Indonesia is in the process of introducing major reforms to its business licensing regime, benefiting both domestic and foreign investors. Key changes include clearer timelines through Service Level Agreement mechanisms, a more unified regulatory framework, and, importantly for foreign investors, a proposed reduction in the minimum paid-up capital for foreign investment companies from IDR 10 billion to IDR 2.5 billion. While the overall minimum investment threshold remains above IDR 10 billion per business line, the lower capital requirement could ease market entry and free up operational capital. The success of these reforms will depend on smooth implementation, timely issuance of sectoral regulations, and consistent enforcement across all levels of government.

In this article, Winda Tania (Partner), Maharani Athina Nelwan (Senior Associate), Anissa Astarina Soeranto (Associate), and Azizah Nadhira (Associate) from Dentons HPRP review the new framework and its implications for businesses, with a particular focus on foreign investors. They discuss the significance of the proposed reduction in minimum paid-up capital for foreign investment (PMA) companies, the opportunities it creates for market entry, and the potential challenges during the transition phase. Their analysis offers practical insights for companies navigating Indonesia’s evolving regulatory landscape.

Read the full article here.

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