Understanding Foreign Ownership in Indonesia
Indonesia has significantly liberalized its foreign investment rules with the implementation of the Omnibus Law and the new Positive Investment List (Presidential Regulation No. 10/2021). This reform opened hundreds of previously restricted sectors to 100% foreign ownership.
The previous "Negative Investment List" (DNI) has been replaced with a "Positive Investment List" that takes a more investor-friendly approach. Unless specifically restricted, sectors are now open to foreign investment.
Good news: Most business sectors in Indonesia now allow 100% foreign ownership, making it easier than ever to start a fully foreign-owned PT PMA.
The Positive Investment List Explained
The Positive Investment List (Daftar Positif Investasi) is the government regulation that defines:
- Which sectors are fully open to foreign investment (100% ownership)
- Sectors with foreign ownership limits (requiring Indonesian partners)
- Sectors reserved exclusively for Indonesian citizens/MSMEs
- Priority sectors eligible for special incentives
- Conditions and requirements for specific industries
Sector Categories by Ownership
100% Foreign Ownership Allowed
Most sectors now allow full foreign ownership
Partnership Required (JV)
Some sectors require Indonesian partner
Reserved for Indonesians
These sectors are closed to foreign investment
Important Restrictions
Nominee Arrangements Are Illegal
Using an Indonesian nominee to hold shares on behalf of a foreigner is illegal under Indonesian law. Such arrangements are void, and participants may face criminal penalties, loss of investment, and deportation. Always use legitimate ownership structures.
If your business sector has ownership restrictions, there are legal alternatives including genuine joint ventures with Indonesian partners, licensing arrangements, or restructuring your business activities to focus on sectors open to full foreign ownership.
How to Check Your Eligibility
Identify Your Business Activity
Determine your exact business activities using the KBLI (Indonesian Standard Classification of Business Fields) system.
Check the Positive Investment List
Review Presidential Regulation No. 10/2021 and subsequent updates to find your KBLI codes and their restrictions.
Verify Investment Requirements
Check if your sector has minimum investment thresholds or special licensing requirements.
Consult with Experts
Get professional advice to ensure accurate interpretation and identify the best structure for your business.
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Frequently Asked Questions
Yes, in most sectors foreigners can now own 100% of a PT PMA company. The 2021 reform of the Positive Investment List significantly liberalized foreign ownership rules, opening hundreds of previously restricted sectors to full foreign ownership.
The Positive Investment List (previously known as DNI - Daftar Negatif Investasi) is the official government regulation that defines which business sectors are open to foreign investment, any ownership limits, and conditions that apply. The latest version is Presidential Regulation No. 10/2021.
Some sectors still have restrictions, including: media & broadcasting, education (private schools may have limits), plantation, and certain transportation services. A few sectors remain completely closed to foreigners, such as gambling, weapons manufacturing, and small-scale traditional businesses.
No. Nominee arrangements where a foreigner uses an Indonesian name to hold shares are illegal in Indonesia. Such arrangements are void under law and can result in criminal penalties, loss of investment, and deportation.
You need to identify the KBLI code(s) for your business activities and check them against the current Positive Investment List. We recommend consulting with a professional to ensure accurate interpretation, as some activities may fall under multiple KBLI codes with different restrictions.
If your sector has foreign ownership limits, you will need to structure your PT PMA with Indonesian shareholders holding the required percentage. This can be done through genuine partnerships or working with investment partners. We can help you find legitimate structuring options.