Legal News Update
Contributors: Almaida Askandar, S.H., MBA, Nita Damayanti, S.H., and Clarissa Felicia Hidriani, S.H.
Published on 18 October 2026 by IABF Law Firm, Jakarta, Indonesia.
Indonesia FDI Update: Key Investment Thresholds, KBLI 2025 and Ongoing Compliance Requirements
I. Introduction
Indonesia’s foreign direct investment (“FDI”) framework is governed by Law No. 25 of 2007 on Investment (“Investment Law”), as amended by Law No. 6 of 2023 on the Enactment of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation into Law (“Job Creation Law”), and its implementing regulations. The key implementing regulations include:
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- Government Regulation 28 of 2025 on the Implementation of Risk-Based Business Licensing (“GR 28/2025”);
- Presidential Regulation 10 of 2021 on Investment Business Fields (Bidang Usaha Penanaman Modal), as amended by Presidential Regulation No. 49 of 2021 (“Positive Investment List”);
- Regulation of the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”) No. 5 of 2025 on Guidelines and Procedures for Implementing Risk-Based Business Licensing and Investment Facilities through an Electronically Integrated Business Licensing System (Online Single Submission or “OSS”) (“BKPM Regulation 5/2025”); and
- Statistics Indonesia (Badan Pusat Statistik) Regulation 7 of 2025 on the Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia or “KBLI”) (“KBLI 2025”).
This update focuses on the following key provisions: (i) the minimum investment value and minimum capital for foreign investment limited liability companies (Perseroan Terbatas Penanaman Modal Asing or “PT PMA”); (ii) business field restrictions under the Positive Investment List and the transition to KBLI 2025; and (iii) the ongoing obligations of PT PMA, namely investment activity reporting to BKPM, RPTKA (as defined below) approval for the employment of foreign workers, and the annual update of beneficial ownership information.
II. The Minimum Investment Value for PT PMA
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No. |
Relevant Terms |
| 1. | PT PMA is categorised as a large business and must have a total investment value of more than IDR 10 billion, excluding land and buildings, for each 5-digit KBLI code and each project location (“Minimum Investment Value”). Land and buildings are, however, included in the calculation for the following business activities: (a) property development and/or operation (development, sale and/or lease); (b) short-term and long-term accommodation services; and (c) agriculture, plantations, animal husbandry and/or aquaculture. For property activities, land and buildings are included only for entire buildings or integrated housing complexes, and not for individual property units. |
| 2. | Supporting activities that generate revenue must also meet the applicable minimum investment and capital requirements. Their KBLI codes must also be included in the company’s articles of association and relevant licensing documents. |
| 3. | Special calculation rules apply to the following business activities (in each case, a total investment of more than IDR 10 billion, excluding land and buildings):
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| 4. | Transitional provision: under Article 395 of BKPM Regulation 5/2025, PT PMA that (i) change the location of an activity covered by an issued and verified business licence, or (ii) extend risk-based business licensing issued before the Regulation took effect, remain subject to the capital and minimum investment requirements under their relevant valid existing licences. Expansion of the same licensed business activity remains subject to the capital requirements under the existing licence. Under Article 394, prior licensing provisions continue to apply to valid existing licences unless the new provisions are more favourable to the business actor. |
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III. Business Field Restrictions under the Positive Investment List and Transition to KBLI 2025
All business fields are open to investment, except those declared closed to investment or reserved for activities that can only be carried out by the Central Government. The Positive Investment List classifies business fields into: (a) priority business fields; (b) fields allocated to, or requiring partnership with, cooperatives and micro, small and medium enterprises; (c) fields subject to certain requirements; and (d) other fields open to investment. Foreign ownership limits apply only to certain business fields as specified in the Positive Investment List. Therefore, foreign investors should check the requirements for their intended business activities, rather than assume that every PT PMA is subject to foreign ownership limits.
