Indonesia, renowned for its diverse culture and growing economy, is becoming an appealing destination for foreign investors, including Malaysians seeking to expand their businesses. But what are the possibilities for Malaysians to own a business in Indonesia? Let’s break down the steps and sectors where full foreign ownership is permitted.
Also read: Do Malaysians Need a Visa to Indonesia?
Can Malaysian Citizens Start and Own a Business in Indonesia?
Yes, Malaysians can start and own businesses in Indonesia, provided they operate in industries that allow full foreign ownership. The Indonesian government divides business sectors into the Positive Investment List (Daftar Positif Investasi or DPI) and the Negative Investment List (Daftar Negatif Investasi or DNI).
- Positive Investment List (DPI): Lists sectors fully open to foreign investors, aiming to stimulate economic growth through foreign ownership.
- Negative Investment List (DNI): Specifies sectors where foreign investment is restricted or comes with conditions.
Also read: Can a Foreigner Own 100% of a Business in Indonesia?
Business Sectors in Indonesia Open to 100% Foreign Ownership
According to the Positive Investment List, several industries in Indonesia allow 100% foreign ownership for Malaysian entrepreneurs, including:
- Agriculture: Crop cultivation, livestock, and aquaculture.
- Manufacturing: Production of goods such as textiles and electronics.
- Tourism: Management of hotels, resorts, and related services.
- Telecommunications: Internet service providers and mobile networks.
- Financial Services: Banking, insurance, and other related institutions.
- Healthcare: Establishing hospitals, clinics, and other medical services.
These industries offer significant growth opportunities, with Indonesia encouraging foreign investments to support its economic expansion.
Also read: Top Foreign Investment Sectors in Indonesia
Sectors with Restrictions on Foreign Investment
However, some industries do not permit full foreign ownership and may have specific requirements. Sectors like mining, oil and gas, real estate, and retail often come with conditions such as:
- Minimum investment thresholds.
- Local partnership requirements.
- Obligations related to export or technology transfers.
These requirements can vary by industry, so it is important to consult the Indonesian Investment Coordinating Board (BKPM) or professional services for the latest guidelines. (You can consult with us!)
Also read: 25 Profitable Business Ideas and Opportunities in Indonesia
How Malaysians Can Establish a Business in Indonesia
Malaysian entrepreneurs have two key options for starting a business in Indonesia:
- PT PMA (Penanaman Modal Asing): A limited liability company with foreign ownership.
- PMA Representative Office: A non-profit office that represents the interests of a foreign company in Indonesia.
To set up a PT PMA, Malaysian business owners need to:
- Secure a minimum paid-up capital of IDR 10 billion (around MYR 3 million).
- Appoint at least two directors, including one who is an Indonesian citizen.
- Obtain the necessary approvals from the BKPM.
Also read: Corporate and Company Structure in Indonesia: Complete Guide
For a PMA Representative Office, the process is more straightforward, requiring a registered office in Indonesia and the appointment of an Indonesian citizen as a representative.
Indonesia offers promising business opportunities for Malaysian entrepreneurs, especially in industries like agriculture, manufacturing, and tourism. With the right preparation and knowledge of the regulations, setting up a business in Indonesia can be a simple and rewarding process. Whether you’re establishing a PT PMA or a representative office, understanding the relevant investment rules is key.
For expert help with company registration in Indonesia, seek advice from professionals who can guide you through the process. InvestinAsia offers dedicated services for Indonesia PMA company registration and setting up representative offices in Indonesia.
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