Indonesia’s positive investment list explained.

Indonesia introduced the positive investment list on 4 March 2021 through Presidential Regulation No. 10 and amended it through Presidential Regulation No. 49 of 2021 on 25 May 2021, replacing the previous negative investment list. The regulation represents a fundamental shift in Indonesia’s approach to foreign investment, opening previously restricted sectors and simplifying ownership requirements.

The positive investment list forms part of Indonesia’s broader economic reforms under the Omnibus Law on Job Creation. Unlike the negative investment list that specified sectors closed to foreign investment, the new framework operates on the principle that business sectors are open to 100% foreign investment unless subject to specific limitations.

This guide examines the four categories of business fields, investment requirements and available incentives for foreign investors.

What is the positive investment list in Indonesia?

The positive investment list establishes which business sectors are open to both foreign and domestic investors. The default principle assumes business sectors are 100% open to foreign investment unless specific requirements or limitations apply. This approach contrasts with the previous negative investment list that enumerated sectors closed or restricted to foreign participation.

Presidential Regulation 10 of 2021 as amended by Presidential Regulation No. 49 of 2021 represents one of Indonesia’s greatest liberalisations in foreign ownership limitations since the negative investment list was first introduced in the 1980s. The regulation consolidated and simplified various sectoral restrictions, reducing barriers for international investors seeking market entry.

The positive investment list opened business opportunities in sectors that were previously forbidden or restricted to investors. Notable sectors gaining expanded foreign access include the following:

• construction services
• distribution
• energy
• telecommunications and transportation

However, the list maintains closures for specific sectors reserved for the government or deemed inappropriate for private investment.

Categories of business fields open to investment in Indonesia

Presidential Regulation No. 10 of 2021 as amended by Presidential Regulation No. 49 of 2021 classifies business fields open to investment into three distinct categories. Each category carries different requirements, limitations and incentive structures designed to balance foreign investment attraction with domestic economic priorities.

Priority sectors

Priority business sectors comprise 245 business lines that meet specific criteria aligned with Indonesia’s economic development objectives. To qualify as priority sectors, businesses have to demonstrate characteristics including:

• capital intensity
• export orientation
• labour intensity
• use of advanced technology
• pioneering industry status
• alignment with strategic national programmes or engagement in research
• orientation in development, research and innovation activities

These sectors receive preferential treatment through fiscal and non-fiscal incentives. In total, 183 business lines are eligible for tax allowances, while 18 can receive tax holidays and 44 qualify for investment allowances. Priority sector designations evolve as the Indonesian government responds to economic shifts and emerging opportunities in digitalisation and post-pandemic consumer demands.

Fiscal incentives available to priority sectors include tax allowances for investment in specific businesses, corporate income tax reductions through tax holiday provisions and investment allowances. Capital-intensive businesses exceeding IDR 500 billion receive a 100% reduction in corporate income tax from 5 years for up to 20 years depending on the value of the investment, and investments worth IDR 100 billion to IDR 500 billion receive a 50% reduction in corporate income tax based on Ministry of Finance Regulation No.130 of 2020. This was last amended through Ministry of Finance Regulation No. 69 of 2024, which regulates Indonesia’s tax holiday policy. Import duty exemptions further reduce financial barriers for qualifying investments.

Non-fiscal incentives include:

• streamlined business licensing procedures
• guaranteed availability of energy supplies
• provision of supporting infrastructure
• guaranteed availability of raw materials and facilitation for immigration
• employment and other conveniences regulated under Indonesian law

These incentives aim to reduce operational friction and support rapid business establishment.

Business fields requiring partnerships with cooperatives and SMEs

This category encompasses 106 business lines where business activities are allocated for cooperatives or MSMEs, or where business activities require foreign investors or large enterprises establish partnerships with cooperatives or small and medium-sized enterprises. The partnership requirement ensures smaller domestic businesses benefit from foreign investment and protects sectors with cultural or economic significance.

Business fields are divided into two groups within this category. The first group includes fields allocated exclusively to cooperatives and local MSMEs, covering activities that do not use advanced technologies, require maximum capital of IDR 10 billion excluding land and buildings, demonstrate labour-intensive characteristics with specific cultural heritage significance or were traditionally occupied by cooperatives or MSMEs.

The second group includes business sectors open to large enterprises and foreign investors subject to compulsory partnerships with cooperatives and local MSMEs. These sectors typically involve businesses conducted by MSMEs or cooperatives that have the potential to enter large-scale supply chains. Partnership arrangements can take various forms including profit-sharing agreements, subcontracting relationships, franchise arrangements or supply chain integration.

