Legal Updates

Indonesia's new Positive Investment List


The opening of all sectors for foreign investment unless otherwise regulated or implemented by the government.

On Monday, February 22, 2021, the Indonesian Government officially unveiled 45 new government regulations and 4 new Presidential Regulations as follow-up to the much-publicized passing of its Omnibus Law on Job Creation last October. 

The Omnibus Law, which was passed on October 5, 2020, is a massive revision of Indonesia’s business laws - often deemed to be obstructive towards foreign investments - aiming to improve the Ease of Doing Business in Indonesia and boost the national investment climate. The Omnibus law touches nearly all facets of doing business Indonesia, from Business Licensing to Land Procurement. 

Particularly significant is the issuance of Presidential Regulation No. 10/2021 on Business Investments, which was signed on February 2, 2021, and will become effective 30 days after its signing. Rather than a list of businesses that are closed to foreign investments, the regulation outlines that all business activities are now open for foreign investment, unless regulated otherwise or are activities that can only be implemented by the central government. 

The regulation further elaborates the categories of business open for foreign investment. The first category is Priority Business. In this category, fiscal and non-fiscal incentives are assigned for all investments that goes towards 245 business types. 

These 245 business types are further grouped as follows:  

  1. Nationally Strategic program 
  2. High Investment 
  3. High Productivity 
  4. High Tech 
  5. Pioneering Industry 
  6. Export Oriented and/or 
  7. Research, Development and innovation oriented. 

Businesses that adhere into the groups above are eligible towards certain tax incentives, tax holidays and customs exemptions.  

The second category is Allocated Business or In Partnership with Cooperatives (Co-op) and Micro, Small-and-Medium Enterprises (MSMEs). In this category, 89 business types are to be allocated for Co-Op and/or MSMEs or be open for ownership by large companies in partnership with Co-Op and/or MSMEs. An example of the former are agricultural farms of certain staple goods that are less than 25 hectares in size. Meanwhile, an example of the latter are woodchip industries with a production capacity of up to less than 2000 sqm per year. 

The third category is Business Under Certain Requirement, under which the rule of foreign investment threshold still apply for certain business categories. Some 46 business categories fall under this category. An example is the media publication business of which foreign ownership is limited to 49% of the total share.   

It should be noted that the minimum requirement of IDR 10 billion outside of the building and land value is still applicable for foreign investments with exemptions for investments made in special economic zones. 

The issuance of this Presidential Regulation effectively revokes Presidential Regulation No. 76/2007 on the criteria and requirement for the compilation of business closed or open with requirement for investment, as well as Presidential Regulation No. 44/2016 on business closed and business open with requirements for investment.