Can a Foreigner Own 100% of a Company in Indonesia?

The question of whether a foreigner can own 100% of a company in Indonesia has a clear answer for most investors: in many sectors, full foreign ownership is now permitted. Since the Positive Investment List replaced the former Negative List, the default position has shifted: sectors that are not expressly restricted are open to up to 100% foreign ownership through a PT PMA, the foreign-owned Indonesian company. The work lies in confirming where your specific activity falls.

The short answer

Full foreign ownership is the rule rather than the exception across a wide range of activities, including much of consumer goods, manufacturing, technology and many services. A defined minority of sectors remain capped, reserved for domestic investors, or open only with a local partner. So the honest answer is conditional: yes, very often, but only after the activity has been mapped to its classification and checked against the list.

How the Positive Investment List works

The Positive Investment List (Presidential Regulation 10/2021 and its amendments) inverted the previous logic. Where the old Negative List enumerated what foreigners could not do, the current framework presumes sectors are open unless a restriction is stated. Each business activity maps to a KBLI classification code, and that code determines the permitted foreign-ownership percentage, any conditions, and the licensing path.

This is why the classification step is not administrative detail but the substance of the answer. Two businesses that sound similar can sit under different KBLI codes with different ownership treatment, so the percentage cannot be assumed from the industry label alone.

In practice, a single physical business often carries several classifications at once: one for manufacturing, another for wholesale distribution, another for online sales, and each may be treated differently. A consumer-goods company that also imports and sells direct-to-consumer is reading three classifications, not one. A careful activity-by-activity mapping is therefore the only reliable way to establish the true ownership position, and it is work best done before any capital is committed rather than discovered during licensing.

Sectors that remain restricted

A limited set of activities carries ownership caps, partnership requirements, or full reservation for domestic or MSME participation. These include certain areas of media, some land-transport and specific agricultural activities, alongside sectors governed by their own regulators (financial services, for instance, sit under the OJK rather than the general list). The detail changes as regulations are amended, which is why the current text must be checked rather than relied on from memory.

Because these carve-outs are narrow and periodically revised, the safe approach is to read the current regulation for the exact activity rather than rely on a general impression that a field is “open” or “closed”. The treatment often turns on specific sub-classifications within a broader sector, so two ventures in what looks like the same industry can face different rules.

What to do when ownership is capped

Where a sector limits foreign ownership, the compliant route is a properly structured joint venture with an Indonesian partner, with shareholder agreements, governance rights and exit mechanics that protect the foreign investor’s position within the permitted percentage. This is a genuine structure, negotiated transparently, not a workaround.

What it is not is a nominee arrangement. Using an Indonesian nominee to hold shares on a foreign investor’s behalf in a restricted sector is legally fragile, unenforceable for the foreign party, and a serious risk to the entire investment. The right answer to a cap is a compliant structure, not a disguised one.

A well-drafted joint venture does more than satisfy the percentage. It sets the governance rights, reserved matters, deadlock mechanics and exit provisions that protect a minority foreign investor’s economic and strategic interests, so that a capped shareholding need not mean losing control of the decisions that matter. Negotiated openly, the agreement is where the foreign party’s position is genuinely secured; the ownership percentage is only the starting point.

Beyond the percentage: control and obligations

Owning 100% of the shares is not the same as operating without local obligations, and conflating the two leads to surprises. Even a wholly foreign-owned PT PMA must observe the ordinary requirements of an Indonesian company: it needs at least two shareholders, at least one director and one commissioner (who may be foreign), and it operates under Indonesian employment, tax and reporting rules like any other company. Full ownership settles who holds the economic and voting rights; it does not exempt the company from the framework every Indonesian company works within.

Some activities layer further obligations on top regardless of ownership, most notably local-content requirements (TKDN) in certain sectors, which oblige a minimum share of local inputs even where the entity is entirely foreign-owned. The practical takeaway is to separate two questions that are easily merged: can I own it, answered by the Positive Investment List, and what must I do to operate it, answered by the sector’s own rules. Both belong in the analysis before capital is committed, because a permitted ownership percentage with unexamined operating conditions is only half the picture.

How the position can change over time

An ownership answer is a snapshot of the current regulation, not a permanent guarantee, and two kinds of change matter. First, the Positive Investment List is amended periodically: a sector open today can be tightened, or a restricted one liberalised, so the position should be re-confirmed for any material new commitment rather than assumed to hold indefinitely. Second, some licences and sectors have historically attached conditions that evolve over the life of the investment, such as commitments to broaden local participation over time, which have to be read into the long-term plan rather than treated as a one-off entry check.

Ownership also shifts through corporate events. Adding a new business activity can bring a different KBLI code, and with it a different ownership rule, into the same company; and a later acquisition or sale is examined against the ownership rules that apply then, not those that applied at incorporation. The disciplined investor therefore treats the ownership position as something to monitor and protect across the investment’s life, not a box ticked once at the start.

Confirming your position

Because the consequences of an ownership error surface late (typically at the licensing stage, after incorporation), the ownership question should be resolved first, before any filing. A short feasibility review that maps the activity to its KBLI code and checks the current list is the cheapest insurance against a costly amendment later. Read the full PT PMA establishment guide for how this fits the wider process, see how the Positive Investment List is structured, or read how we structure a compliant market entry. Our team and partners have advised on cross-border transactions exceeding USD 50M in aggregate, spanning PMA establishment, acquisitions and FDI structuring across Indonesia.

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