An Introduction to Energy Market and How to Start This Business in Indonesia

An Introduction to Energy Market and How to Start This Business in Indonesia

  • InCorp Editorial Team
  • 4 July 2025
  • 3 minutes reading time

Indonesia is a country not only with an abundant workforce but also with rich resources for energy production, especially from renewable sources. Therefore, aside from the many business opportunities that the country has to offer, the Indonesia energy sector has also attracted a great number of foreign investors.

Furthermore, with the newly implemented licensing process, the Indonesian government aims to bring in even more foreigners to this sector.

As one of the largest countries in ASEAN, Indonesia consumes at least 40% of the region’s energy with its demand possibly to surge by 80% and the use of electricity would increase three times by 2030.

Indonesia has always been dependent on domestic coal and imported petroleum products for its energy production, but now renewable energy solutions have also been realised to cope with the spiking demand. According to the Indonesian government, the country is ready to use approximately 23% to 31% of renewable energy between 2025 and 2050.

infographic - energy business indonesia

Indonesia has the world’s greatest hydropower and geothermal potential, as well as ample resources for the ocean, solar, wind and bio-energy development. The country has abundant sunlight throughout the years and controls approximately 40% of the geothermal reserves in the world.

Thus, it is obvious why investments in energy sectors, especially in renewable energy, have grown rapidly in Indonesia. A study done by Reference Case showed that between 2015 and 2030, annual investment in renewable energy in Indonesia is expected to be about IDR 131.5 trillion (USD 9.4 billion), with the possibility to reach IDR 226.6 trillion (USD 16.2 billion).

This article will guide you on how you can establish an energy business in Indonesia.

Restrictions on Indonesia Energy Market

A foreign investor who starts a foreign-owned company for their energy business can only engage in the following types of business activities:

  • Energy generation
  • Energy distribution
  • Energy sales
  • Energy equipment installation
  • Energy sector consulting services provision
  • Energy equipment construction, operation, and maintenance
  • Energy research and development
  • Energy appliances sales

Incorporation Requirements & Procedures for Starting an Energy Business

As previously mentioned, the best form of legal entity for foreigners to start an energy business in Indonesia is a foreign limited liability company.

Since 2017, foreigners have been allowed to obtain the operational license for their energy business via a simplified procedure.

Here is the summary of the requirements and process:

  • Submit the investment plan to the Investment Coordinating Board in Indonesia
  • Depending on the type of project, a foreigner must deposit the minimum share capital for their foreign-owned company
  • Submit Articles of Association and other relevant documents for company registration
  • Register with trade register and the tax authorities in Indonesia
  • Register with other specialised associations depending on the business activities
  • Once the company is incorporated, a foreigner has to apply for a business permit for their company to offer energy supply services

How InCorp Indonesia can Assist

InCorp Indonesia is a dedicated business incorporation company in Indonesia. Ever since our inception, we have built a professional team of business setup experts all over the country to offer helpful advice and valuable market insights to clients from all over the world in different industries.

Over the years, InCorp Indonesia has become one of the leading providers of business services concerning business setup and consulting in Indonesia. We pride ourselves on effective and hassle-free business services across Indonesia.

Consult with InCorp Indonesia’s team today and we will be more than happy to provide you with some suggestions and walk you through the entire Indonesia energy business setup process.

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Verified by

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Frequently Asked Questions

    Establishing a PMA Company in Indonesia typically takes around two weeks after completing document requirements. Following establishment, additional steps such as obtaining licenses and registering for Tax ID vary based on business type. Last, some licensing processes may take time, necessitating thorough planning and preliminary assessments of the business plan for a smoother process.

    Yes and no. It is vital to choose a reliable distributor as they will register the product under their company and become the product license holder and the import license holder. Changing the local distributor is easier if you are satisfied with the cooperation.

    To provide you with accurate pricing information for our HR outsourcing 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, please get in touch with our consultants.

    In Indonesia, there are three company types that you can establish based on your business nature, requirements, and preferences.

    • Local Company (PT): 100% local ownership.
    • Foreign Company (PT PMA): can be entirely owned by foreigners; however, restrictions in business sectors apply
    • Representative Office: a branch of the parent company overseas whose purpose is to conduct marketing-related activities without generating income or profits

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Disclaimer

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.