How to Open a Hospital in Indonesia

Regulations and Procedures for Establishing a Hospital Business in Indonesia

  • InCorp Editorial Team
  • 13 January 2025
  • 5 minutes reading time

As the backbone of the healthcare system, hospitals in Indonesia are at the center of efforts to improve public health. Recent government reforms and growing investments are helping to modernize the sector, making it more accessible and efficient.

Whether you’re a healthcare professional or an investor, understanding the hospital sector in Indonesia opens doors to unique opportunities. This article will explore its potential, challenges, and steps for involvement.

Why Invest in Indonesia’s Hospital Sector?

Thanks to the Omnibus Law, foreign investors can now own 100 percent of hospitals in Indonesia. This is a significant change from the previous limits, where non-ASEAN investors could only hold 67 percent and ASEAN investors 75 percent. This new policy makes the hospital sector more accessible to global players.

The law has also simplified starting a hospital with a risk-based system. Since hospitals are considered high-risk businesses, they require a license and a registration number (NIB). These approvals are granted after meeting certain conditions set by the government, making the process more transparent and efficient.

Specialized clinics are now fully open to foreign investors as well. However, basic clinics (pratama clinics) are reserved for local businesses, creating distinct opportunities for those focusing on advanced healthcare services.

Market Overview of Indonesia’s Hospital Sector

The hospital market in Indonesia is set to generate $20.95 billion and approximately $74.87 per person by 2024, showing significant growth from previous years.

This momentum is expected to continue, with an annual growth rate of 6.81% (CAGR 2024-2029), reaching a market volume of $29.12 billion by 2029. This reflects the average revenue tied to the population, highlighting increased healthcare spending nationwide.

Comparison with Global Markets

The United States leads the hospital sector globally, with a projected revenue of $1,501 billion in 2024. While Indonesia’s figures are smaller, its growth rate and expanding healthcare access make it a market with immense potential for investors.

Segmentation of Hospital Services

Indonesia’s hospital market is divided into three key categories:

  • Inpatient Care: Medical and surgical treatments requiring an overnight stay.
  • Outpatient Care: Treatments that do not require overnight admission.
  • Other Hospital Services: Specialized offerings include day-care, long-term care, and home-based care.

Additionally, there is a growing emphasis on specialized healthcare and expanding services to remote areas. This focus on innovation and accessibility positions Indonesia as a rising leader in the healthcare industry.

Investment Opportunities in the Hospital Sector

GR 47/2021 upholds the existing classification system, dividing hospitals into two main categories:

  • General Hospitals: Offer services for various medical conditions and diseases.
  • Specialist Hospitals: Focus on specific medical specialties or diseases.
How to Open a Hospital in Indonesia

Foreign-owned general hospitals must meet the standards of Class A or Class B, which involve providing at least 200 beds. Specialist hospitals owned by foreign investors must have at least 100 beds. Certain specialist facilities, such as dental and ENT hospitals, are exempt from these rules.

Room Allocation Standards in Indonesia

Private and public hospitals in Indonesia must follow the bed allocation standards outlined in the table below. This structured approach ensures that hospitals have enough resources for critical care, isolation during public health emergencies, and adequate coverage for National Health Insurance (BPJS) program members.

How to Open a Hospital in Indonesia

Ongoing and Upcoming Hospital Projects in Indonesia

Indonesia is seeing exciting growth in its healthcare infrastructure, with new hospitals being built nationwide. Below are some notable developments that showcase Indonesia’s commitment to expanding and modernizing its hospital infrastructure.

Bali International Hospital

This hospital, initially developed with support from the Indonesian Healthcare Corporation (IHC) and Mayo Clinic, will soon open. Featuring cutting-edge medical technology, it aims to position Bali as a leading destination for medical tourism.

Nusantara’s New Hospital

Medikaloka Hermina is developing a 100-bed facility focused on maternal and child health in Indonesia’s upcoming capital city.

Sepaku UPT Hospital in East Kalimantan

This hospital, which will be completed soon, will feature 550 rooms and is designed to attract healthcare professionals from across the region.

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Steps to Enter the Hospital Sector in Indonesia

The introduction of GR 47/2021 has placed several key responsibilities on hospitals in Indonesia to ensure better quality and accountability in healthcare services. Hospitals must now:

  • Provide clear and accurate information about their services.
  • Deliver safe, high-quality, and non-discriminatory healthcare.
  • Maintain comprehensive medical records.
  • Offer emergency care based on their capabilities.
  • Provide care for underprivileged and low-income patients.
  • Extend healthcare services during disasters, aligned with their capacity.
  • Implement an effective referral system for specialized care.
  • Inform patients of their rights and responsibilities transparently.
  • Develop and manage a system for accident and disaster response.
  • Follow hospital ethics and maintain professional standards.
  • Protect and support legal rights for hospital staff.
  • Comply with government health regulations.
  • Establish and enforce internal hospital policies.
  • Maintain a smoke-free environment within hospital premises.

Additional Supporting Services

Both general and specialist hospitals must provide various supporting services to enhance patient care. These services are delivered by medical and non-medical staff:

Medical ServicesNon-Medical Services
Laboratory servicesHospital management
Medical recordsInformation and communication
Blood servicesMaintenance of medical equipment
Nutrition servicesLaundry and cleaning
Centralized sterilizationCorpse handling

Start Investing in Indonesia’s Hospital Sector with InCorp

Managing these services while complying with government regulations can be complex. Hospitals must focus on their core healthcare delivery while ensuring the efficient management of these additional services.

InCorp can effectively assist hospitals in meeting these demands. We provide support for regulatory compliance and streamline operations, while also offering additional assistance with:

  • Product Registration: Ensuring all medical equipment and supplies meet Indonesia’s regulatory requirements.
  • Company Registration: Simplifying establishing your hospital or healthcare business in Indonesia.

Complete the form below and focus on providing quality care while leaving administrative and regulatory challenges to the professionals.

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.

Get in touch with us.

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Frequent Asked Questions

You can transfer the license as long as your current local distributor agrees to change the product license holder. The procedure will be different for each product category. We can only recommend you try to prevent these issues by setting cooperation with a trustworthy partner from the beginning

Before you can distribute your products in Indonesia, you will have to register your product with the BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health). Only an Indonesian legal entity can register the product. If you decide to distribute your product via a local distributor, they will register the product under their entity in Indonesia and become the product license holder. Cekindo can act as your local distributor and register the product under its name.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.