Are there investment facilities provided for foreign investors in Indonesia?

  • InCorp Editorial Team
  • 17 June 2025
  • 2 minutes reading time

A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.

  • Import facilities
    Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production.
  • Tax holiday
    The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status.
  • Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.

  • Tax allowance
    For companies in certain designated areas or regions, the government may provide the following tax concessions:
    Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
    Accelerated depreciation and/or amortisation deductions
    An extension of tax losses carried forward for a maximum of ten years
    A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
    The applicant eligible has to meet high-level-criteria for the above tax facilities:
    High investment value or for export purposes
    High manpower absorption
    High level of local content
  • Investment allowance
    The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project.
  • Super deduction
    This facility could be granted to certain businesses, such as:
    60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
    Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
    Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia.

Verified by

Ales Cina

Consulting Manager at InCorp Indonesia

Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights.

Frequently Asked Questions

    Shareholders of a PMA Company in Indonesia have various rights, including voting rights in general meetings, entitlement to dividends and liquidation proceeds, and access to information.
    They must approve significant matters through general meetings of shareholders with specified quorums, such as:

    • Amending articles of association
    • Changing share capital
    • Appointing or dismissing directors and commissioners
    • Approving major transactions, dividends, and financial statements
    • Company reorganization

    To provide you with accurate pricing information for our product registration services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, don’t hesitate to contact our consultants.

    According to Presidential Regulation No. 10/2021 and the amended version, all businesses are open for domestic and foreign investment with these limitations and classifications:

    • Eight businesses are closed to foreign investment and may be operated by the central government.
    • Designated business sectors or joint ventures with cooperatives (koperasi) and micro, small, and medium enterprises
    • Open businesses are subject to specific conditions, such as those that are exclusively available to 100% local investors, those with restricted foreign shareholding, and investments requiring special licenses

    Certain sectors are closed to foreign investment, including narcotics cultivation, gambling, and environmental conservation activities.

    The minimum number of shareholders to incorporate a PT is two

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The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.