![\"Indonesia's](\"https:\/\/investinasia.id\/blog\/wp-content\/uploads\/2024\/08\/indonesia-mining-industry3.jpg\")
Before 2021, Indonesia used a Negative Investment List (Daftar Negatif Investasi or DNI)<\/a>. The logic was restrictive by default: if a sector wasn’t explicitly opened, foreign capital was generally not welcome. Investors had to check what they couldn’t do before figuring out what they could.<\/p>\n The Positive Investment List flipped that entirely. Under the current framework, every business activity is treated as open to investment, including foreign investment, unless it is expressly restricted, conditional, or reserved under specific regulations. That is a fundamental shift in how Indonesia positions itself to overseas capital.<\/p>\n This came out of the 2020 Omnibus Law on Job Creation (Law No. 11 of 2020)<\/a>, which was Indonesia’s attempt to modernize the regulatory environment, cut bureaucratic friction, and pull in more foreign direct investment. The result was one of the biggest relaxations of foreign ownership rules the country had ever seen. It opened over 200 business sectors to full or near-full foreign ownership<\/a>, including several that had been capped at 30% to 67% under the old DNI.<\/p>\n A lot of investors ask this. The short answer: the ownership framework itself has not changed. The list of which sectors allow 100% foreign ownership, and which impose caps, is still governed by Perpres 10\/2021 as amended by Perpres 49\/2021. No new presidential regulation has replaced these as of 2026.<\/p>\n What did change in 2025 were the implementation and licensing mechanics. Two regulations reshaped how investments are structured and processed in practice.<\/p>\n This updated sector risk classifications and the licensing framework tied to the OSS-RBA (Online Single Submission, Risk-Based Approach)<\/a> system. It categorizes businesses into four risk levels: low, medium-low, medium-high, and high risk. That classification affects what approvals are needed before starting operations. If your KBLI falls into a higher risk category now than it did before, expect more paperwork and longer processing times.<\/p>\n This is the more impactful update for foreign investors entering Indonesia in 2026. Effective October 2, 2025, it consolidates three earlier BKPM regulations (Nos. 3, 4, and 5 of 2021) into a single framework. There are four key changes investors need to know.<\/p>\n First: the minimum paid-up capital for a PT PMA<\/a> has dropped from IDR 10 billion to IDR 2.5 billion. That is a 75% reduction. Investors still need to commit to a total investment of IDR 10 billion per KBLI per project, but only IDR 2.5 billion must be deposited upfront. The rest can be realized progressively, per the business plan. This makes a real difference for smaller foreign companies and startups that were previously priced out.<\/p>\n Second: a 12-month lock-up rule now applies to the paid-up capital. Once deposited into the corporate bank account, those funds cannot be moved out for at least 12 months, unless used specifically for asset purchases, building construction, or documented operational expenses. This has to be declared in the OSS system during registration.<\/p>\n Third: the OSS system now automatically issues administrative sanctions when an LKPM (Investment Activity Report)<\/a> shows zero capital realization for four consecutive quarters. The government wants to see genuine business activity, not dormant shelf companies.<\/p>\n Fourth: investor KITAS rules are separate. If you need an Investor KITAS (the working stay permit for investor-category foreigners), each individual investor must still hold a minimum share value of IDR 10 billion to qualify. Immigration rules have not changed along with the corporate capital threshold.<\/p>\n For a broader view of how FDI flows into Indonesia under this framework, see our complete guide to foreign direct investment in Indonesia<\/a>.<\/p>\n Every business activity in Indonesia sits in one of four categories. Where your business lands determines your ownership limit, your eligibility for incentives, and what you need to satisfy before operations can begin.<\/p>\n There are 246 business fields classified here. These are activities the government wants to develop: capital-intensive, labor-intensive, technology-driven, or export-oriented sectors where Indonesia needs foreign capital and expertise.<\/p>\n To qualify as a priority sector, a business generally has to be capital-intensive, employ at least 200 workers with labor costs exceeding 15% of total production costs, invest in research and development, integrate into Indonesia’s upstream or downstream value chains, or operate within a Special Economic Zone (SEZ).