Which sectors foreign investors can enter in Indonesia

Indonesia’s starting rule for foreign investors is that a business field is open unless the law says otherwise. The list that says otherwise is the Positive Investment List: Presidential Regulation 10 of 2021 on Investment Business Fields. It took effect on 4 March 2021 and was amended once, by Presidential Regulation 49 of 2021 in May that year. In October 2026 the official regulation database still lists both as in force, with no later change.

The list is written against business codes rather than whole sectors. Whether you can own an estate, a mine or a property company with foreign capital, and on what terms, depends on the code for each activity and on the sector law behind it.

How the list sorts business fields

The 2021 list replaced the old Negative Investment List (Presidential Regulation 44 of 2016). It starts from openness and then sorts business fields into groups.

• Open fields, which any investor can enter, domestic or foreign, with no condition from the list.
• Priority fields, which can qualify for fiscal incentives such as tax holidays and tax allowances, and for non-fiscal help such as easier licensing. Each incentive has its own rules and its own application.
• Fields with conditions, which may cap foreign ownership, keep the field for domestic investors or require a special licence.
• Fields allocated to cooperatives and micro, small and medium businesses, and fields that larger investors can enter only in partnership with them.
• Closed fields, which no one can invest in.

The closed group is short. It covers the fields barred by Article 12 of the Investment Law (Law 25 of 2007, as amended by the Job Creation Law), such as narcotics cultivation, gambling and chemical weapons, plus activities only the central government may carry out. The May 2021 amendment also closed three alcohol industries: spirits, wine and malt drinks.

Why the KBLI code decides the answer

Every business activity in Indonesia has a five-digit code in the Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia, KBLI), kept by the statistics agency. The list’s entries are written against these codes, sometimes with a condition on scale. When a company registers in the government’s online licensing system (Online Single Submission, OSS), it picks its codes. Those codes then decide whether foreign capital is allowed, which licences the activity needs for its risk level and how much a foreign-owned company has to invest.

That’s why two businesses that look alike can face different rules. An oil palm estate (KBLI 01262) and a palm oil mill (KBLI 10431) sit under different codes, with different licences and requirements. A company that owns and lets out property (KBLI 68111) is treated differently from one that builds for others, which falls under construction codes.

Choose the codes before you set up the company. They go into the deed of establishment and onto the business identification number (Nomor Induk Berusaha, NIB), and changing them later means amending the company’s articles. The guide to setting up a PT PMA covers that process and the investment minimums that apply per code.

Plantations, mining and real estate

Oil palm and other plantation codes are open to foreign capital, but the Plantation Law (Law 39 of 2014) adds its own conditions. A plantation company must facilitate community plantations covering at least 20% of the area it farms. It also needs a plantation business licence, a right to cultivate (Hak Guna Usaha, HGU) and, where the land is in a forest area, its release. The plantation permits article follows that path step by step.

Coal and gold mining codes are open to foreign capital too, with a condition from the Mining Law (Law 4 of 2009, as amended by Law 3 of 2020). A foreign-owned holder of a production-stage licence must sell 51% of its shares to Indonesian parties in stages. People’s mining licences (Izin Pertambangan Rakyat, IPR) are only for local residents and local cooperatives. The mining licences article explains each licence type.

Real estate codes are open to foreign-owned companies. The limit there comes from land law. A foreign-owned company can hold a right to build (Hak Guna Bangunan, HGB) or a right of use (Hak Pakai), but never freehold (Hak Milik), which is reserved for Indonesian citizens and a few designated Indonesian bodies.

What the list doesn’t tell you

An open code doesn’t mean an easy entry. Foreign investment must take the form of an Indonesian limited liability company, a PT PMA, under the Investment Law. The company then needs the licences that match each code’s risk level, an approved location under the spatial plan, environmental approval where the activity calls for it and the right land title.

Sector laws can add conditions that the list doesn’t show, as the plantation and mining examples above do. Where a field requires partnership with small businesses, the partnership has to be real and documented, and a side agreement that hands control back to the foreign investor puts the whole structure at risk. The list is also a presidential regulation, so it can change faster than a law. Check the version in force on the day you apply, not the one you read about last year.

Before you commit

• Write down every activity the company will carry out, including side activities such as a jetty, a mill or workers’ housing, and find the code for each.
• Check each code in OSS for its risk level, whether foreign capital is allowed and on what terms. Confirm the result with the Ministry of Investment and Downstream Industry (Badan Koordinasi Penanaman Modal, BKPM) or an Indonesian corporate lawyer.
• Read the sector law behind each code, since the plantation, mining and land rules sit outside the list.
• Keep the same codes in the deed, the NIB and every licence, and update all of them together if the business changes.