Home Blog Indonesia New Negative Investment List Opens 54 Sectors to Foreigners Business Setup | Company Registration | Indonesia | Legal Updates | Local Partner Distributor Indonesia New Negative Investment List Opens 54 Sectors to Foreigners InCorp Editorial Team 28 December 2018 4 minutes reading time Table of Contents Reasons for the Change? The Changes of 2018 Negative Investment List Final Note In order to boost foreign and domestic investments in Indonesia, the government of Indonesia is going to update the Negative Investment List (NIL), which was last amended in 2016. Reasons for the Change? The new list was announced in November 2018 as part of the 16th economic policy package by the Coordinating Ministry for Economic Affairs. This amended list is a gesture to many foreigners to make investments that will contribute to the reformative and consistent progress in the country. Another important goal is to decrease the current national deficit as foreign direct investments in Indonesia play a significant role. The account deficit of Indonesia has hit US$8.8 billion (3.7% GDP) as of the end of 2017. Also, foreign investments in particular sectors were much lower than expected. It is believed that the low awareness among foreign entrepreneurs was one of the major reasons for their poor development. These fields include market research services, and power plants (> 10 megawatts capacities), oil and natural gas exploration and exploitation, as well as the power grid construction in free trade zones. However, the official announcement of the reform caused disagreement among local entrepreneurs as Indonesians fear of the global corporations entering the market and ‘devastating’ its local businesses. Therefore, it is expected that the NIL will undergo several updates until releasing its final version. The Changes of 2018 Negative Investment List To further drive the restructuring of the market, the negative investment list will be shortened, especially in those sectors where investments have slowed down, and many industries will be further expanded. The revised list will open 54 business activities, and full foreign ownership is going to be permitted in 25 business activities from 8 different sectors. Noticeably, not all 54 fields are suitable for a foreign company (PT PMA) as it requires capital of IDR 10 billion. Industries Suitable for Full Ownership The 25 business activities from 8 different sectors that are proposed for full foreign ownership include industries that were previously open to foreigners, but the number of investors was low. These fields are related to trade, tourism communications, transportation and telecommunications mainly. The details are listed as follows (the bracket shows the current allowed foreign ownership): Oil and gas construction (75%) Ecotourism for areas of forestry (51%) Geothermal survey and drilling (95%) Oil and gas drilling (offshore) (75%) Geothermal facilities operation and maintenance (90%) High-voltage electrical installations testings (49%) Power plants (more than 10 megawatts capacities) (95%) Theatres and art galleries (67%) Polling services (70%) Land transportation (without specific tracks) (49%) Data communication (67%) Telecommunication networks and content services (fixed and mobile) (67%) Sea transportation of passengers (overseas and it excludes cabotage) (70% for Southeast Asians) Call centres and other telephone services (67%) Internet services for the public (67%) Pharmacy industry with more than US$6.8 million investment (85%) Job training (67%) Fumigation and pest control (67%) Acupuncture facilities (49%) Industries Used to be Closed to Foreigners Other specific fields that will open up to full ownership from its current closed status: Construction machinery leasing Other machinery leasings (textile, powerplant, etc.) Surveyor services Industries for Every Size of Company Good news for small and medium companies is that the following sectors are no more restricted based on the size of businesses: Fabric printing Lace knitting Tuber cleaning and stripping Industries with No Special Recommendations Previously requiring special recommendations, these sectors below will not need them anymore. They are: Cigarette industry Crumb rubber Operation of wood processing Saccharin, cyclamate or artificial sweeteners Medical equipment Banks Cell and tissue culture laboratories. Industries that Require No Local Partnerships The business sectors which are affected and will not require local partnerships include retail trade that is portal-based or internet-based (e-commerce). Final Note The Negative Investment List significantly influences the development of the Indonesian economy and the amount of