<\/p>\n The incentives for priority sectors are real. Businesses investing over IDR 500 billion can receive a 100% Corporate Income Tax reduction for up to 20 years. Investments between IDR 100 billion and IDR 500 billion qualify for a 50% CIT reduction for up to five years. Non-fiscal incentives can include expedited business licensing and simplified work permit processes.<\/p>\n Notable priority sectors include renewable energy<\/a>, electric vehicle manufacturing, digital infrastructure, pharmaceuticals, biotechnology, downstream mineral processing (nickel<\/a>, copper, bauxite), and food processing. For more on Indonesia’s resource-based opportunities, see our guide on downstream industry investment in Indonesia<\/a>.<\/p>\n This category is open, but with conditions. Those conditions take several forms: sectors reserved for domestic investors, sectors with foreign ownership caps, sectors requiring special licenses from specific ministries, and sectors regulated under separate laws.<\/p>\n Some concrete ownership caps: private broadcasting agencies are limited to 49% foreign ownership. Domestic postal services cap at 49%. P2P lending platforms are capped at 85% under OJK regulations. Payment system infrastructure operators handling clearing and settlement are capped at 20%. Construction services sit at 67% for non-ASEAN investors (70% for ASEAN investors).<\/p>\n Real estate development, certain plantation activities, media and press publications, and mining companies with IUP licenses also fall here. Mining companies must divest 51% of shares to Indonesian interests within 10 years of commencing operations. This catches some investors off guard if they haven’t modeled it into their long-term ownership planning.<\/p>\n Also read:<\/strong> Comparing Indonesia\u2019s Foreign Business Entry Barriers vs. Other ASEAN Countries<\/a><\/p>\n There are 106 business lines here. Foreign investors or large enterprises can participate, but must do so through a formal partnership with cooperatives or micro, small, and medium enterprises (MSMEs). These tend to be sectors dominated by small businesses: labor-intensive, culturally significant, or low-capital in nature.<\/p>\n Of those 106 lines, 60 are allocated exclusively to MSMEs. The remaining 46 allow large-scale participation, including from foreign investors, but only through recognized partnership structures: joint ventures, sub-contracting, profit-sharing, or supply chain integration. Food and beverage retail, traditional craft production, local tourism activities, and certain agricultural and fisheries segments sit here.<\/p>\n Travel agencies are worth flagging. Even though hotels rated two stars and above allow 100% foreign ownership, domestic travel agency operations carry partnership requirements. Hospitality investors who want to layer in tour operations need to account for this distinction.<\/p>\n This is the default position under the Positive Investment List, and it covers the majority of business activities. Foreign investors can hold 100% of shares in a PT PMA with no partnership requirements and no additional ownership caps, beyond the standard incorporation and OSS-RBA licensing process.<\/p>\n If a sector is not explicitly restricted through one of the other three categories, it sits here and is fully accessible.<\/p>\n Not sure which category your business falls under?<\/p>\n Our team can review your KBLI code, confirm ownership limits, and map the right licensing path for your sector.<\/p>\n Ownership eligibility under the Positive Investment List is confirmed at the KBLI level (the five-digit business classification code), not at the broad industry label. A manufacturing company and a pharmaceutical wholesaler might both fall under “healthcare” in general conversation, but their specific KBLIs can carry completely different ownership rules. Always confirm the KBLI before structuring your shareholding.<\/p>\n With that caveat in place, the following sectors are among those where full foreign ownership is permitted under Perpres 10\/2021 and Perpres 49\/2021. For a comprehensive review of how ownership percentages work across industries, see InvestinAsia’s guide on 100% foreign business ownership rules in Indonesia<\/a>.<\/p>\n This sector is extensively open. Textiles and garments, electronics, furniture, food and beverage processing, pharmaceutical manufacturing, chemical products, automotive parts, medical devices, and industrial machinery are all accessible at full foreign ownership. Perpres 49\/2021 further liberalized pharmaceuticals (both manufacturing and wholesale distribution) to 100%, up from a previous cap of 85%.<\/p>\n Also read:<\/strong> Indonesia Manufacturing Industry: Outlook and Opportunities<\/a><\/p>\n Independent power producers can now be 100% foreign-owned. Previously, plants generating up to 10 megawatts were capped at 49%. Solar, wind, geothermal, and other renewable energy projects are open to full foreign ownership. The government has set a target of 23% renewable energy in Indonesia’s national energy mix by 2025, which drives consistent policy support for foreign capital in this area.