<article>Indonesia has emerged as the second largest M&amp;A (mergers and acquisitions) market for Japanese investors in South East Asia this year. Japanese investments account for 16.4% of the country’s total foreign direct investment (FDI), in 2014</article>

Indonesia has emerged as the second largest M&amp;A (mergers and acquisitions) market for Japanese investors in South East Asia this year. Japanese investments account for 16.4% of the country’s total foreign direct investment (FDI), in 2014
Global risk solutions provider Kroll notes that Japanese’s investment in Indonesia is 18.3% of all regional activity although Thailand is still out in front with 44% of the region’s total deal value.
Kroll recapped that in 2013, Indonesia overtook Thailand to become the second highest Japanese FDI recipient, just behind China and hit new high for its overall deal value (just over $2 billion).
Indonesia is a vital investment hub for the Japanese, and remains a favourable market among its Southeast Asia peers for M&amp;As, added Kroll.
A strong consumer base with an upwardly mobile population makes the country doubly attractive for investors. Indonesia&#8217; s private consumption makes up 55% of its gross domestic product, and by 2030, 90 million of its citizens are expected to move into the middle income bracket.
Kroll noted that  Indonesia could account for 40% of the region’s growth by that time.
Among the sectors, Indonesian financial services industry shows huge potential. Data from Fitch Ratings highlights that the foreign ownership cap in Indonesia (80%) is far more competitive than India (26%) and Thailand (49%).
That said, senior managing director Tadashi Kageyama, Kroll, pointed out some noteworthy risks and challenges in the Indonesian market for foreign investors.
“While the financial services sector is regulated in Indonesia, investors face compliance challenges, money laundering issues and the possibility of embezzlement,” Kageyama said in the statement.
“In the manufacturing sector, supply chain fraud and kickback bribery are the most common challenges, &#8221; he added.
(Edited by Yamini Dhall)

Japanese investors big on Indonesia

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Japanese investors big on Indonesia

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