Maersk May Shelve $3B Indonesia Expansion Plan Due To Country's Foreign Ownership Limits

Indonesian foreign-ownership laws may scuttle a $3 billion expansion plan by shipping giant Maersk Line, Jakarta Globe reported State-Owned Enterprise Minister Rini Soemarno as saying days before a visit by Danish Queen Margarethe II's visit to the country this week.

The Danish company wants to enter domestic shipping in Indonesia, but according to 2005 and 2008 laws, only companies majority owned by Indonesians can do so, the Globe said.

"[Maersk] expressed interest to transports goods within our territory," the Globe reported Rini as saying. "But they stumbled upon our shipping law that requires majority shareholders to be locals. They wanted to be the majority."

The government is tweaking foreign-ownership laws in some industries, but Rini didn't say whether domestic shipping was included, the Globe said. If Indonesia relaxes the rules for domestic shipping, it will be following the footsteps of neighboring Philippines, which did so earlier this year.

Indonesia has recently stepped up its courting of foreign investment. It expanded income tax holidays and said it will lower corporate income taxes next year while working on new policies for economic zones, the Wall Street Journal reported in August.