<\/p>\n Internet service providers, fixed telecommunications networks, and mobile telco providers, all previously capped at 67%, are now 100% open under Perpres 10\/2021. Digital health platforms, cloud computing, software development, data centers<\/a>, and IT consulting are also fully open. This sector gets strong government backing as part of Indonesia’s national digital transformation push.<\/p>\n E-commerce businesses<\/a> can be 100% foreign-owned. The previous IDR 100 billion capital injection requirement (roughly USD 7 million) has been abolished. The standard IDR 10 billion total investment threshold now applies, with IDR 2.5 billion paid-up under BKPM Regulation No. 5\/2025. That makes entering Indonesia’s e-commerce market considerably more accessible for mid-sized foreign operators.<\/p>\n The wholesale and distribution sector is fully open. The history here is worth knowing: in 2014, foreign investment was capped at 33%. By 2016, that rose to 67%. The Omnibus Law took it to 100%. For foreign companies running regional distribution networks, this removes a structural limitation that previously required local partners.<\/p>\n The agricultural sector<\/a>, covering cultivation of crops, livestock, and aquaculture, is now 100% open to foreign investment, up from 30% under the previous regime. The plantation sector, including palm oil seed plantations, is also fully open, up from a previous maximum of 95%. These are significant shifts for foreign agribusiness operators looking at Indonesia’s land and production capacity.<\/p>\n Specialized medical clinics (nursing, rehabilitation, and dental services) are now open to 100% foreign ownership, up from 67%. Wholesale distribution of pharmaceutical raw materials and healthcare equipment is also fully open. That said, regular medical clinics and general hospitals remain 100% closed to foreign direct investment. This distinction is important and often misunderstood by first-time investors in the healthcare space.<\/p>\n Hotels rated two stars and above allow full foreign ownership. Eco-tourism operations, resort development, and international tour operators in designated tourism zones are also open. Domestic travel agencies and certain cultural tourism activities remain subject to MSME partnership requirements under Category 3. That is a separate consideration for investors who want to bundle hospitality with ground operations.<\/p>\n Knowing what is off-limits matters as much as knowing what is open. Indonesia keeps a limited but firm list of fully closed sectors, plus a wider set of activities with partial restrictions.<\/p>\n Six business fields are off-limits entirely under the Positive Investment List: cultivation and processing of controlled narcotics (Type 1 substances); gambling and casino operations; collection of protected wildlife species and coral; manufacturing of chemical weapons; production of ozone-depleting substances; and strategic public defense activities reserved for the central government.<\/p>\n Beyond the six closed categories, certain activities are reserved for Indonesian nationals or government entities. These include public administration and defense functions, certain land and spatial administration activities, marine salvage operations, and specific broadcasting segments. Regular medical clinics and general hospitals, as opposed to specialized clinics, also remain closed to FDI under current regulations.<\/p>\n This is where many foreign investors trip up. The Positive Investment List does not operate at the level of broad industry names. It operates at the KBLI level (Klasifikasi Baku Lapangan Usaha Indonesia)<\/a>, Indonesia’s five-digit standard business activity classification.<\/p>\n Two businesses in the same broad sector can have completely different ownership limits depending on their specific KBLI code. A digital health analytics company and a hospital admissions platform both sit in “healthcare technology” in plain language. But their KBLIs may carry different ownership caps, different risk classifications, and different licensing requirements.<\/p>\n The KBLI code selected during registration determines the business risk level under OSS-RBA (low, medium-low, medium-high, or high risk), which in turn determines what approvals are needed before operations can begin. Changing a KBLI code after incorporation requires amending the deed of establishment and updating OSS data, which adds time and legal cost. Getting the KBLI right from the start is not optional.