Indonesia to Allow Foreign Direct Investment in Cinema Industry?
A non-ministerial agency in Indonesia advises the government to open the cinema industry to foreign investment in an effort to boost the local movie industry while encouraging the arrival of more foreign direct investment (FDI) into Indonesia, hence boosting sluggish economic growth in Southeast Asia's largest economy. Currently, FDI in the domestic movie industry is not allowed by a Presidential Regulation issued in 2014. According to this regulation, companies that produce, distribute, or promote movies as well as movie theaters or cinemas have to be fully Indonesian-owned.
There are currently around 1,050 cinemas in Indonesia (two-thirds of which are concentrated in the Greater Jakarta region). However, the country's Creative Economy Agency, a non-ministerial agency that oversees the country's creative sector, would like to see this figure grow to between 5,000 and 20,000 cinemas. Foreign investment into this sector may be the key to overcome the current shortage of cinemas outside the Jakarta region.
However, through the capital market foreigners can purchase a stake in listed Graha Layar Prima (known for its Blitzmegaplex cinema chain), the country's second-largest cinema operator in Indonesia and the only cinema operator that has conducted an initial public offering (IPO) on the Indonesia Stock Exchange. In 2014, the company raised IDR 223 billion (approx. USD $16 million) through this corporate action. The company conducted an IPO to finance the construction of new movie theaters in several cities on Java, Indonesia's most populous island.
Foreigners can also own a stake (up to 49 percent) in firms that are engaged in technical services in the movie industry (for example, movie studios, voice recording firms, and film processing studios).
The largest movie theater chain in Indonesia is privately-held Cinema 21.