Are Closed and Conditionally Open to Investment,[1] commonly known as the Negative Investment List (Daftar Negatif Investasi – “2016 DNI”).[2] This regulation is fairly considered to be one of the boldest attempts yet made by the current presidential administration to boost and accelerate the influx of investment into Indonesia. Prior to the issuance of the 2016 DNI, efforts to achieve this ultimate goal were focused solely on the deregulation of various bureaucratic and licensing processes through the introduction of several economic-policy packages. This approach, however, made no attempt to alter the very essence of the investment provision, namely the Negative Investment List.
 
In general, a DNI is issued under an umbrella regulation on investment, namely Law No. 25 of 2007 on Investment (“Investment Law”). This law mandates that the government should determine the various business fields which are either entirely or partially closed to investment,[3] as they relate to the list of business fields set out under the Indonesian Standardized Business Fields Classification (Klasifikasi Baku Lapangan Usaha Indonesia – “KBLI”).[4]
 
Previous DNIs have basically aimed to balance efforts to attract both foreign and domestic investment with the need to protect the national interest, especially small- and medium-scale enterprises and cooperatives (“UMKMK”). Embracing these basic objectives, three DNIs were issued prior to the formulation of the 2016 DNI. The latest of these was Presidential Regulation No. 39 of 2014 (“2014 DNI”),[5] which aimed to protect Indonesia’s interests by accommodating specific investment needs in the context of the then forthcoming ASEAN Economic Community (AEC) era.
 
Now that the AEC era has been officially ushered in, the 2016 DNI is aiming to attract even more investment to Indonesia and places a greater emphasis upon increasing the country's competitiveness, both within the AEC and as part of the global economy beyond. With these goals in mind, the 2016 DNI sets out more flexible requirements for foreign investment, which mainly take the form of increases in foreign-investment caps (including the investment caps which have to be complied with by investors from ASEAN countries). Moreover, in a bid to protect the country’s UMKMKs, the 2016 DNI now encompasses a separate appendix for the various business fields which are reserved for UMKMKs only.
 
Essentially, the 2016 DNI revises various components of the 2014 DNI as they relate to the following investment sectors: 1) agriculture; 2) forestry; 3) marine and fisheries; 4) energy and mineral resources; 5) industry; 6) defense and security; 7) public works; 8) trade; 9) tourism and creative economy; 10) transportation; 11) communication and information technology; 12) finance; 13) the banking industry; 14) manpower;[6] 15) education;[7] and 16) health.
 
The 2016 DNI came into force on 18 May 2016 and replaces the 2014 DNI, although the implementing regulations to the 2014 DNI may still apply, so long as they do not contradict the 2016 DNI.[8]