<\/p>\n Foreign ownership limitations under the standard Positive Investment List may not apply in Indonesia’s Special Economic Zones<\/a>. Each SEZ (Batam, Gresik, Kendal, Batang, Mandalika, and others) has its own regulatory framework governing what is permitted and at what ownership percentage. Investors operating through a PT PMA inside an SEZ can often access more favorable conditions than those outside.<\/p>\n SEZs also offer substantial fiscal benefits: tax holidays, customs duty exemptions, infrastructure access, and in some cases simplified environmental approvals. Investors in priority sectors who locate in SEZs can stack these location-based incentives on top of the sector-specific incentives available under the Positive Investment List.<\/p>\n Additionally, indirect investments through Indonesia’s stock exchange (IDX) and investments covered by bilateral investment treaties between Indonesia and the investor’s home country may operate under different ownership conditions than standard PT PMA structures.<\/p>\n The PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the only legal structure that lets foreign individuals or corporations hold equity directly and operate commercially in Indonesia. Knowing what a PT PMA is and how it works<\/a> is the starting point for any foreign investor.<\/p>\n Total investment plan: minimum IDR 10 billion per KBLI code per project location, excluding land and buildings. This is what you commit to in your deed of establishment and OSS data.<\/p>\n Paid-up capital: minimum IDR 2.5 billion, deposited into the company’s corporate bank account. This is subject to the 12-month lock-up rule: it cannot be withdrawn during that window unless used for asset purchases, building construction, or documented operational costs.<\/p>\n Minimum shareholders: two. This applies even when a single foreign entity holds 100% economic interest. The shareholding structure must include at least two legal parties, whether individuals, corporations, or a combination.<\/p>\n Every PT PMA needs at least one Director and one Commissioner. Both positions can be held by foreign nationals, though certain regulated sectors may require local nationals in specific roles. Each PT PMA must also declare its Ultimate Beneficial Owner (UBO) in the AHU Online portal under Presidential Regulation No. 13\/2018 and Permenkumham 2\/2025.<\/p>\n The process begins with company name reservation and executing a bilingual deed of establishment before a licensed notary. The deed is submitted electronically to the Ministry of Law and Human Rights for legal entity ratification. After that, the company registers through OSS-RBA to obtain a NIB (Business Identification Number)<\/a> and the required business licenses based on KBLI risk classification. Tax registration and NPWP (Tax ID) issuance follow. The company then opens a corporate bank account and deposits paid-up capital. A standard PT PMA takes two to four weeks to establish in Jakarta and major commercial cities.<\/p>\n Quarterly LKPM (Investment Activity Reports) must be submitted through the OSS system to the Ministry of Investment. Zero capital realization for four consecutive quarters triggers automatic administrative sanctions. Monthly tax reports are also required from the start, even if the company has not yet generated taxable revenue.<\/p>\n Ready to register your PT PMA? Explore InvestinAsia’s PT PMA registration service<\/a> for step-by-step assistance matched to your sector and ownership structure.<\/p>\nHas the Positive Investment List Changed in 2025 or 2026?<\/h2>\n
Government Regulation No. 28 of 2025 on Risk-Based Business Licensing<\/h3>\n
BKPM Regulation No. 5 of 2025<\/h3>\n
The Four Categories of Indonesia’s Positive Investment List<\/h2>\n
Category 1: Priority Sectors<\/h3>\n
Category 2: Business Fields with Specific Requirements<\/h3>\n
Category 3: Business Fields Requiring MSME Partnership<\/h3>\n
Category 4: Business Fields Fully Open to Foreign Investment<\/h3>\n
Which Sectors Allow 100% Foreign Ownership in Indonesia?<\/h2>\n
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Manufacturing<\/h3>\n
Energy and Renewable Energy<\/h3>\n
Telecommunications and Digital Technology<\/h3>\n
E-Commerce<\/h3>\n
Wholesale and Distribution<\/h3>\n
Agriculture and Plantation<\/h3>\n
Healthcare (Specialized Clinics)<\/h3>\n
Tourism and Hospitality<\/h3>\n
Which Sectors Are Closed or Restricted to Foreign Investors?<\/h2>\n
Sectors Completely Closed to Foreign Investment<\/h3>\n
Sectors Reserved for Domestic Investors<\/h3>\n
KBLI Codes: Why the Five-Digit Number Matters More Than the Industry Label<\/h2>\n
Special Economic Zones: Different Rules in Designated Areas<\/h2>\n
Setting Up a PT PMA: What the Process Looks Like in 2026<\/h2>\n
Capital Requirements Under BKPM Reg. 5\/2025<\/h3>\n
Corporate Structure<\/h3>\n
Registration Steps<\/h3>\n
Reporting Obligations<\/h3>\n