The government has established a positive investment list (DPI) as stated in Presidential Regulation (PP) 10/ 2021 concerning the Investment Business Sector. This regulation comes into effect as of March 4, 2021. The goal is to encourage capital flows from domestic and foreign investors into the country. This new regulation replaced Presidential Regulation No. 44 of 2016 that has a long list of businesses that are either closed off entirely for foreign businesses or those that are open, with certain conditions, for investment, including a cap to the percentage of foreign ownership called “Negative List”.
PP 10/2021 is an implementation of Law Number 11 of 2020 concerning Job Creation (Job Creation Law)
Now, foreign company (PT PMA) is welcoming investors to establish a company with 100% of foreign ownership, except for the six closed sectors and business line with certain conditions. The closed business sectors are: Drug industry, casino/ gambling activities, catching certain fish species, utilizing coral from nature, chemical weapons manufacturing, chemical and ozone depleting substance industry. Some business lines are allocated for SME’s companies such as business line with simple technology, specialized process, and less capital
PP 10/2021 also regulates provisions and facilities for priority business fields. Priority business fields must meet the criteria such as having national strategic programs/projects, capital intensive, labor intensive, high technology, pioneer industry, export orientation, and/or orientation in research, development, and innovation activities. Furthermore, it is also stated that investors who invest in the priority business sector will be given fiscal incentives and/or non-fiscal incentives.
Foreign investors require to have a minimum investment and capital of IDR 10 billion excluding land and building, except the company is located in Special Economic Zone (Kawasan Ekonomi Khusus / KEK)
For more information related to Company establishment / Company Incorporation, Business Registration (OSS, BKPM , Tax ID ) and licensing in Indonesia please contact your Tricor representative.
