Frequently Asked Questions: #foreign-investment-restrictions-indonesia-business-sectors

Foreign investment restrictions in Indonesia are governed by the Negative Investment List (DNI), which outlines sectors that are closed or have limitations for foreign ownership. Key points to consider:

• The DNI is periodically updated by the Indonesian government to reflect changes in investment policies.

• Sectors are categorized as:

  • Fully closed to foreign investment
  • Open with certain restrictions (e.g., maximum foreign ownership percentage)
  • Open with specific requirements (e.g., partnerships with local SMEs)
  • Fully open to foreign investment

• Some commonly restricted sectors include:

  • Media and broadcasting
  • Certain retail and distribution activities
  • Some transportation services
  • Specific agricultural products

• Restrictions can vary based on:

  • Percentage of allowed foreign ownership
  • Minimum capital requirements
  • Location (e.g., special economic zones may have different rules)
  • Specific licensing or partnership requirements

• It’s crucial to consult the most recent version of the DNI before planning any foreign investment in Indonesia.

• Some sectors may require a combination of foreign and local ownership, promoting partnerships with Indonesian entities.

• Certain strategic industries (e.g., defense, natural resources) often have more stringent restrictions or are entirely closed to foreign investment.

• The Indonesian Investment Coordinating Board (BKPM) can provide guidance on interpreting the DNI for specific business activities.

• Even in open sectors, there may be additional licensing or operational requirements for foreign-owned companies.

• The government occasionally introduces new policies or incentives to attract foreign investment in priority sectors, which may override some DNI restrictions.

Always consult with legal experts or investment advisors familiar with the latest Indonesian regulations to ensure compliance with current foreign investment restrictions.

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