{"id":52650,"date":"2025-10-15T09:00:20","date_gmt":"2025-10-15T09:00:20","guid":{"rendered":"https:\/\/my.legal500.com\/developments\/?post_type=legal_developments&p=52650"},"modified":"2025-10-15T09:00:20","modified_gmt":"2025-10-15T09:00:20","slug":"investment-regulation-updates-an-opportunity-for-foreign-investors-to-cash-out-their-investment-in-indonesia","status":"publish","type":"legal_developments","link":"https:\/\/my.legal500.com\/developments\/thought-leadership\/investment-regulation-updates-an-opportunity-for-foreign-investors-to-cash-out-their-investment-in-indonesia\/","title":{"rendered":"Investment Regulation Updates: An Opportunity For Foreign Investors to Cash Out Their Investment in Indonesia?"},"content":{"rendered":"

The Indonesian government has recently introduced a new investment policy following the issuance of Government Regulation No. 28 of 2025 concerning the Implementation of Risk-Based Business Licensing.<\/strong><\/p>\n

<\/p>\n

The technical provisions are further elaborated under Regulation of the Minister of Investment and Downstream Industry\/Chairman of the Indonesia Investment Coordinating Board No. 5 of 2025 concerning Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facilities through the Electronically Integrated Business Licensing System (Online Single Submission) (\u201cBKPM Regulation No. 5\/2025<\/strong>\u201d), which has been in effect since 2 October 2025<\/u><\/strong>.<\/p>\n

A. Key Changes to Paid-Up Capital Requirements<\/strong><\/p>\n

Through the regulation, the Indonesian government introduces significant adjustments to the requirements for foreign investment companies (\u201cPT<\/strong> PMA<\/strong>\u201d), particularly concerning the minimum paid-up and issued capital. Previously, PT PMA were required to have a minimum paid-up capital and issued capital of IDR10 billion (approximately USD600,000); however, under BKPM Regulation No. 5\/2025,\u00a0 this minimum threshold has been reduced to <\/strong>IDR2.5 billion (approximately USD150,000)<\/strong>. Nevertheless, it is essential to note that the requirement for a total investment value exceeding IDR10 billion\u2014excluding land and building value\u2014remains applicable.<\/p>\n

Furthermore, as a form of ensuring investor commitment to their investment activities, the paid-up and issued capital may not be withdrawn from the company\u2019s account for a minimum period of 12 (twelve) months<\/strong> from the date of payment, except for asset acquisition, building construction, and\/or company operations.<\/p>\n

Any investors fail to comply with this commitment may result in administrative sanctions, which may include: (i) written warnings; (ii) temporary suspension of business activities; (iii) administrative fines; (iv) coercive enforcement measures; (v) revocation of licenses, certifications, or approvals; and\/or (vi) revocation of basic requirements, business licensing, and\/or business licensing to support business activity (Perizinan Berusaha untuk Menunjang Kegiatan Usaha<\/em> or PB UMKU).<\/p>\n

Additionally, BKPM Regulation No. 5\/2025 also introduces specific provisions governing certain business sectors. One notable example is the business activity of developing and operating public electric vehicle charging stations<\/u>, which was not specifically regulated previously. Under the new regulation, however, it is expressly provided that the minimum investment value for such business activity shall exceed IDR 10 billion (excluding land and building value) within one province.<\/p>\n

b. Licensing Simplifications<\/u><\/strong><\/p>\n

BKPM Regulation No. 5\/2025 outlines several simplifications to the business licensing process, as summarized in the table below.<\/p>\n\n\n\n\n\n
Simplification of Procedures for Obtaining Business Licenses Without the Requirement to Issue Basic Requirements<\/td>\nIf a business activity is carried out within a building or a commercial\/service area that is jointly used, and the manager or operator of such building or area has already obtained the following permits:<\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Conformity of Spatial Utilization Activities (Kesesuaian Kegiatan Pemanfaatan Ruang<\/em> or \u201cKKPR<\/strong>\u201d);<\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Environmental Approval (Persetujuan Lingkungan<\/em> or \u201cPL<\/strong>\u201d);<\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Building Approval (Persetujuan Bangunan Gedung<\/em> or \u201cPBG<\/strong>\u201d); and<\/p>\n