To simplify and accelerate business collaborations, access to join the MSMEs or cooperatives partnership programme is available through the centralised Online Single Submission (OSS) platform. Once an entity initiates the partnership request on the OSS platform, the system redirects the user to the appropriate related ministry.

Business fields with specific requirements or limitations

This category includes 37 business sectors with several business sectors open to foreign investors subject to meeting specific requirements. Business sectors under this classification remain accessible but face conditional access depending on investor characteristics or investment structure.

Requirements may include investment capital thresholds for domestic investors, investment capital requirements with limitations on foreign investors or mandatory special licences and approvals from relevant authorities. However, foreign ownership limitations can be waived under specific circumstances.

Waiver conditions include investments made through the Indonesian Stock Exchange, investments made in designated special economic zones (Sei Mangkei, Tanjung Lesung, Palu, Mandalika, Galang Batang, Arun Lhokseumawe, Tanjung Kelayang, Bitung, Morotai, Maloy Batuta Trans Kalimantan and Sorong), investors granted special rights under bilateral agreements between their country and Indonesia or investments made before introduction of the new investment list.

Special economic zones offer reduced regulatory requirements to attract foreign investment in strategic locations. Moreover, investments in many business sectors are subject to certain conditions, such as shareholding composition or licensing requirements, except when conducted in special economic zones. This creates preferential treatment for businesses willing to establish operations in designated development areas.

Business fields open to all investors

Business fields in this category are open to all investors, both foreign and local, without restrictions. The positive investment list lifted restrictions on many business sectors that were previously restricted for 100% foreign investment, including:

• telecommunication and IT sectors (internet service providers, fixed telecommunication networks and mobile telecommunications providers)
• health sectors (hospitals, wholesale of pharmaceutical raw materials, healthcare equipment distribution and pharmaceutical products)
• energy and mineral resources (oil and gas, electricity generation)
• plantation and agriculture (palm oil seed plantations)
• press sectors (publication of newspapers, magazines and bulletins)

Additional unrestricted sectors include:

• cable and satellite telecommunication activities
• crude palm kernel oil and crude palm oil industry
• fee or contract basis real estate
• free-range chicken breeding and livestock activities
• general distributorship activities
• online retail operations
• web portals and digital platforms for commercial purposes
• wholesale trade of laboratory, pharmacy and medical equipment

Foreign investors can own 100% of businesses in these sectors without partnership requirements, capital limitations or special approval procedures beyond standard business registration through the Online Single Submission system.

What business fields are closed to investment in Indonesia?

Despite wide liberalisation, Indonesia’s positive investment list still fully prohibits six sectors such as gambling, chemical weapons and controlled substances, while many previously restricted industries are now open subject to sector-specific regulations. These prohibited sectors include:

• cultivation and processing of controlled substances
• gambling and casino operations
• fishing of species listed in Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora
• utilisation or collection of coral for building materials, aquariums or souvenirs
• chemical weapon manufacturing
• industrial ozone-depleting substance production

Before adoption of the positive investment list, foreign direct investment was prohibited in an additional 16 sectors, including forestry, energy and mineral resources, transportation, tourism, communication and informatics, banking, finance, education and health. The positive investment list significantly reduced these restrictions, though sector-specific regulations may impose additional requirements through relevant ministries or agencies.

Implementation and licensing

The positive investment list operates in conjunction with Indonesia’s OSS system. The OSS system categorises businesses based on risk levels (low, medium and high) and issues permits accordingly, reducing bureaucratic complexity for foreign investors.

Businesses obtain appropriate licences and permits through the OSS system based on their risk classification. Low-risk businesses require only a Business Identification Number, medium-risk businesses need additional standard certifications and high-risk businesses need secure business licences from relevant government authorities. This risk-based approach streamlines approvals while maintaining regulatory oversight.

Sector-specific regulations may impose additional requirements beyond the positive investment list framework. Foreign investors should verify current sectoral regulations with relevant authorities or legal advisers before finalising investment decisions.

Conclusion

The positive investment list represents a significant liberalisation of Indonesia’s foreign investment framework, expanding opportunities across multiple sectors while maintaining strategic protections for specific industries and domestic businesses. The regulation simplifies foreign ownership requirements, reduces capital barriers and provides substantial incentives for priority sectors aligned with national development goals.

How Acclime can help foreign investors

Acclime provides comprehensive support for foreign investors working through Indonesia’s positive investment list and sectoral regulations. Our team assists with investment structure planning, sectoral compliance verification, business registration through the OSS system and application for fiscal incentives in priority sectors. We guide clients through partnership arrangements with local cooperatives or MSMEs when needed and coordinate licensing procedures with relevant government authorities.

Contact Acclime to explore investment opportunities under Indonesia’s positive investment list.