The Positive Investment List in Indonesia, Explained

The Positive Investment List is the regulation that determines what foreign investors may own in Indonesia, and by how much. Introduced under Presidential Regulation 10/2021, it replaced the long-standing Negative List and reframed the country’s investment posture: instead of cataloguing what foreigners cannot do, it presumes sectors are open unless a restriction is stated. For anyone planning a market entry, reading this list correctly for the intended activity is the step that everything else depends on.

What the Positive Investment List is

The list is a regulatory framework that assigns each business activity (identified by its KBLI classification code) a permitted level of foreign participation and any attached conditions. It is the authoritative answer to the ownership question, and it governs whether a wholly foreign-owned PT PMA is possible, whether a joint venture is required, or whether an activity is reserved entirely for domestic or small-business participation.

How it replaced the Negative List

The shift from the Negative List to the Positive Investment List was more than a rename. The former approach listed prohibited and restricted sectors, with everything else open by implication; the current approach makes openness the default and names the exceptions. In practice this widened the field of sectors available to full foreign ownership and signalled a more investment-friendly stance, while still reserving a defined set of activities. The intent is to make Indonesia easier to enter without removing the protections the state wishes to keep.

The categories within the list

Activities broadly fall into a few treatments:

• Fully open: up to 100% foreign ownership permitted, covering the majority of activities.
• Open with conditions: permitted subject to requirements such as a maximum foreign-ownership percentage, a specific licence, or a partnership.
• Reserved or restricted: set aside for domestic investors, MSMEs and cooperatives, or closed to foreign participation.
• Priority sectors: activities the government actively encourages, which may carry incentives.

Which treatment applies depends entirely on the precise activity and its classification, not on the broad industry label.

The list also identifies activities reserved for, or requiring partnership with, micro, small and medium enterprises and cooperatives, reflecting a policy aim of drawing foreign capital in alongside domestic participation rather than displacing it. For a foreign investor, the practical consequence is that “open with conditions” can mean several different things: a percentage cap, a compulsory local partner, a specific licence, or a minimum investment. It is the conditions, not just the headline permission, that define what an entry actually looks like.

Priority sectors and the incentives attached

One category deserves more than a line, because it is where the policy actively works in the investor’s favour. The regulation designates a set of priority business fields, activities the government wants to attract, spanning pioneer industries, labour-intensive sectors, export-oriented and high-technology activities, and projects in designated regions. Being classified in a priority field can unlock fiscal incentives: tax holidays or reductions for qualifying pioneer industries, investment allowances, and import-duty relief on capital goods, alongside easier access to certain facilities.

For a foreign investor this reframes the list from a pure constraint into a planning tool. The same activity-and-classification analysis that establishes whether an entry is permitted also reveals whether it qualifies for support, and the two questions are best asked together. Eligibility is specific to the activity, the investment value and the location, so an incentive should be confirmed for the precise project and built into the financial model rather than assumed from a headline; but overlooking the priority category means potentially leaving real value on the table.

Reading your sector correctly

The practical difficulty is that a business rarely maps to a single, obvious code. Activities that sound alike can sit under different KBLI classifications with different ownership treatments, and many ventures involve several activities at once. Reading the list correctly therefore means first defining the real business scope, then matching each activity to its classification, and only then reading the permitted ownership, rather than assuming the percentage from the sector name.

This is where many entries quietly go wrong. An investor confirms that “retail” or “consulting” is open, designs the structure around that impression, and only later discovers that the specific sub-activity they intend to carry out sits under a different code with a different rule. Reading the list well is less about finding a single answer than about confirming that every activity the company will actually undertake is accounted for, because the entity will be licensed against all of them, not only the headline one.

Conditional and partnership requirements

Where an activity is open with conditions, the detail matters. A maximum foreign-ownership percentage means a compliant joint venture with aligned shareholder agreements, not a nominee arrangement designed to disguise control (which is unenforceable for the foreign party and a risk to the investment). Partnership and licensing conditions should be read as part of the structure from the outset, because they shape the entity’s design rather than being added afterwards.

How to check the list, step by step

Turning the principle into practice follows a repeatable sequence:

1. Define the real business scope. List every activity the company will actually carry out, manufacturing, distribution, online sales, services, not just the headline one.
2. Map each activity to its five-digit KBLI code. The classification, not the industry name, is what the rules attach to, and similar-sounding activities can differ.
3. Read the permitted foreign participation for each code against the current regulation, noting any percentage cap, partnership, licence or minimum-investment condition.
4. Check for priority-sector treatment that might bring incentives, and for MSME reservations that might exclude foreign participation.
5. Confirm the current text. Because the list is amended, verify the position as it stands now, and for anything material with the authorities, rather than relying on an older summary.

The output of this exercise is not a single “open or closed” verdict but a complete map of every activity the entity will be licensed for, and the conditions on each. That map is what a sound entry structure is built on, and doing it before incorporation is far cheaper than discovering a gap during licensing. It is also the analysis a co-investor, lender or later acquirer will expect to see done properly.

Why it matters for entry

Because the list governs ownership, and ownership governs the entire structure, an error here cascades, surfacing at the licensing stage, after incorporation, when it is expensive to correct. The list is also amended periodically, so the current text must be checked rather than relied on from memory. Confirming the position before any filing is the cheapest insurance available. Read how this fits the PT PMA establishment process, see whether a foreigner can own 100% in your sector, or read how we structure a compliant market entry. Our team and partners have advised on cross-border transactions exceeding USD 50M in aggregate across Indonesia.

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