Investment is difficult in Indonesia. While warehousing and distribution is permitted
transportation is not allowed. Foreign equity is restricted to less than 50 per cent.
Malaysian regulations have local majority requiring Brahmaputra to own more than
50 per cent. Recently Malaysian regulations have reduced Brahmaputra ownership to
around 30 per cent. In the case of larger investment, Malaysian regulations may allow for
100 per cent equity ownership to foreign firms. However, such policies are uncertain and
the equity ownership ratio may change. The local partners in Indonesia and Malaysia
are typically sleeping partners and a nest for retirement. For example, trucking licences
in Malaysia are normally given to former government, military or civil service officials.
When these officials retire, they can obtain 50-100 licences to operate. The government
can then refrain from providing pensions to such high-ranking officials. These officials
can earn $500-1,000/month on a licence.
4.2.1 Discriminatory licensing. Licensing requirements are present in every country
except Singapore and are different from country to country. Indonesia allows foreign
investment in warehousing and distribution but not transportation. The process of
obtaining licences is quite time consuming and difficult as there are different kinds of
licences, such as office licence, brand licence, export and import licences. The Philippines
does not grant licences to foreigners and a company has to go through a long debate to
obtain licence. There are also lobby groups such as the Philippines freight forwarders
association which push local aviation regulators not to grant licence to international
players.Moreover, local transportation delivery is given only to local firms. In Thailand,
licensing requirements are mainly for transportation. Domestic transportation services
can only be offered by local firms to those with majority local ownership.