Frequently Asked Questions: #foreignownershiprestrictions

The minimum capital requirements for a PMA (Penanaman Modal Asing) company in Indonesia are set by Ministry of Investment and Downstream Industry/BKPM Regulation No. 5 of 2025 (in force since October 2025):

• Total Investment Value: The minimum investment plan for a PMA company is more than IDR 10 billion (approximately USD 600,000) per 5-digit business classification (KBLI) per project location, excluding land and buildings.

• Issued and Paid-up Capital: The minimum issued and paid-up capital is IDR 2.5 billion per company — reduced from the IDR 10 billion that applied between 2021 and 2025.

• 12-Month Holding Requirement: The paid-up capital must be deposited into the company’s Indonesian bank account and remain there for at least 12 months after deposit.

• Joint Ventures: For joint ventures with Indonesian partners, the paid-up capital requirement applies to the company as a whole, with shares held in proportion to each party’s ownership percentage.

• Sector Exceptions: Some business activities calculate the investment value differently — for example, wholesale trade per 4-digit KBLI, and food and beverage services per 2-digit KBLI per location — and some sectors set higher thresholds. It’s essential to check the specific rules for your industry.

• Proof of Capital: Shareholders sign a capital statement, and the paid-up capital must be deposited in an Indonesian bank account under the company’s name.

• Gradual Investment: The IDR 10 billion investment plan is a commitment realized over time as the business develops — it does not need to be deposited up front. Realization is reported to the Ministry of Investment through periodic investment activity reports (LKPM).

• Capital Increases: Companies can start with the minimum required capital and increase it later as needed.

It’s important to note that these requirements may be subject to change, and certain business sectors or special economic zones might have different capital requirements. Always consult with a qualified professional or the relevant Indonesian authorities for the most up-to-date information regarding your specific business case.

#PMAcompany   #PMAminumumCapital   #minimumCapitalRequirements   #foreignOwnershipRestrictions   #investmentIndonesia  

Yes, but far fewer than in the past. Foreign ownership conditions are set by the Positive Investment List (Presidential Regulation No. 10/2021, as amended by No. 49/2021), which in 2021 replaced the old Negative Investment List (DNI). The default is now openness: all business sectors are open to 100% foreign ownership unless specifically listed otherwise. Here are the main points to understand:

• The Positive Investment List categorizes business sectors into four main groups:

  • Fully open sectors: The default — open to 100% foreign ownership
  • Conditionally open sectors: Open to foreign investment with certain conditions, such as ownership caps or special licensing (e.g. postal services, domestic air transport)
  • Sectors reserved for, or requiring partnership with, cooperatives and micro, small and medium enterprises (MSMEs)
  • Closed sectors: Not open to any investment

• The closed list is short, covering activities such as:

  • Gambling and casinos
  • Cultivation of class-I narcotics
  • Capture of protected species and coral extraction
  • Chemical weapons production
  • New alcoholic-beverage manufacturing

• Many sectors that were restricted under the old DNI are now fully open — for example, restaurants, bars, spas and travel agencies can now be 100% foreign-owned

• Your business activities are defined by KBLI codes selected during registration in the OSS (Online Single Submission) system, which checks compliance with the Positive Investment List automatically

• Even in fully open sectors, there may be additional regulations or licensing requirements that affect foreign investors

• The list is periodically updated by the Indonesian government, so it’s crucial to check the most recent version when planning your investment

• It’s highly recommended to consult with legal experts or investment advisors familiar with the current regulations before proceeding with your investment plans

• The full list and detailed explanations can be found via the OSS system and the Ministry of Investment and Downstream Industry (BKPM) website, or through authorized investment consultants

Always verify the current status of your intended business sector under the Positive Investment List before proceeding with PMA company establishment to ensure compliance with Indonesian foreign investment regulations.

#foreignOwnershipRestrictions   #NegativeInvestmentList   #investmentIndonesia   #PMAcompany   #restrictedSectors  

Foreign investment restrictions in Indonesia are governed by the Positive Investment List (Presidential Regulation No. 10/2021, as amended by No. 49/2021), which in 2021 replaced the old Negative Investment List (DNI). The default is now openness: all sectors are open to 100% foreign ownership unless specifically listed. Key points to consider:

• Sectors are categorized as:

  • Fully open to foreign investment (the default — most sectors)
  • Open with conditions (e.g., maximum foreign ownership percentage, special licenses)
  • Reserved for, or requiring partnership with, Indonesian cooperatives and MSMEs
  • Closed to investment entirely (a small list)

• Sectors closed to investment include:

  • Gambling and casinos
  • Cultivation of class-I narcotics
  • Capture of protected and endangered species, and coral extraction
  • Chemical weapons production
  • New investment in the alcoholic beverage manufacturing industry

• Conditions in the remaining restricted sectors can involve:

  • A maximum foreign ownership percentage (e.g., postal services, domestic air transport)
  • Partnership or reservation requirements protecting local MSMEs
  • Location-specific rules (special economic zones may have different treatment)
  • Additional sectoral licensing requirements

• Business activities are defined by 5-digit KBLI classification codes selected during registration in the OSS (Online Single Submission) system, which checks Positive Investment List compliance automatically.

• Several hundred priority sectors qualify for investment incentives such as tax holidays, tax allowances, and customs facilities.

• The Ministry of Investment and Downstream Industry (BKPM) provides guidance on interpreting the list for specific business activities.

• Even in fully open sectors, foreign-owned companies must meet PMA capital requirements (investment plan above IDR 10 billion per KBLI per location; paid-up capital of at least IDR 2.5 billion) and any risk-based licensing conditions.

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

#NegativeInvestmentList   #foreignOwnershipRestrictions   #investmentRestrictions   #FDIcompany   #restrictedSectors  

The key responsibilities of a Company Secretary in Indonesia include:

• Ensuring compliance with statutory and regulatory requirements
• Maintaining company records and statutory registers
• Organizing and attending board meetings and shareholder meetings
• Preparing meeting minutes and resolutions
• Liaising with government authorities and regulatory bodies
• Assisting with corporate governance matters
• Managing corporate communications
• Coordinating the preparation and filing of annual reports

Key differences from other countries:

• Indonesian language requirement: Most official documents and communications must be in Bahasa Indonesia
• Specific local regulations: Familiarity with Indonesian corporate law and regulations is crucial
• Dual language proficiency: Often need to work in both Indonesian and English
• Cultural understanding: Important to navigate Indonesian business culture and etiquette
• Government liaison: More frequent interaction with various government agencies
• Shareholder structure considerations: May need to manage complexities related to foreign ownership restrictions
• Regulatory updates: Must stay current with rapidly evolving Indonesian business regulations
• Corporate domicile services: May be involved in maintaining the company’s registered address
• Notary involvement: Coordinating with notaries for various corporate actions is more common

It’s important to note that while the core duties are similar, the specific legal and regulatory environment in Indonesia requires specialized knowledge and skills from a Company Secretary.

#corporateSecretarialServices   #corporateGovernance   #regulatoryCompliance   #businessEtiquette   #foreignOwnershipRestrictions