ASEAN Regulatory Brief: Indonesian FDI, Thai Labor Compliance, and Real Estate in Myanmar

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Indonesia: Government Set to Open Several Sectors to Foreigners in boost to FDI

Indonesia’s government is set to open several sectors including wholly owned cold storage, sugar factories, and rubber manufacturing to foreigners. The authorities stated that the cold storage industry, in particular, will be opened without any regional restrictions. This should help the fishing processing industry as there is a lack of cold storage facilities.

While the industries will be opened for 100 percent investment, certain conditions will be imposed. For example, foreigners will be able to own sugar and rubber manufacturing companies as long as they source 30 percent of raw materials from local farmers.

These moves come hot on the heels of the governments recently allowance of 100 percent foreign ownership in local e-commerce businesses. Foreign investment in retail including departmental stores, supermarkets and minimarkets is still being discussed.

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Thailand: Companies Lay Off Workers to Comply With Labor Law

Several companies in the seafood processing sector have laid off workers due to labor regulations which were imposed on 13 January prohibiting the employment of workers under 18 years of age. Seafresh Group, as well as other suppliers that supply to several retailers in the US and European markets, have made moves to comply.

In their defense, many companies have complained that employees falsified their age.  In the case of Seafresh, the local government instructed the company to perform a dental check for workers who were suspected to be under 18 years. However, human rights activists have stated that this may not be a reliable method.

The moves largely come as a response to regulators in the US and Europe which recently placed Thailand on a watch list for human trafficking. It is suspected that workers are brought in from Myanmar and Cambodia to provide low cost labor for many industries. Authorities in Thailand have denied that exports to the US, Europe and Australia were made using forced labor.

Myanmar: Government Allows Foreign Investment in Condos

On January 22nd, authorities within Myanmar passed the Condominium Law which allows for 40 percent foreign ownership in high-rise buildings. The law defines condominiums as being at least six floors on plots exceeding 20,000 square feet.

While foreigners can invest, they are not allowed to manage the condominium, which has created confusion. In addition, while condo owners will have shared ownership of both land the building, existing laws in the country prohibit foreign entities from owning land.

The Ministry of Construction will give further details on the Condominium Law including the number of floors, apartments, and parking lots required; as well as the materials to be used, and security and safety measures of the buildings. While the development will increase foreign investment, companies should wait for clarification from the government to mitigate any regulatory hurdles later on.



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