foreign direct investment pouring into the country. Even though its final version has not been approved by the Indonesian president yet, investors should be aware of its latest development. Cekindo offers one-stop market entry solutions that assist global investors when setting up businesses in Indonesia. Contact us today, and our teams located in Jakarta, Semarang and Bali will get back to you within one working day. Read Full Bio Verified by Hotdo Nauli Senior Legal & Delivery Manager at InCorp Indonesia Hotdo heads the Legal and Delivery team at InCorp Indonesia, managing Product Registration, Legal Advisory, and Business Licensing. With over 8 years of experience, she focuses on compliance and integrity, ensuring all client operations align with Indonesian laws and regulatory standards, including contract reviews and sector-specific licenses. She is also a licensed advocate and a member of the Indonesian Advocates Association (PERADI). Frequently Asked Questions How much is the minimum fund required to establish a PT PMA business in Indonesia? The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location. Can a PMA company keep non-Rupiah bookkeeping and use a language other than Indonesian? For tax purposes in Indonesia, companies must maintain their books in Rupiah, using the Indonesian language, and store them within the country. Exceptions for using USD and English in bookkeeping require prior notification to the authorities and any use of languages other than Indonesian needs approval from the Ministry of Finance. Can an individual or a business organization be a shareholder in a PMA company, and is there a minimum number required? A limited liability corporation is required by Indonesian company law to have two or more shareholders, who may be either a legal entity or an individual. The foreign investor must find a second shareholder to own shares in the PMA firm for investments that are 100% open, which could be an affiliated party. Can investors own shares with preferential rights? Under Indonesian Company Law, shareholders can hold shares with various preferential rights, such as voting rights, nomination rights for board members, priority dividend or liquidation proceeds, and options for conversion or withdrawal after a set period. Get in touch with us. Lead Form Contact Full NameEmailPlease provide corporate email where possiblePhone NumberOffice SetupWhich city are you planning to expand into?JakartaSemarang/Central JavaBali/LombokBatam/SumateraSurabaya/East JavaOther ProvincesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Package (20% OFF)[SPECIAL PACKAGE] Product Registration + License Holder (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (25% OFF) + Office Space (Private Office 30% OFF)[SPECIAL PACKAGE] Company Registration + Investor KITAS (25% OFF)[SPECIAL PACKAGE] Accounting + Tax Services+ Annual Fintax Report (20% OFF)[SPECIAL PACKAGE] Payroll Services for Executive Role (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (20% OFF) + Office Service (25% OFF)[SPECIAL PACKAGE] Company Registration + Micro Finance Services (25% OFF)[SPECIAL PACKAGE] Property Assistance: Due Diligence + AJB Purchase/Lease Agreement (25% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesServices Company Registration Renting Virtual and Serviced Office Business and Import Licenses Corporate Recovery and Insolvency Closing of Company (Dissolution) Land and Property Ownership Shelf Company Local NomineeServices Accounting and Tax Reporting Audit and Review Transfer Pricing Compliance Tax RefundHuman Resource Sub Services Payroll Outsourcing Employer of Record Recruitment and HR Establishment Employment ServiceServices Business Visa Work Permit and KITAS Dependent Visa (Spouse and Family) OtherBusiness Visa Subservices Business Visa Visit Visa Visa ExtensionServices Medical Device Beauty (Skincare and Cosmetic) Food and Beverage Health Supplement Household Product Halal Certification TrademarkServices Legal Consultation Legal Agreement Service Due Diligence and Background Check Company Documents RevisionBusiness Advisory Business Advisory Services ESG Reporting & Advisory Internal Audit Risk ManagementMore Services Market Research and Analysis Local Distributor and Partner Bank AccountMessageSubmit What you’ll get A prompt response to your inquiry Knowledge for doing business from local experts Ongoing support for your business 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. More on Business Setup How to Network in a Coworking Space in Indonesia Read more Permanent Business License and Permit: What You Need to Know About It Read more Indonesia Marine and Fisheries: Tax Strategies for High-Value Investments Read more