Introduction
The Indonesian Investment Coordinating Board (BKPM) has issued a new regulation — Head of BKPM Regulation No. 5 of 2025 (Perka BKPM 5/2025) — concerning Guidelines and Procedures for Risk-Based Business Licensing and Investment Facilities through the Online Single Submission (OSS) system.
This update marks an important change for foreign investors under the BKPM Regulation 5/2025 PMA capital Indonesia framework. The minimum paid-up capital for Foreign Investment Companies (PMA Companies) has been reduced to IDR 2.5 billion, while the minimum investment value remains above IDR 10 billion.
Reduction of Paid-Up Capital Requirement
Under Perka BKPM 5/2025, the minimum paid-up capital for establishing a PMA company has been reduced from IDR 10 billion to IDR 2.5 billion.
This adjustment expands investor accessibility, especially for small and medium-scale foreign investors, while maintaining transparency through Indonesia’s OSS-based risk framework.
Moreover, this reform aligns with the government’s commitment to simplify capital structuring and make Indonesia a more competitive investment destination in Southeast Asia.
The change demonstrates a balanced approach — easing entry barriers without compromising corporate accountability.
Minimum Investment Value Remains Unchanged
Although the paid-up capital requirement has been lowered, the minimum investment threshold remains above IDR 10 billion per business field (five-digit KBLI classification) per project location, excluding land and building value.
This means investors must still demonstrate strong financial capability to qualify as foreign investors. The purpose is to ensure that investments are directed toward productive, large-scale projects that contribute to long-term national growth.
Consequently, the BKPM Regulation 5/2025 PMA capital Indonesia policy promotes responsible investment while fostering sustainable economic development.
Rationale Behind the Amendment
The amendment under Perka BKPM 5/2025 reflects Indonesia’s strategic direction to:
- Attract a wider range of investors, including medium-sized enterprises;
- Encourage diversified investment across regions and industrial sectors;
- Simplify risk-based licensing procedures while maintaining quality standards; and
- Promote fair, transparent, and accountable OSS-based monitoring.
By lowering administrative entry barriers but maintaining real investment commitments, the government aims to boost new foreign investments and enhance business confidence in Indonesia’s regulatory system.
Implementation Through the OSS System
All licensing, capital verification, and reporting processes under BKPM Regulation 5/2025 PMA capital Indonesia are conducted through the Online Single Submission (OSS) platform.
Investors must provide the following information:
- A detailed capital structure showing at least IDR 2.5 billion paid-up capital;
- The relevant five-digit KBLI code for each business activity; and
- Supporting documentation for investment realization reports (LKPM).
The OSS system automatically evaluates the risk level of each business and verifies compliance with financial, licensing, and sectoral regulations. This digital oversight enhances both transparency and efficiency in Indonesia’s investment environment.
Implications for Foreign Investors
Following this regulation, investors should take note of the following key points:
- Paid-Up Capital: Minimum of IDR 2.5 billion required for incorporation;
- Investment Value: Must exceed IDR 10 billion per KBLI per project location;
- Reporting: All submissions must be processed through the OSS platform;
- Compliance: BKPM continues to monitor investment realization and corporate capital structures.
These requirements provide greater flexibility while maintaining robust oversight mechanisms to ensure compliance with Indonesian law.
For new entrants, this change presents an opportunity to enter the market more easily while still committing to meaningful investment value.
Conclusion
Through BKPM Regulation No. 5/2025, Indonesia officially lowers the minimum paid-up capital for PMA companies to IDR 2.5 billion while maintaining the minimum investment value of over IDR 10 billion per business field.
This update strengthens Indonesia’s position as a business-friendly yet well-regulated market, supporting sustainable and responsible foreign investment through the risk-based OSS licensing system.
Ultimately, the BKPM Regulation 5/2025 PMA capital Indonesia framework ensures that Indonesia remains competitive and transparent in attracting global investors — driving inclusive economic growth across multiple sectors.