Indonesia, with its diverse culture and stunning landscapes, has become an attractive destination for foreign investors seeking opportunities in various business sectors. But, can a foreigner own 100% of a business in Indonesia?
Let’s explore the opportunities for foreign ownership of businesses in Indonesia.
Also read: Exploring the Types of Business Licenses in Indonesia
So, Can a Foreigner Own 100% of a Business in Indonesia?
Yes, a foreigner can start and own 100% of a business in Indonesia, as long as the business operates in a sector that is open to 100% foreign ownership.
The Indonesian government has categorized business sectors into two groups:
Negative Investment List (Daftar Negatif Investasi or DNI)
These are sectors that are closed to foreign investment or where foreign investment is allowed only under certain conditions.
Also read: 10 Challenges of Doing Business in Indonesia
Positive Investment List (Daftar Positif Investasi or DPI)
These are sectors that are open to foreign investment, with no restrictions on the percentage of foreign ownership. (check the complete guide for Indonesia’s Positive Investment List)
The DPI includes sectors that warmly welcome foreign investment, enabling them to thrive and contribute to the country’s economic growth. In this article, we’ll delve into the exciting business sectors of PMA Companies in Indonesia, with a focus on the Positive Investment List.
Also read: Indonesia’s Special Economic Zones (SEZs): A Complete Guide
Indonesian Business Sectors Open to 100% Foreign Ownership
The following are some of the business sectors that allow for 100% foreign ownership in Indonesia, according to the Positive Investment List (DPI) of Indonesia:
- Agriculture: This includes the cultivation of agricultural crops, livestock, and aquaculture.
- Manufacturing: This encompasses the production of various goods, such as textiles, garments, electronics, and furniture.
- Construction: This involves the construction of buildings, roads, and other infrastructure.
- Transportation: This covers the operation of airlines, shipping lines, and transportation companies.
- Telecommunications: This includes the provision of telecommunications services, such as internet, telephone, and mobile phone services.
- Tourism: This comprises the operation of hotels, restaurants, and other tourism-related businesses.
- Education: This involves the operation of schools, universities, and other educational institutions.
- Healthcare: This covers the operation of hospitals, clinics, and other healthcare facilities.
- Financial services: This includes the provision of banking, insurance, and other financial services.
- Information technology: This encompasses the development and provision of information technology services.
It is important to note that the DPI may change, so it is advisable to check with the Indonesian Investment Coordinating Board (BKPM) for the latest information.
Also read: 25 Profitable Business Ideas and Opportunities in Indonesia
Sectors with Conditional Foreign Investment
Meanwhile, the following are some of the business sectors that are open to foreign investment with certain conditions:
- Mining
- Oil and gas
- Electricity
- Water
- Media
- Retail
- Real estate
Also read: 10 Essential Things About Business Culture in Indonesia
The “certain conditions” for foreign investment in Indonesia vary depending on the business sector. Some of the common conditions include:
- Minimum investment amount
- Local partner requirement
- Export requirement
- Technology transfer requirement
- Infrastructure development requirement
It is important to note that the specific conditions for foreign investment in Indonesia are subject to change. It is always advisable to check with the Indonesian Investment Coordinating Board (BKPM) for the latest information.
Also read: Where to Find Business Registration Number in Indonesia
Establishing a Foreign Business in Indonesia
There are two ways for a foreigner to establish a business in Indonesia:
- PT PMA (Penanaman Modal Asing): This is a limited liability company that can be wholly or partially owned by foreign investors.
- PMA Representative Office: This is an office set up by a foreign company to represent its interests in Indonesia. It cannot generate revenue or profits.
Also read; The Types of Companies and Business Entities in Indonesia
To establish a PT PMA, foreign investors must meet the following requirements:
- Have a minimum paid-up capital of IDR 10 billion (approximately USD 700,000).
- Appoint at least two directors, one of whom must be an Indonesian citizen.
- Obtain approval from the Indonesian Investment Coordinating Board (BKPM).
The process of establishing a PT PMA can be complex and time-consuming. To receive assistance with the process, you can trust InvestinAsia’s services for PMA registration in Indonesia.
Chat with us for FREE consultation and get a special offer!
To establish a PMA Representative Office, the foreign company must meet the following requirements:
- Have a registered office in Indonesia.
- Appoint a representative who is an Indonesian citizen.
- Obtain approval from the BKPM.
The process of establishing a PMA Representative Office is relatively simple and can be completed within a few weeks.
To ensure that the process goes smoothly and hassle-free, you can also rely on InvestinAsia’s services for Representative Office set up in indonesia.
Chat with us for FREE consultation and get a special offer!
Also read: Corporate and Company Structure in Indonesia
Foreigners can own 100% of a business in Indonesia in areas like agriculture, manufacturing, and tourism as per the Positive Investment List (DPI). However, some sectors have limitations or are entirely closed to foreign ownership. To establish a business, foreigners can choose a limited liability company (PT PMA) allowing full ownership but requiring a minimum investment, or a representative office which cannot generate profits.
Also read: Starting a Small Business in Indonesia for Foreigners
To facilitate the business establishment process, you can rely on InvestinAsia’s services for company registration in Indonesia.
Chat with us now to get a special offer!
Also check our guide for specific countries:
- Indonesia Company Registration for Malaysian
- Indonesia Company Registration for Singaporean
- Indonesia Company Registration for United States Entrepreneurs
- Indonesia Company Registration for South Korean
- Indonesia Company Registration for UK Entrepreneurs
- Indonesia Company Registration for Brazilians
- Indonesia Company Registration for Taiwan Entrepreneurs
- Indonesia Company Registration for Indian Entrepreneurs
- Indonesia Company Registration for Vietnamese Entrepreneurs
- Indonesia Company Registration for Hong Kong Entrepreneurs
- Indonesia Company Registration for Turkish Entrepreneurs
- Indonesia Company Registration for Thailand Entrepreneurs
- Indonesia Company Registration for Philippines Entrepreneurs
- Indonesia Company Registration for Canadian Entrepreneurs
