Frequently Asked Questions: #restrictedsectors

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  

In most business fields, yes. Since the 2021 investment reforms, Indonesia’s default position is that business fields are open to 100% foreign ownership unless a regulation says otherwise. The exceptions come in layers:

• Closed fields — a short list closed to all private investment (foreign and domestic alike)
• Fields reserved or partnered — activities reserved for cooperatives and small/medium enterprises, or requiring partnership with them
• Capped fields — sectors where a maximum foreign shareholding applies (for example, certain postal, broadcasting, and transport activities)
• Conditional fields — open, but with special licensing or location conditions

The controlling instrument is the investment list (BUPM, under Presidential Regulation 10/2021 as amended) read together with the KBLI business classification. The practical method is always the same: identify the exact 5-digit KBLI code for what you actually intend to do, then check its treatment. Two similar-sounding activities can have different ownership rules.

Two current cautions:

• Regional overlays exist. Bali closed OSS licensing access for new PMA companies in 18 KBLI codes in May 2026 — fields that remain 100% open elsewhere in Indonesia. National openness does not guarantee provincial welcome.
• Any foreign share makes it a PMA. Even 1% foreign ownership makes the company a PMA, bringing the full capital requirements with it. There is no “mostly local” discount.

Okusi Associates checks the KBLI treatment for every proposed activity before establishment — see PT.PMA for the establishment service.

#foreignOwnershipRestrictions   #PMAcompany   #businessSectors   #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