Can a Foreigner Own a Business in Indonesia? (2026 Guide)

Indonesia has opened the majority of its business sectors to 100% foreign ownership — but the structure you choose before you register will determine whether everything that follows is straightforward or unnecessarily complicated.

This guide covers the entity types available to foreign founders, how Indonesia's Positive Investment List determines your ownership percentage, and what the capital requirements actually mean in practice. It focuses on private commercial operations. Non-profit structures, representative offices for market research, and sector-specific licences (banking, mining, telecoms) each have their own regulatory frameworks not covered here.

Indonesia's investment regulations change — verify all requirements with a licensed Indonesian legal advisor before making incorporation or structural decisions.

Foreigners can own and operate a business in Indonesia. Under Presidential Regulation 10/2021 (Indonesia's Positive Investment List), all business sectors are open to foreign investment by default unless specifically restricted or closed. This replaced the old Negative Investment List model.

There are three entity types available to foreign founders, each with different ownership rules and operational scope:

The Representative Office (Kantor Perwakilan) exists for market research, liaison work, and sourcing, not for operating a business.

A PT PMA is the right vehicle for most founders who want to operate commercially in Indonesia. It requires a minimum of two shareholders, one director (Direktur), and one commissioner (Komisaris). Solo founders can hold the majority or 100% of shares, but must appoint at least one additional person to fill the commissioner role. Neither the director nor the commissioner needs to be an Indonesian resident — both can be foreign nationals. The foreign shareholder itself can be either an individual or a foreign legal entity, such as an overseas holding company.

💡 If you don't yet have a holding entity, Hong Kong and Singapore are widely used options — both qualify under Indonesian investment law and have tax treaties with Indonesia.

Indonesia's Positive Investment List classifies every business activity by its KBLI code, Indonesia's standard business activity classification system. Your KBLI code determines whether foreign ownership is unrestricted, capped, or prohibited for your specific activity.

There are four categories:

• Open to 100% foreign investment — covers the majority of sectors, including most services, technology, wholesale trade, and manufacturing not listed elsewhere.
• Open with specific conditions — 37 business lines that require additional approvals, Indonesian partnerships, or sector-specific licences.
• Open to large enterprises, including foreigners, but requires partnerships with cooperatives or MSMEs — 106 business lines.
• Reserved for cooperatives and MSMEs — not open to foreign or large-enterprise investment. A small number of activities (primarily defence, intelligence, and government security functions) are fully closed.

Sectors with the most common foreign ownership caps include:

⚠️ Sector ownership percentages current as of April 2026. Verify your specific KBLI code against oss.go.id or current BKPM guidance before making any structural decisions, as caps are subject to amendment.

Since October 2025, BKPM Regulation No. 5 of 2025 sets the minimum paid-up capital for a new PT PMA at IDR 2.5 billion, equivalent to roughly USD 160,000 at current exchange rates. This replaced the previous requirement of IDR 10 billion paid-up, which made Indonesia one of the more expensive jurisdictions to enter as a foreign investor.

Separate from the paid-up capital is the total investment commitment: IDR 10 billion per KBLI business activity per project, excluding land and buildings. This is not capital you deposit upfront. It is the investment plan you declare to BKPM via the OSS system, representing the total amount you intend to invest over the life of the project.

One practical note on the paid-up capital: once deposited, it cannot be withdrawn for non-business purposes for at least 12 months, though it can be used for legitimate business needs such as asset acquisition and operational costs.

📌 For context: Hong Kong requires no minimum paid-up capital at all. Singapore requires SGD 1. The IDR 2.5 billion requirement still makes Indonesia one of the more capital-intensive markets in Asia for foreign entry. If you're weighing where to base your Asia operations, our guide to the best countries to start a business as a foreigner covers the comparison across jurisdictions.

A nominee shareholder arrangement (where an Indonesian citizen holds shares on your behalf through a side agreement) is not a safe workaround for foreign ownership restrictions in Indonesia.

Some advisers suggest this approach when founders want to avoid the capital requirements or access sectors that cap foreign ownership. The arrangement involves an Indonesian citizen holding shares as the registered owner while the foreign founder retains informal control through a separate agreement.

Do not do this.

Indonesia does not recognise trust law or the legal separation of beneficial and registered ownership. There is no legal mechanism for a foreign founder to enforce their rights against a nominee who decides to take full control. If the relationship breaks down, Indonesian courts will recognise the nominee as the legal shareholder, and the foreign founder has no remedy.

This is not a remote risk. It has happened to foreign founders in Indonesia, and the outcomes are uniformly bad. If your sector is restricted, the better paths are:

• Find a legitimate Indonesian co-investor
• Restructure around an open KBLI code
• Enter via a Representative Office until you can qualify for full PT PMA registration

⚠️ This reflects our understanding of Indonesian law as of April 2026. Verify the legal position with a licensed Indonesian lawyer before making any structural decision about nominee arrangements or beneficial ownership.

Once you've confirmed your structure, the registration process follows these steps in sequence:

1. Reserve your company name with the Ministry of Law and Human Rights.
2. Prepare and notarise the Deed of Establishment with a licensed Indonesian notary.
3. Register with the AHU (Administrasi Hukum Umum, Indonesia's legal entity registry under the Ministry of Law and Human Rights) to obtain your legal entity decree.
4. Obtain your NPWP (Tax Identification Number) from the Directorate General of Taxes.
5. Apply for your NIB (Business Identification Number) through the OSS (Online Single Submission) system, Indonesia's centralised investment portal.

We've covered the full PT PMA registration process, including each step, the documents required, and common delays, in our guide to how to open a company in Indonesia.

Once your Indonesian entity is active, you'll need a local corporate bank account to inject your paid-up capital. Our guide to opening a corporate bank account in Indonesia covers which banks accept foreign shareholder companies, what documents you'll need, and which accounts work for USD and IDR transactions.

Foreign ownership in Indonesia is more accessible than it used to be. The 2021 Positive Investment List opened the majority of sectors to 100% foreign ownership, and the 2025 capital reduction brought the entry threshold down significantly. If your sector is open and your structure is right, there is no legal barrier stopping you from owning and operating a business in Indonesia.

The decisions that matter most happen before you register: which entity type, who holds the shares, how the capital is structured, and whether your KBLI code actually covers what you intend to do. Getting these right from the start avoids the restructuring costs and regulatory friction that slow founders down later.

Statrys can help you set up the holding structure before you register your PT PMA. We handle Hong Kong and Singapore company registration fully online, and once your holding entity is active, our multi-currency business account supports IDR alongside 10 other currencies, so you can manage transfers between your holding company and your Indonesian entity from one place.