Foreigners Can Own Property, Indonesian Government Says

Jakarta Globe, Katrina Nicholas, March 31, 2010

It's game on after the Investment Coordination Board of Indonesia announced that foreigners will be allowed to own property.

Indonesia plans to allow foreigners to own property in the country and has completed its review of investment rules under the so-called negative list, the country’s investment coordination agency said on Wednesday.

The country will deregulate its property industry by the end of the first half, paving the way for foreigners to buy homes and commercial real estate directly, Gita Wirjawan, chairman of the Investment Coordination Board of Indonesia, said in Jakarta. The move will “unleash value,” he said.

Indonesia has been reviewing a 2007 presidential decree known as the “negative investment list,” which limits overseas ownership in companies. The new rules may include changes in the cap on foreign stakes in some industries, and a provision that companies whose shares are traded on the exchange are excluded from the regulation, the investment agency said in July.

A draft of the revised investment rules is with President Susilo Bambang Yudhoyono, Wirjawan said at a forum on Indonesia’s investment climate. He said he sees no reason why Indonesia’s credit ratings won’t rise to investment grade in the next 18 months.

Standard and Poor’s raised the country’s sovereign credit rating to a 12-year high of BB from BB- on March 12, prompting investors such as Cornel Bruhin at Clariden Leu AG in Zurich to predict more upgrades by rating companies in the coming months. The SandP rating, which has a positive outlook, is two levels below investment grade.

Moody’s Investors Service in September raised the country’s sovereign debt ratings one level to Ba2, the highest level in 11 years. Fitch Ratings on Jan. 25 raised Indonesia‚Äôs credit rating to BB+, one level below investment grade.

Bloomberg