If you want to know how to invest in Indonesia as a foreigner, the answer for anyone building or acquiring a business is a single vehicle: the PT PMA, a foreign-invested limited liability company. Setting one up runs through ten steps, from checking that your business field is open to filing your first investment report. The company itself usually takes weeks; the site, the environmental approval and the sector licence take months, and they can run in parallel.

There are other ways to put money into Indonesia. Listed shares and bonds can be bought through a licensed local securities company, and land is a separate subject, covered in our guide to whether foreigners can invest in Indonesia and hold industrial land. This guide is about direct investment: the steps, the rules in force in 2026, and where first-time investors lose time.

Last updated: 22 October 2026

How to Invest in Indonesia as a Foreigner: The Ten Steps

The sequence below is the one a foreign manufacturer follows in practice. Steps 1 to 8 create a licensed company; steps 9 and 10 keep it staffed and compliant. Site work runs alongside steps 7 and 8.

Step 1: Check the Positive Investment List for Your KBLI

Every business activity in Indonesia carries a five-digit KBLI code, and that code decides whether foreigners may own the company, how much of it, and how heavily the activity is licensed. Start here, because everything downstream is keyed to it.

Presidential Regulation No. 10 of 2021 on investment business fields, as amended by Presidential Regulation No. 49 of 2021, replaced the old negative list with a positive one. It sorts activities into priority fields that qualify for incentives, fields reserved for or requiring partnership with cooperatives and small enterprises, fields open with conditions such as an ownership cap or a partnership requirement, and everything else, which is open to 100% foreign ownership. Most industrial manufacturing sits in the open or priority categories.

List every KBLI you will actually operate, not only the main one: a refinery that also stores product for third parties or trades it is in more than one code. Then check each code against the sector’s own rules, since some ministries add conditions the list does not show. Our guide to doing business in Indonesia covers where those sector rules bite.

Step 2: Set the Investment Plan and Capital

Indonesia sets a floor on the size of a foreign-invested company, and the numbers changed in 2025. Under Article 26 of the Ministry of Investment and Downstreaming/BKPM Regulation No. 5 of 2025, a PT PMA must plan total investment of more than Rp10 billion, excluding land and buildings, for each five-digit KBLI code at each project location. Issued and paid-up capital must be at least Rp2.5 billion per company, down from the Rp10 billion the 2021 regulation required, and the capital must stay in the company for twelve months after it is placed, declared through OSS.

Read the two numbers separately. The Rp10 billion is a commitment to realise capital expenditure over time, and it multiplies: two codes at one site, or one code at two sites, doubles it. The Rp2.5 billion is cash the shareholders actually pay into the company’s account. A plant with three KBLI codes at one location therefore plans more than Rp30 billion of investment but can start with Rp2.5 billion paid up.

Write the figures once and use them everywhere. The capital in the deed, the Ministry of Law record and the OSS investment plan must match; a mismatch found at NIB stage sends you back to the notary.

If you are sizing a plant for North Sumatra and want to test the plan against a real plot, book an investor call and our investment team will bring current land availability and indicative terms.

Step 3: Structure the Company

A PT PMA is an ordinary Indonesian limited liability company that happens to have foreign shareholders, and it needs the organs any PT needs.

• Two shareholders at minimum. They can be foreign individuals, foreign companies, Indonesian individuals or Indonesian companies, in any mix the KBLI allows. A single-shareholder company is not available to foreign investors.
• One director and one commissioner at minimum. Either may be foreign. A foreign director who lives in Indonesia needs a stay permit, which is step 9.
• A registered domicile. The company needs an Indonesian address at the time of the deed, which is usually an office, since the plant does not yet exist.
• A name the Ministry of Law will accept. A PT PMA may use a foreign-language name, and the name must be unique in the register, so reserve it before the deed is drafted.

Foreign corporate shareholders need their articles of association, register extract and board resolution legalised for use in Indonesia, plus a passport copy for each individual shareholder and director. Gathering these takes longer than most first-time investors expect, so start at step 1 rather than step 4.

