Understanding Foreign Ownership Under Indonesia’s Investment List
Foreign investors often ask whether they can own 100% of a PMA Company in Indonesia.
In principle, Presidential Regulation No. 10/2021—amended by Presidential Regulation No. 49/2021—opens most business sectors to both domestic and foreign investors.
However, Indonesia still applies specific classifications and limitations through the Investment List (Daftar Prioritas Investasi / DPI).
Because of this, investors must assess their intended business field (KBLI) before establishing a PMA company.
Three Categories of Business Classifications
The Investment List groups business sectors into three main categories:
1. Business Sectors Closed to Foreign Investment
Certain strategic or sensitive activities are fully reserved for the government.
2. Business Sectors Requiring Partnerships
Some business fields are allocated to cooperatives and MSMEs or require foreign–local partnership structures.
3. Business Sectors Open With Conditions
These sectors permit foreign ownership but may include caps, special licensing, or operational limitations.
Business sectors not included in the Investment List are generally interpreted as fully open to 100% foreign ownership.
When 100% Foreign Ownership Is Allowed
Most unrestricted sectors allow foreign investors to own up to 100% of a PMA Company.
This means a foreign shareholder may hold all company shares without needing an Indonesian partner.
However, investors should still verify their KBLI through the OSS system because certain ministries may impose sector-specific rules.
For example, the Ministry of Energy, Ministry of Communications, and OJK regulate ownership in their respective sectors.
Because of this, foreign investors should confirm their intended KBLI classification with BKPM before incorporation.
When Foreign Ownership Is Restricted
Although Indonesia has liberalized its investment framework, several activities remain partially or fully closed to foreign investors.
Under Presidential Regulation No. 49/2021, the following sectors are fully closed and reserved for the central government:
- Cultivation and industry involving Category I narcotics
- Gambling and casino operations
- Capture of species in Appendix I of the CITES Convention
- Extraction or use of coral (KBLI 03117)
- Chemical weapons manufacturing
- Production of ozone-depleting industrial chemicals
- Alcoholic and malt beverage manufacturing
- Defense and security activities considered strategic
Other sectors remain open but with ownership caps, typically set at 49%, 67%, or 95% depending on the industry.
Sectors Requiring Partnerships With Local MSMEs
Some business fields require foreign investors to partner with Indonesian cooperatives or MSMEs.
The partnership model supports technology transfer, local participation, and equitable economic growth.
Requirements depend on individual ministerial regulations, which define the allowed ownership ratios and partnership arrangements.
Ensuring Compliance With BKPM
Given the complexity of Indonesia’s investment classifications, investors should consult BKPM or a licensed legal consultant.
BKPM can verify the following:
- Whether the KBLI is open, partially open, or restricted
- The maximum foreign shareholding percentage
- Any additional licensing or sectoral obligations
This early verification helps prevent delays in incorporation and ensures compliance before investment begins.
Conclusion
Indonesia allows 100% foreign ownership for business fields not listed as restricted or closed in the Investment List.
Because rules vary between sectors, foreign investors must review their KBLI classification, understand any ownership limitations, and confirm requirements through BKPM.
By following these steps, foreign investors can establish and operate a PMA Company legally, confidently, and in full alignment with Indonesia’s investment policies.