Indonesia New Investment Regime: General Overview on Positive Investment List

In connection with Law No. 11 of 2020 on the Job Creation (“Omnibus Law”), the President of the Republic of Indonesia has issued Presidential Regulation (“PR”) No. 10 of 2021 on the Investment Business Field that has been amended by PR No. 49 of 2021 (“PR 10/2021” or “Positive List”).

The Positive List was issued to replace the previous negative investment list, Presidential Regulation No. 44 of 2016 on Lists of Business Fields That Are Closed and Open with Conditions to Investment known as Negative Investment List (“Negative List”)

Main Keys of Positive Investment List: Please see below some main keys of the Positive List provisions.  

Liberalization of Investment: PR 10/2021 stipulates that all business sectors are now open for investment unless it is otherwise stated as completely closed to investments or specifically reserved for central government and no cooperation with a third party allowed (Art. 2 (1) of PR 10/2021). 

The Positive List features a significant change by opening up numerous business sectors that previously were closed or restricted for foreign investment. (Note: You can access our publications regarding Indonesia’s new investment regime on sectoral level here.)

Closed Business Sector: Pursuant to Art. 2 (2) (a) and (b) of PR 10/2021, there are several business activities that are closed for investment, which includes the following:

  1. narcotics;
  2. all form of gambling and/or casinos;
  3. fishing for prohibited species as listed in CITES;
  4. coral/reef extraction;
  5. chemical weapons manufacturing;
  6. manufacturing of chemicals and materials     that are harmful to ozone; and
  7. Alcoholic Beverage (KBLI 11010), Wine (KBLI 11020), and Beverages Made from Malt (KBLI 11031)

Additionally, public service or strategic defense and security sectors can only be carried out by the Central Government and closed for any cooperation with any parties (both domestic or foreign).

Investment Priority Sector: The Positive List introduces a priority sector, as listed on Appendix I of PR 10/2021, which consist of business activities that satisfied the following criteria: 

  1. National Strategic Program;
  2. Capital intensive;
  3. Labor intensive;
  4. Sophisticated technology;
  5. Pioneering industries;
  6. Export-oriented; and/or
  7. Research, development, and innovation Oriented.

There are a total of 246 prioritized business activities being listed as priority fields, each of these prioritized business sectors are eligible to enjoy certain benefits, including: (i) fiscal incentives (e.g., tax allowances, tax holidays, investment allowances, and import-duty exemption); and (ii) non-fiscal incentives in the form of ease on business licensing, immigrations, employment matters, as available under the applicable laws.

Reserved for or Mandatory Partnership with Cooperatives and MSMEs (“CMSME”): A total of 106 business activities, listed on Appendix II of PR 10/2021, are reserved for or require partnership with cooperatives or MSMEs. Hence, such business lines are restricted to foreign ownership.

Below are the criteria of business activities which are subject to such restriction

Reserved for CMSME

Mandatory Partnership

with CMSME

  • Do not require advanced technology or use simple technology;
  • Labor intensive business having a particular process and cultural heritage; and/or
  • Require capital less than 10 billion Rupiahs, excluding land and buildings.
  • Businesses which are commonly carried out by cooperatives and MSME; and/or
  • Businesses which are encouraged to enter supply chain of large-scale business.

Business Sectors which are Conditionally Open to Investment: In addition to the points elaborated in the above paragraphs, PR 10/2021 categorized the investment requirements into: (i) reserved entirely for domestic investor; (ii) restricted for foreign capital ownership; (iii) require special permits; or (iv) Business lines that are monitored and stringently regulated as well as subject to other regulations in management and monitoring of alcoholic beverages (Art. 6 (1) of PR 10/2021).

Notwithstanding some exceptions applicable to certain business fields, the New Positive List provides the extensive reduction in the number of restricted business activities, from 350 KBLI as listed under the previous Negative List to be 37 business activities as listed in Appendix III of the Positive List.

Amendment of Positive List: On 25 May 2021, Indonesia’s government has amended PR 10/2021 through the issuance of PR 49/2021. The most significant changes introduced by PR 49/2021 are as follows:

1. Changes on Alcohol Beverages Industry: PR 49/2021 includes Alcoholic Beverage (KBLI 11010), Wine (KBLI 11020), and Beverages Made from Malt (KBLI 11031) to the list of industries that are closed for investment.

Additionally, the activities of Alcoholic Beverage Wholesaler (KBLI 46333), Alcoholic Beverages Retailer (472221), and Alcoholic Beverages Small-scale (Kaki Lima) Retail Trade (KBLI 47826) are now monitored, stringently regulated, and also subject to applicable regulations management and monitoring of alcohol beverages.

2. Allocation of E-Commerce (Trade Using Internet) for Certain Products for CSMEs: PR 49/2021 stipulates that e-commerce trading of the following products is now allocated for CSMEs:

  1. food and beverages, tobacco, chemicals, pharmacy, cosmetics, and laboratory equipment (KBLI 47911);
  2. textile, clothes, footwear, and personal equipment (KBLI 47912); and
  3. household and kitchen equipment (KBLI 47913).

Consequently, the above business activities are now closed to foreign investment.

3. Courier and Postal Activities: PR 49/2021 sets maximum foreign ownership of 49% to courier activities (KBLI 53201), which previously was unlisted on PR 10/2021.  However, postal activity (KBLI 53100) is omitted from PR 49/2021 and is now 100% open to foreign ownership (previously limited to a maximum of 49%).

4. Increase in number of businesses reserved for and mandatory partnership with CSMEs:  PR 49/2021 increases the number of business activities that are: (i) reserved for cooperatives and SMEs, from 51 previously, to be 60 business activities; and (ii) mandatory partnership with CSMEs from 38 to 46 business activities.

The article above was prepared by Marshall S. Situmorang (Partner), Audria Putri (Senior Associate), and Aniendita Rahmawati (Associate)

Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances. For more information, please contact us at