2021 Summary of Indonesia's Negative & Positive Investment Lists

This article was published in cooperation with one of Greenhouse’s partners in Batavia Advocatorum (B.Av). We interviewed Syafrullah Hamdi, S.H., LL.M., who is currently the Managing Partner at B.Av. Hamdi is a legal author for The Law Reviews (UK) and Bank Permata Priority Magazine

This article was published in cooperation with one of Greenhouse’s partners in Batavia Advocatorum (B.Av). We interviewed Syafrullah Hamdi, S.H., LL.M., who is currently the Managing Partner at B.Av. Hamdi is a legal author for The Law Reviews (UK) and Bank Permata Priority Magazine

Here’s your ultimate guide to Indonesia’s new “Negative Investment List.”

In the past, any investor planning to enter Indonesia should first get to know the Indonesia Negative Investment List or Daftar Negatif Investasi. This regulation tells you what business fields are closed or restricted to foreign investment. Yet, with the introduction of the Omnibus Law in 2020, significant changes have been made.

You heard it right, Indonesia’s newly coined “2021 Positive investment List” is what you need to know in 2021.

Following the introduction of the Omnibus Law on 2 November 2020, we see the that  Indonesian government is taking huge steps to deliver its promise to strengthen the economy. Although the majority of the economy is now open to investment, there are still exceptions to take note of.

If you are considering setting up your business as a foreign Limited Liability Company or PT PMA (Perseroan Terbatas Penanaman Modal Asing in Bahasa), then do also read on to find out what you need to know before investing in Indonesia.


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Background of the Negative Investment List

With reference to the latest 2016 Negative Investment List, businesses were categorized for full or partial foreign ownership. It also included which business lines were exclusively set aside for domestic Small and Medium-sized Enterprises (SMEs). This was to support and protect the autonomy of SME operators.

The most recent revision of the list on 12 May 2016 updated, streamlined, and simplified the previous version’s released in 2014.

What is the Positive Investment List?

The Positive Investment List is Indonesia’s new investment list crafted by the government. This document shows which business fields are open or closed off to foreign investors.

Foreign investors have been keeping watch on the Presidential Regulation (PR) on investment sectors since the omnibus bill was released. The omnibus law was crafted to strengthen the economy by increasing competitiveness, creating jobs, and making it easier to do business in Indonesia. As such, a new list for foreign investment was introduced.

Bahlil Lahadalia, head of the Investment Coordinating Board (BKPM) stated that the change to a “positive list” would “create a positive image because a negative list sounds less comforting [for investors].” This is also in hopes to strengthen the trust between Indonesia and foreign investors.

The Negative Investment List is now revoked and replaced by the Positive Investment List under the new law. PR 10 of 2021 (PR 10/2021) shows the new list of sectors open to 100 percent foreign investment and has been effective since March 10, 2021.

So, where can I invest?

The Indonesian government has categorized the 4 types of business lines and the extent of foreign investment allowed.

Over time, this new investment list could be subjected to changes alongside other government regulations, do refer to the publishing date of this article for reference.

The four categories are:

  1. Priority sectors*
  2. Business fields open to investment, with some restrictions
  3. Business fields open to investment, with a compulsory partnership with Micro, Small, and Medium-sized Enterprises (MSMEs)
  4. Business fields completely closed off to foreign investments

*Click here for the full list of criteria for business enterprises to be a priority sector

Priority sectors

Under the PR regulation, 245 business lines are open to foreign investments. Some areas* that were previously restricted and are now open. They are:

  1. Telecommunication and IT
  2. Health
  3. Energy and mineral resources
  4. Large trading
  5. Plantation and agriculture
  6. Transportation
  7. Press
  8. Hospitality
  9. Construction

*The list is not exhaustive and is subjected to changes. Do consult professional services for the full accurate list.

Additionally, under the Omnibus Law, one of the changes is the minimum capital requirement for Limited Liability Companies or Perseroan Terbatas (PT) in Bahasa.

These business lines will also be eligible for fiscal and non-fiscal incentives, such as tax incentives and reductions, and simplified business processes.

Business fields open to investment, with some restrictions

Business fields in this area are open to foreign investments but will have certain restrictions such as

  • Being reserved for domestic investors
  • Foreign ownership limitations
  • Will require special licenses

For more specifications on these business fields, click here.