\u25cf\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Certificate of Feasibility (Sertifikat Laik Fungsi<\/em> or \u201cSLF<\/strong>\u201d),<\/p>\n

The business actor may utilize the KKPR, PL, PBG, and SLF issued under the name of the manager or operator of the building\/area to apply for a Business Identification Number (Nomor<\/em> Induk<\/em> Berusaha<\/em> or \u201cNIB<\/strong>\u201d) and a Business License (Perizinan Berusaha<\/em>).<\/td>\n<\/tr>\n

Simplification of Business Licensing Without Spatial Utilization Conformity<\/u><\/td>\nFor the following business activities:<\/p>\n

a.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 business activities involving the addition of new business lines that require additional facilities and infrastructure, such as buildings and supporting facilities, for an existing business activity;<\/p>\n

b.\u00a0\u00a0\u00a0\u00a0\u00a0 business activities involving the increase of production capacity for an existing business activity; or<\/p>\n

c.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 business activities that are integrated with an existing business activity,<\/p>\n

A new KKPR is not required, provided that a KKPR and a land title have already been issued, the business activities are conducted within the same contiguous area, and are carried out by the same business actor.<\/td>\n<\/tr>\n

Simplification of Basic Requirements for Supporting Business Activities<\/u><\/td>\nSupporting business activities may now serve as a source of income or generate profit for the business actor<\/strong>, whereas previously they were categorized as non-revenue-generating activities.<\/p>\n

 <\/p>\n

Such supporting business activities must be included in the company\u2019s deed of establishment or amendment thereof, and approvals must be obtained from the relevant institution.<\/p>\n

 <\/p>\n

In addition, supporting business activities located within the same site as the main business activity may utilize the KKPR and PL already obtained for the main business activity, provided that such supporting activities are covered within the existing environmental documents.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

C. Extension of Investment Reporting Deadline<\/u><\/strong><\/p>\n

PT PMA is required to submit its Investment Activity Reports (Laporan Kegiatan Penanaman Modal <\/em>or \u201cLKPM<\/strong>\u201d) for each business activity and location after obtaining its NIB.<\/p>\n

Under the new provisions of Article 286 paragraph (5) of BKPM Regulation No. 5\/2025, the reporting schedule for LKPM submission has been adjusted as follows:<\/p>\n

    \n
  1. Quarter I: no later than 15 April of the current year;<\/li>\n
  2. Quarter II: no later than 15 July of the current year;<\/li>\n
  3. Quarter III: no later than 15 October of the current year; and<\/li>\n
  4. Quarter IV: no later than 15 January of the following year.<\/li>\n<\/ol>\n

    It is interesting to see whether the new minimum paid-up capital and issued capital requirements would result in foreign investors withdrawing their idle investment previously put in the PT PMA due to the old regulation. Nevertheless, the regulation marks a new chapter in Indonesia\u2019s investment landscape, reflecting the government\u2019s strategic move toward stronger control and oversight of investment activities. While the regulatory requirements for foreign investors have become more detailed, the government\u2019s involvement has also grown more proactive\u2014not only in attracting greater investment inflows, but also in ensuring smoother post-investment compliance and governance.<\/p>\n

     <\/p>\n

    For further information, please contact the authors:<\/p>\n

     <\/p>\n

    Ferry F. Rajagukguk<\/strong><\/p>\n

    Partner<\/p>\n

    rajagukguk@fknk.co.id<\/a><\/p>\n

     <\/p>\n

    Sagung Dewi Tarastya Y. P.<\/strong><\/p>\n

    Associate<\/p>\n

    tarastya@fknk.co.id<\/a><\/p>\n

    www.fknk.co.id<\/a><\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-52650","legal_developments","type-legal_developments","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/legal_developments\/52650","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/legal_developments"}],"about":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/types\/legal_developments"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/media?parent=52650"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}