Starting a Business · Indonesia
Starting a business in Indonesia: foreigner's guide (2026)
Indonesia shaded by its starting a business status
Foreigners invest through a PT PMA (foreign-owned limited liability company), and since the 2021 Positive Investment List most sectors are open to up to 100% foreign ownership unless specifically restricted. Company registration is centralized online through the OSS Risk-Based Approach platform and can be completed in roughly 4–8 weeks, but Indonesia retains a high minimum investment value (above IDR 10 billion per business line/KBLI, excluding land and buildings) and sector-specific ownership caps, which add friction for smaller investors.
Key points
Under the Positive Investment List (Perpres 10/2021, amended by 49/2021, implementing the Omnibus Law), every business line is presumed open to 100% foreign investment unless it appears as restricted, conditional, reserved for MSMEs/cooperatives, or fully closed.
Foreign investors must operate through a PT PMA, which requires at least two shareholders, a director and a commissioner (directors/commissioners may be foreign), and a registered Indonesian address; representative offices are an alternative but cannot conduct commercial revenue-earning activity.
A PT PMA must commit a total investment value exceeding IDR 10 billion (roughly USD 600,000–650,000) per 5-digit KBLI business classification, excluding land and buildings — a threshold that effectively excludes small-scale foreign ventures.
Under BKPM (Ministry of Investment) Regulation No. 5 of 2025, issued October 2025, the minimum issued and paid-up capital for a PT PMA was reduced from IDR 10 billion to IDR 2.5 billion, while the >IDR 10 billion investment-value requirement per business line remains.
Incorporation runs through a notarized Deed of Establishment approved by the Ministry of Law and Human Rights, followed by obtaining the tax number (NPWP) and Business Identification Number (NIB) and risk-based licenses via the OSS-RBA platform (oss.go.id), governed by Government Regulation 24/2018.
A PT PMA can typically be registered in about 4–8 weeks once documents are in order; PT PMAs must then file quarterly investment realization reports (LKPM) to BKPM, with persistent non-filing risking NIB suspension.
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
Last verified 5/23/2026 · Orientation, not legal advice - verify against the primary sources linked above. Explore the full world map →