One structure to avoid: an Indonesian nominee holding shares on a foreigner’s behalf to get around an ownership cap. Indonesia’s Investment Law declares such arrangements void, and they leave the foreign investor with no enforceable claim to the company.

Steps 4 to 6: Deed, Ministry of Law Approval and Tax Number

The company comes into existence through three formalities a good notary runs as one package.

Step 4, the deed. An Indonesian notary drafts the deed of establishment in Indonesian, with the articles of association, the shareholding, the capital and the company organs. Shareholders who cannot attend sign through a power of attorney.

Step 5, legal entity status. The notary files the deed with the Ministry of Law through the AHU system, and the ministerial decree confirming legal entity status usually follows within days. From that point the company exists and can sign.

Step 6, tax number and bank. The company registers for its tax number (NPWP) with the tax office, opens a bank account, and the shareholders pay in the Rp2.5 billion or more of capital from step 2. The bank’s confirmation of the deposit is the evidence OSS and later the tax office will ask for. Corporate income tax is levied at 22%, and a company that exceeds the small-business turnover threshold registers as a VAT collector as well.

Steps 7 and 8: NIB Through OSS and the Risk-Based Licences

Business licensing in Indonesia runs through the OSS system on a risk basis, and the governing regulation changed in June 2025. Government Regulation No. 28 of 2025 on risk-based business licensing replaced Government Regulation No. 5 of 2021 and is now the instrument every licence refers to.

Step 7, the NIB. The business identification number is issued through OSS once the company’s legal entity data, capital and KBLI codes are entered. It is the company’s registration for every later permit and doubles as its importer identification, which a manufacturer importing machinery will use before the plant is built.

Step 8, the licence for your risk tier. OSS assigns each KBLI code one of four risk levels, and the level decides what you need beyond the NIB.

Most manufacturing falls in the medium-high or high tier, so plan for verification rather than self-declaration. Two basic requirements sit underneath every tier: a spatial conformity approval (KKPR) for the site, and an environmental approval, which for a larger plant means an AMDAL or UKL-UPL rather than the simple undertaking. Both are tied to a specific parcel of land, which is why the site question below cannot wait until the company is licensed.

Step 9: Work Permits for Foreign Staff

Foreign staff can only work in Indonesia under an approved manpower plan, and the rules sit in Government Regulation No. 34 of 2021 on the use of foreign workers. The plan, the RPTKA, names each position, its holder and its duration, and its approval by the Ministry of Manpower is the basis for the work visa and stay permit.

What the regulation requires of the employer:

• Positions, not people. A foreign worker is employed for a specific position that needs their competence, and the regulation closes personnel and human resources roles to foreigners.
• A counterpart and a training plan. The company appoints an Indonesian counterpart for technology and skills transfer, trains that counterpart to the foreign worker’s level, and repatriates the worker when the contract ends.
• The compensation fund. For each foreign worker the employer pays the DKP-TKA, currently US$100 a month, in advance for the permit period. The proceeds fund Indonesian workforce training.
• Exemptions. Directors and commissioners who are also shareholders are exempt from the RPTKA requirement, as are a few diplomatic and emergency categories.

That exemption is why many founders enter on the investor stay permit rather than a working one. It is tied to a minimum personal shareholding in the PT PMA, which immigration practice in 2026 puts at Rp10 billion in the individual’s own name, well above the company’s paid-up minimum. From RPTKA approval to a stay permit in hand, allow four to ten weeks.

Step 10: LKPM and the Reporting That Keeps the Licence Alive

Licensing does not end when the plant opens. Every foreign-invested company files an investment activity report, the LKPM, through OSS, and the schedule is set by the same BKPM regulation that sets the capital rules.

A PT PMA is a medium or large enterprise by definition, so it reports quarterly: by 15 April for January to March, 15 July for April to June, 15 October for July to September, and 15 January for the final quarter. Only micro enterprises are exempt. The Hukumonline summary of the LKPM obligation sets out the escalation: three written warnings, then temporary suspension, administrative fines and revocation of the licence, triggered once a company misses two consecutive periods or shows no investment progress across four.