Business fields open to investment, with a compulsory partnership with Micro, Small, and Medium-sized Enterprises (MSMEs)

Business fields in this area are open to foreign investments, but only through a compulsory partnership with MSMEs. There are 89 business lines and can be further categorized into 2: Cooperatives or SMEs, and Large-scale enterprises.

A partnership can be established by subcontracting, outsourcing, distribution, and more. We recommend speaking to service providers in this area to find out what your company requires to secure these partnerships.

According to the ASEAN briefing, “The draft regulation stipulates that foreign investors can only carry out business activities in the form of a foreign investment company (PT PMA), and must be large-scale companies, willing to invest over 10 billion rupiahs* (~US$695,000). This is excluding the value of land and property.”

*There is an exemption for startups in Special Economic Zones which may not require an investment of over 10 billion rupiahs, but instead a lower minimum capital requirement

According to Article 109(3) of the omnibus law, it also removes the minimum authorized capital base of IDR 50 billion.

Business fields completely closed off to foreign investments

There are two categories mapped out by the positive investment list showing which business fields are closed off to foreign investments. This consists of at least 112 business lines, you can find the full list here by the ASEAN briefing.

  1. Reserved for cooperatives and MSMEs
  • Business lines that do not use advanced technology
  • Are labor-intensive businesses, characterized by a special cultural heritage
  • The capital for the business activities does not exceed 10 billion rupiahs (~US$695,000)
  1. Closed to both domestic and foreign investments
  • Class-I narcotics and cultivation
  • Casinos
  • Fishing of endangered species
  • Utilization of corals found in nature for the production of jewelry, souvenirs, building materials, etc.
  • Chemical weapons production
  • Industrial ozone-depleting substances industries and industrial chemicals

Do note that changes due to the new law do not affect existing investments and investors from countries with special agreements with Indonesia.

What about prior investments?

The 2021 Positive Investment List also includes a grandfather clause provision for investments that were already in place before the new regulations.

You can also grandfather existing investments in the event of a merger or an acquisition (but not a consolidation of companies), where the relevant companies are in the same business line.

However, we still encourage re-checking with professional service providers on the ground as regulations may be subjected to changes.

What about foreign investments from ASEAN countries?

Before the omnibus law, the Indonesia Negative Investment List also takes into account the ASEAN Economic Community (AEC) program, which came into effect on 1 January 2016. The program aims to increase economic integration between ASEAN countries, including through a free flow of investment.

So, investors from ASEAN countries like Malaysia and Singapore can get a higher cap of ownership (max. 70%) in some business fields. Meanwhile, foreign investors from other regions can only have 67% ownership in those fields.

However, with the changes following the omnibus law, the AEC program is now not applicable under the Positive Investment List. This is because many of the business fields are now 100% open to foreign investment.

How does this affect public companies?

The 2016 Negative Investment List doesn’t affect portfolio investments conducted through the Indonesian Stock Exchange.

In the same way, under the omnibus law, both portfolio and indirect investments are not affected. Indonesian law No. 25 of 2007, or Company Law, is also helpful to understand direct, indirect, and portfolio investments.

Again, we highly encourage consulting experts in this field through service providers that Greenhouse has pre-screened to ensure you know best how to start your business in Indonesia.

Okay, sounds interesting. Where do I start?

You can start by considering investing in the newly opened fields or increasing your existing investments in areas with raised ownership caps. We would like to highlight that this article does not attempt to mention all the changes brought by the new 2021 Positive Investment List.

As such, we encourage you to consult professional advisors to ensure you get the clearest picture of where your business and investments are available.


Want to expand your business to Indonesia?

Greenhouse can connect you to pre-screened service providers to help incorporate your company in Southeast Asian countries. Learn more about our solutions.

If you plan to start a company in Southeast Asia, we can connect you to on-site service providers or help match you with the right service provider for your needs.


This article is not intended to and does not constitute legal or tax advice, recommendations, mediation, or counseling under any circumstance. This webpage and your use thereof does not create an attorney-client relationship with Greenhouse or our service providers in Indonesia. The article solely represents the thoughts of the author and is neither endorsed by nor does it necessarily reflect Greenhouse’s belief. Greenhouse does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the webpage. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular problem.



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