Government & Regulatory Affairs in Indonesia

Essentials guide · Partly source-checked42% of statements checked against a source7 checked against an official source15 checked against a secondary sourceChecked 2026-10-198 held back until checked against an official source11 topics include AI-written statements, not source-checkedNot yet professionally reviewed

• Foreign direct investment in Indonesia must generally be made through a limited liability company (Perseroan Terbatas) established under Indonesian law, known as a PT PMA when it has foreign shareholders.

  Excludes portfolio investment through the stock exchange and certain representative offices.AI-written, not source-checked

• Business licensing runs through the OSS system under Government Regulation 28 of 2025 on risk-based business licensing, which replaced Government Regulation 5 of 2021; low and medium-low risk activities can start once a Business Identification Number (NIB) is issued, while medium-high and high risk activities need a permit or must fulfil commitments first.

  Applies to PT PMA companies and other business actors. Sector permits and standards certificates may be needed on top of the NIB.BP Lawyers · checked 2026-10-19

• Presidential Regulation 10 of 2021 on investment business fields, as amended by Presidential Regulation 49 of 2021, sets which business fields are open to investment, distinguishing priority fields, fields allocated to or in partnership with cooperatives and small businesses, fields subject to specific requirements, and other fields open to all investors.

  Fields closed under the Investment Law and activities reserved to the central government are excluded. Specific requirements can include foreign ownership limits. Sector laws such as banking, insurance, media and mining may impose their own limits.Audit Board of Indonesia (BPK) legal database · checked 2026-10-19

• Under Investment Ministry (BKPM) Regulation 5 of 2025, new PT PMA companies need minimum paid-up capital of IDR 2.5 billion, down from IDR 10 billion.

  The regulation was promulgated on 2 October 2025. The minimum paid-up capital may not be withdrawn for 12 months except to buy assets, construct buildings or fund operations.SIP Law Firm · checked 2026-10-19

• A PT PMA must have at least two shareholders and a two-tier board structure consisting of a board of directors and a board of commissioners.

  Single-shareholder companies introduced by the Job Creation Law are for Indonesian micro and small businesses, not foreign-owned companies.AI-written, not source-checked

• Indonesian companies must identify and report their beneficial owners to the Ministry of Law under Presidential Regulation 13 of 2018 on beneficial ownership.

  Applies to companies and other legal entities; banks also collect beneficial ownership data at onboarding.AI-written, not source-checked

• Under the Basic Agrarian Law, freehold title (Hak Milik) is reserved for Indonesian citizens; a PT PMA may hold land under derivative rights such as the right to build (HGB), right to cultivate (HGU) and right to use (Hak Pakai).

  Rights are granted for fixed terms and may be extended or renewed.AI-written, not source-checked

• Indonesia offers investment incentives including corporate tax holidays for pioneer industries, tax allowances for specified sectors and regions, and facilities in special economic zones (KEK).

  Eligibility depends on business classification, investment value and location.AI-written, not source-checked

Read the full guide: Entry, investment and company formation · Licensing, incentives and sector rules