The report is where the Rp10 billion commitment from step 2 is tested. It records realised capital expenditure against the plan, so a project that stalls on land or environmental approval shows up in the ministry’s data within a quarter.

Where the Site Fits in the Sequence

Two of the requirements above are tied to land rather than to the company: the spatial conformity approval and the environmental approval. Indonesia’s Industry Law also requires industrial companies to locate inside an industrial estate, with limited exceptions, so for a manufacturer the site decision is part of the licensing path, not a separate real-estate exercise. Our due diligence checklist for an industrial estate in Indonesia lists the fourteen questions to settle before committing to a plot.

SIIPE (Sumalacca Integrated Industrial and Port Estate) is a planned 5,600-hectare integrated industrial estate, deep seaport and township in Medan Belawan, North Sumatra. Around 840 hectares is acquired and the remaining 4,760 hectares still has to be acquired or reclaimed. The current development phase covers 3,000 hectares: 1,800 ha industrial estate, 400 ha deep seaport and 800 ha residential township. The site is 4.7 km from Belawan Port, about 10 minutes by road.

On licensing, we are precise about what an estate can and cannot do. Our one-stop licensing and estate management services cover the estate-level permits, the site documents a tenant’s KKPR and environmental approval depend on, and coordination with the provincial investment office. They do not replace the tenant’s own corporate licensing, and they confer no incentives: SIIPE does not hold special economic zone or free trade zone status, and the licence is in process. Estate utilities and the Sumalacca Dry & Liquid Bulk Port are planned, not operational. The national picture the plant will enter, by sector, source country and province, is in our foreign direct investment in Indonesia reference page.

Frequently Asked Questions

Can a foreigner start a business in Indonesia?

Yes. A foreigner invests through a PT PMA, a foreign-invested limited liability company, in any business field the Positive Investment List leaves open. Most manufacturing is open to 100% foreign ownership. Fields reserved for cooperatives and small enterprises, and fields with ownership caps or partnership conditions, are the exceptions to check first.

How much money do you need to invest in Indonesia as a foreigner?

Under BKPM Regulation No. 5 of 2025, a PT PMA must plan more than Rp10 billion of investment, excluding land and buildings, per five-digit KBLI code per project location. Paid-up capital must be at least Rp2.5 billion per company and stay in the company for twelve months after it is placed.

How long does it take to set up a PT PMA?

The company itself usually takes several weeks: about a week for the deed, days for Ministry of Law approval, one to three weeks for the tax number and bank account, and the NIB the same day the data is complete. Verified licences, work permits, land and environmental approval add weeks to months and run in parallel.

Do I need an Indonesian partner to invest in Indonesia?

Not in an open business field. A local partner is required only where the Positive Investment List imposes an ownership cap or a partnership condition for your KBLI code. Using an Indonesian nominee to hold shares on a foreigner’s behalf is prohibited under the Investment Law and leaves the foreign investor without an enforceable claim.

Can a foreigner be the director of a PT PMA?

Yes. A foreign director needs a stay permit, and one who is also a shareholder is exempt from the RPTKA manpower plan that other foreign staff require. Foreign nationals may not hold positions managing personnel or human resources, and each foreign employee needs an Indonesian counterpart and a training plan.

Talk to SIIPE’s Investment Team

If you are working through these ten steps for a plant in Sumatra, the site questions in steps 7 and 8 are the ones we can answer directly. SIIPE is a planned 5,600-hectare estate in Medan Belawan with a current 3,000-hectare development phase, around 840 hectares acquired, and a site 4.7 km from Belawan Port. Its port and utilities are planned rather than operational, and we will say so in every meeting.

Our investment team can walk you through plot options by sector, the status of the estate’s own permits, and how a plot’s spatial and environmental approvals would sequence with your company formation. Book an investor call through the enquiry form, or message us on WhatsApp at +62 811 860 980.