KBLI 2025 replaces KBLI 2020. Pursuant to the Joint Circular Letter of the Minister of Investment and Downstreaming/Head of BKPM No. 4.S of 2026, the Minister of Law No. M.HH-1.HH.04.02 of 2026, and the Head of Statistics Indonesia No. 1 of 2026, dated 25 March 2026, on the Implementation of Adjustments to KBLI 2025 in Risk-Based Business Licensing (“Joint Circular”), existing business licences issued, verified or approved before the implementation of KBLI 2025 remain valid. Where an adjustment changes only the numerical KBLI code without altering the substance of the business activity, the OSS and Directorate General of General Legal Administration (Direktorat Jenderal Administrasi Hukum Umum or “AHU”) systems will adjust the code automatically. An amendment to the articles of association is required if a corporate action changes the company’s purposes, objectives or business activities. PT PMA should therefore review their KBLI codes to ensure consistency with their actual business activities, articles of association and business licensing records.
IV. Other Relevant Obligations for PT PMA
A. Reporting Obligation to BKPM
Under BKPM Regulation 5/2025, the Investment Activity Report (Laporan Kegiatan Penanaman Modal or “LKPM”) must be submitted for each project location and each business activity, both main and supporting. The LKPM must include, among others: investment realisation; workforce realisation; production realisation of goods and/or services; fulfilment of the business actor’s obligations and responsibilities; obstacles faced by the business actor; and fulfilment of basic requirements and business licensing (including licensing for supporting business activities). The LKPM submission deadlines for PT PMA are set out in the table below.
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No. |
Period of LKPM Submission |
| 1. | LKPM submission deadlines for medium and large businesses (including PT PMA):
a) 1st quarter report: no later than 15 April of the current year; b) 2nd quarter report: no later than 15 July of the current year; c) 3rd quarter report: no later than 15 October of the current year; and d) 4th quarter report: no later than 15 January of the following year. |
| 2. | LKPM reports for medium and large businesses consist of:
a) preparation-stage reports, for businesses that have not yet commenced operations and/or commercial transactions; and b) operational and/or commercial-stage reports, for businesses that are ready to commence or have commenced operations and/or commercial transactions. |
B. Foreign Worker Utilisation Plan (Rencana Penggunaan Tenaga Kerja Asing or “RPTKA”)
RPTKA approval is generally required for employers, including PT PMA, that employ foreign workers. The main regulations are Government Regulation No. 34 of 2021 on the Use of Foreign Workers and Minister of Manpower Regulation No. 8 of 2021 on the implementation of that Government Regulation.
Foreign workers must (i) have education relevant to the qualifications of the position to be held; (ii) possess relevant competencies or have at least five years of work experience relevant to the qualifications of such position; and (iii) transfer their expertise to designated Indonesian counterpart workers, subject to applicable exceptions.
RPTKA approval is not required for: (i) directors or commissioners with a certain level of share ownership, or shareholders who meet the applicable legal criteria; (ii) diplomatic and consular officers at foreign representative offices; and (iii) foreign workers needed for certain activities, namely production halted due to emergencies, vocational activities, technology-based start-ups, business visits, and research for a certain period. Each exemption is subject to its own conditions.
C. Obligation Related to Beneficial Owners
Under Minister of Law Regulation No. 49 of 2025 on the Requirements and Procedures for the Establishment, Amendment and Dissolution of Limited Liability Companies, an application for incorporation must be supported by the following beneficial ownership documents: (i) a power of attorney from the board of directors authorising the notary to submit beneficial ownership information; (ii) a statement from the board of directors identifying the beneficial owner; and (iii) a letter of consent from the beneficial owner. These supporting documents must be retained by the notary.
Minister of Law Regulation No. 2 of 2025 on the Verification and Supervision of Corporate Beneficial Owners requires companies to update their beneficial ownership information annually, maintain supporting documents and complete the beneficial ownership questionnaire electronically. Companies must also identify their beneficial owners by (i) identifying and verifying them, (ii) determining the beneficial owner, and (iii) submitting the relevant information to the Minister of Law.
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Disclaimer
This news update is prepared for general informational purposes only. The content does not constitute legal advice, a legal opinion, or counsel from IABF Law Firm. The information contained herein may not reflect the most current developments. Any quotation, distribution, or use of this information for any purpose is solely at the user’s own risk.
