Legal & Contracting 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 The minimum paid-up capital may not be withdrawn for 12 months except to buy assets, construct buildings or fund operations.SIP Law Firm · checked 2026-10-19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

• Law 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition is enforced by the Business Competition Supervisory Commission (KPPU).

  Amended, including by Law 6 of 2023. Merger notification rules are in Government Regulation 57 of 2010 and KPPU Regulation 3 of 2023.DFDL · checked 2026-10-19

• Mergers, consolidations and share or asset acquisitions that meet asset or sales thresholds must be notified to KPPU within 30 working days after the transaction becomes legally effective.

  Thresholds (Indonesian assets and sales only): combined assets above IDR 2.5 trillion (IDR 20 trillion for banking) or combined sales above IDR 5 trillion; foreign-to-foreign deals need an Indonesian nexus for both parties. Late filing fines start at IDR 1 billion per day. Mandatory pre-merger notification had not been adopted as of September 2026.DFDL · checked 2026-10-19

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