Starting a Business · Indonesia
How to start a business in Indonesia as a foreigner (2026)
Indonesia shaded by its starting a business status
Starting a business in Indonesia as a foreigner: moderate.
FrameworkLaw No. 25/2007 on Capital Investment and Law No. 6/2023 (Job Creation) implemented via Presidential Regulation 10/2021 (Positive Investment List, as amended by Perpres 49/2021) and BKPM Regulation No. 5 of 2025; business registration is handled by BKPM through the risk-based Online Single Submission system (OSS-RBA) at oss.go.id.
Indonesia allows foreigners to fully own a local limited-liability company (PT PMA) in most sectors under the Positive Investment List, and the OSS-RBA portal has streamlined licensing since 2021. However, setup remains moderately complex for foreigners: a notarized deed with at least two shareholders, one director and one commissioner, a physical Indonesian address, and a paid-up capital of IDR 2.5 billion (~USD 150,000) are required, with an overall timeline typically of several weeks plus ongoing LKPM reporting.
Key points
The Positive Investment List (Perpres 10/2021 as amended by Perpres 49/2021) treats 100% foreign ownership as the default; only six activities are fully closed (Class-I narcotics, gambling/casinos, CITES-listed species harvesting, coral harvesting for commercial use, chemical weapons, and industrial ozone-depleting substances). A residual set of sectors has caps or partnership/local-content conditions.
Foreign investors incorporate a Perseroan Terbatas Penanaman Modal Asing (PT PMA) — a limited-liability company with foreign shareholding. It requires at least two shareholders, one director, one commissioner, a notarized Deed of Incorporation ratified by the Ministry of Law, and a registered Indonesian business address.
Under BKPM Regulation No. 5 of 2025, the paid-up capital threshold was lowered from IDR 10 billion to IDR 2.5 billion (~USD 150,000), while the total investment plan per KBLI business code must still reach IDR 10 billion (excluding land and buildings).
The core sequence is: (1) reserve company name and sign Deed of Incorporation before a notary; (2) obtain Ministry of Law ratification; (3) register on oss.go.id (passport for foreign shareholders), input KBLI codes and investment plan; (4) receive the Business Identification Number (NIB); (5) obtain any risk-based sectoral/operational licenses for medium- or high-risk KBLIs; (6) register for tax (NPWP) and social security (BPJS).
End-to-end incorporation of a PT PMA usually takes about 4–6 weeks. Low-risk KBLIs get an NIB almost immediately; medium-risk activities require one to two weeks of verification; high-risk activities can take 30–60 days depending on ministerial technical review.
Every PT PMA must file quarterly Investment Activity Reports (LKPM) to BKPM documenting realisation of the investment plan, and maintain the mandatory physical address (virtual offices are restricted in some regions, e.g., Bali from May 2026). Additional licenses may apply depending on the KBLI risk classification.
Timeline - major decisions & events
Decision No. 168/PUU-XXI/2023 partially struck down and reinterpreted 21 labor articles of the Job Creation Law and ordered Parliament to enact a standalone manpower law within two years, signalling continued legal instability around the omnibus framework that underpins business licensing.
Herbert Smith Freehills Kramer ↗Parliament enacted Law 6/2023, ratifying Perppu 2/2022 and permanently embedding the omnibus reforms that simplified business licensing across 77 sectoral laws, curing the procedural defect the Constitutional Court had identified in 2021.
JDIH BPK RI ↗President Joko Widodo used emergency legislative powers to issue Government Regulation in Lieu of Law (Perppu) No. 2 of 2022 on Job Creation, restoring the omnibus business-licensing reforms after the 2021 ruling barred new implementing regulations.
Jakarta Globe ↗Decision No. 91/PUU-XVIII/2020 found the 2020 Job Creation Law procedurally defective and gave lawmakers two years to fix it, while barring issuance of new implementing regulations, the first time a law was voided on procedural grounds.
Hogan Lovells ↗Government Regulation No. 5 of 2021 introduced the risk-based licensing system (low, medium-low, medium-high, high risk), under which low-risk businesses need only a Business Identification Number (NIB), replacing PP 24/2018 and overhauling how firms are licensed.
JDIH BPK RI ↗Presidential Regulation 10/2021 replaced the old Negative List with a 'positive list', making sectors 100% open to foreign investment by default and liberalising telecoms, transport, energy, distribution and construction, a major shift for foreign-owned startups (PT PMA).
UNCTAD ↗Government Regulation No. 8 of 2021 implemented the omnibus rule allowing micro and small businesses to form a limited liability company with a single founder and no fixed minimum capital, dramatically lowering the barrier to incorporating.
Lexology ↗President Widodo signed the sweeping Job Creation Law, which removed the IDR 50 million minimum capital for PTs, mandated risk-based licensing and centralised permits into OSS, fundamentally reshaping how businesses are started in Indonesia.
UNEP Law & Environment Assistance Platform ↗Government Regulation No. 24 of 2018 created Indonesia's first integrated electronic licensing portal and the Business Identification Number (NIB), centralising registrations that previously required visits to multiple ministries; OSS 1.0 went live 9 July 2018.
JDIH BPK RI ↗The foundational Company Law set the rules for incorporating a PT, notarial deed, two-or-more founders, Ministry of Law ratification, and (originally) a IDR 50 million minimum authorized capital, defining the corporate vehicle used by most businesses.
BKPM (English translation) ↗The Investment Law put domestic and foreign investors on equal footing, vested BKPM (now the Ministry of Investment) with oversight, and established that all sectors are open to foreign investment unless restricted by a presidential negative list.
BKPM ↗Indonesia - other topics
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