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.
So, Can a Foreigner Own 100% of a Business in Indonesia?
Yes, a foreigner can 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.
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.
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.
Sectors with Conditional Foreign Investment
Meanwhile, the following are some of the business sectors that are open to foreign investment with certain conditions:
- Oil and gas
- Real estate
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.
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.
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.
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.
Indonesia’s thriving business landscape offers a diverse array of opportunities for foreign investors across various sectors. The Positive Investment List (DPI) highlights these prospects, providing a roadmap for international companies to contribute to the country’s economic growth while reaping the benefits of their investments. As Indonesia’s potential continues to unfold, the doors are open for those ready to make their mark on this vibrant nation.
To facilitate the business establishment process, you can rely on InvestinAsia’s services for company registration in Indonesia.