Indonesia's Positive Investment List: Which Sectors Are Open to Foreign Ownership

How Indonesia's Foreign Ownership Framework Works

Indonesia regulates foreign ownership through a Positive Investment List — formally established under Presidential Regulation No. 10 of 2021, which replaced the previous Negative Investment List (Daftar Negatif Investasi). The shift in nomenclature reflects a shift in policy orientation: rather than listing what is closed, the current framework lists what is conditionally open and at what maximum foreign ownership percentage.

Business activities not specifically listed in the Positive List are fully open to 100% foreign ownership. For those that are listed, the regulation specifies the maximum foreign ownership percentage permitted, which ranges from a minority stake to a near-total restriction. Some sectors are reserved exclusively for domestic investors or for small and medium enterprises.

Sectors With Significant Foreign Ownership Restrictions

Broadcasting and media remain among the most restricted sectors, with foreign ownership generally capped at 20% to 49% depending on the specific activity. This applies to television stations, radio broadcasters, and print media — though digital media platforms have a somewhat different treatment under the Electronic Information and Transactions framework.

Retail and wholesale trading activities with investment values below certain thresholds are reserved for domestic investors or for cooperatives and small enterprises. Large-format retail is more accessible to foreign investment but subject to specific location and operational requirements.

Port services, certain maritime transport activities, and electricity distribution remain subject to restrictions that reflect strategic infrastructure considerations. The maximum foreign ownership stake in these sectors varies by subsector and often depends on project scale and government partnership requirements.

In the financial services sector, maximum foreign ownership in commercial banks was liberalized significantly — foreign investors may own up to 99% of a licensed Indonesian commercial bank — but insurance and multifinance companies face lower caps, typically in the 80% to 85% range depending on the business type.

Sectors Open to 100% Foreign Ownership

Most manufacturing activities, including consumer goods, industrial products, and export-oriented manufacturing, are open to 100% foreign ownership. This is a deliberate policy choice to attract foreign direct investment in production capacity. Special Economic Zones and specific industrial estates may offer additional incentives on top of the general framework.

Technology, software development, e-commerce platforms, and digital services are generally open to full foreign ownership, though platforms with significant data processing activities in Indonesia are subject to the data localization requirements of Government Regulation No. 71 of 2019, which is a compliance consideration separate from the ownership framework.

How to Read the List in Practice

The practical complication is that the Positive Investment List uses Indonesian Business Classification Codes (KBLI codes) to identify business activities. The same general business concept — for example, "financial consulting" or "technology services" — may map to multiple KBLI codes with different ownership restrictions. The KBLI code selected during company registration through the Online Single Submission (OSS) system determines which ownership restrictions apply and which licenses are required. Selecting the wrong code is a common and consequential error in PT PMA incorporations.

For sectors with maximum foreign ownership below 100%, it is possible to structure the investment through a combination of direct foreign shareholding and indirect participation, but these arrangements require careful legal structuring and must not create a nominee arrangement — which is prohibited under Indonesian investment law.

Verifying Current Restrictions

The Positive Investment List has been updated through ministerial regulations since Presidential Regulation No. 10/2021 was issued. Sector-specific rules — particularly in financial services, healthcare, and education — are also governed by sector regulators (OJK, Kemenkes, Kemendikbud) whose rules may apply additional restrictions beyond the general investment framework. Any ownership assessment should therefore verify both the general investment regulation and the applicable sector-specific rules before structuring the investment.