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By Fransiska Nangoy and Tabita Diela
JAKARTA, Feb 22 (Reuters) - Indonesia's government hasissued a new regulation on investment following the passage ofits job creation law last year, which includes the removal ofsome restrictions on foreign investment in a bid to boostinvestment into its pandemic-hit economy.
The new rules for the law, often referred to as the "omnibuslaw" because it changes more than 70 laws, remove Indonesia'snegative investment list, which covers businesses not open toforeign investment, although still maintain caps on foreigninvestment in certain sectors.
The new rules on investment were among dozens of regulationsissued by the government late on Sunday to allow theimplementation of the omnibus law.
Under the new presidential regulation, the negativeinvestment list has been replaced by a "priority list", whichoffers incentives such as tax allowances or tax breaks oninvestments in some industries. Those businesses include coalgasification, geothermal exploration, and smelting of ores suchas nickel and copper.
Indonesia's economy contracted for the first time in morethan two decades last year as household consumption slumped andbusinesses delayed investment due to the coronavirus pandemic.
Government officials have said they expect the omnibus lawwill help prop up direct investment in Southeast Asia's biggesteconomy.
Tax holidays will also be offered on investments invaccine-making industry and some other pharmaceutical sectors,as well as in the production of electric vehicles (EVs) and someEV parts, the regulation showed.
The government is also easing rules for investment inalcoholic beverages, land transportation, ship vessel trafficinformation systems and flight navigation, among other sectors.
The new rules will come into effect 30 days from Feb. 2.
Restrictions will remain on investments in heritageindustries, including traditional shipbuilding, batik, andtraditional medicine and cosmetics.
($1 = 14,060 rupiah)(Editing by Ed Davies)