Indonesia welcomes serious investors with strong capital and long-term commitment.
New investment rules in Indonesia have been reaffirmed through the issuance of Head of BKPM Regulation No. 5 of 2025, which clarifies capital standards for Foreign Direct Investment (FDI) companies. This regulation is designed to ensure that foreign investment aligns with national economic priorities and delivers long-term value.
These updates introduce clearer standards for minimum investment, paid-up capital, and investor qualifications, reinforcing the government’s goal to filter serious investors.
Under these new investment rules in Indonesia, investors must comply with strict capital allocation guidelines per KBLI code and location. Under Head of BKPM Regulation No. 5 of 2025, the minimum total investment for a PT PMA is more than IDR 10 billion (excluding land and buildings) for each 5-digit KBLI code per project location.
The minimum paid-up capital has been reduced from the previous IDR 10 billion to IDR 2.5 billion per PT PMA.
The government sets these thresholds to ensure that FDI is aligned with development objectives: generating large-scale investment, creating jobs, enabling technology transfer, and strengthening domestic industrial competitiveness.
However, this reduction does not affect other related requirements, such as the capital threshold for obtaining an Investor KITAS.
Although the minimum paid-up capital for a Foreign Investment Company (PT PMA) has been lowered to IDR 2.5 billion, the requirement to obtain an Investor KITAS remains set at IDR 10 billion. This is affirmed under Minister of Law and Human Rights Regulation No. 22 of 2023 on Visas and Residence Permits as amended by Minister of Law and Human Rights Regulation No. 11 of 2024 and partially repealed by Minister of Law and Human Rights Regulation No. 3 of 2025, with the following provisions:
Accordingly, only investors with significant capital commitments are entitled to the privilege of long-term residence permits.
Investors with less than IDR 10 billion in capital who wish to stay in Indonesia may apply for a work permit under Minister of Manpower Regulation No. 8 of 2021.
They must pay the Foreign Worker Compensation Fund (DKP-TKA) of USD 100 per month (USD 1,200 per year), in addition to visa, residence permit, and PNBP fees.
While the paid-up capital for establishing a PT PMA is lower, residence permit eligibility remains unchanged — only those investing IDR 10 billion or more are eligible for Investor KITAS or KITAP.
This distinction reinforces the government’s commitment to filtering serious investors from those seeking residence through minimal investment.
Foreign investors must:
In addition to these general obligations, there are also technical and administrative aspects specifically governing company capitalization. The fulfillment of such obligations is not merely individual in nature but also oriented toward the corporate entity as the lawful vehicle of investment in conducting business in Indonesia. In other words, the invested capital does not merely serve as evidence of the investor’s financial commitment but also constitutes an essential instrument to ensure the continuity of a lawful and accountable business.
The government, through the Directorate General of Immigration, is now more aggressive in enforcing compliance against misuse of investor residence permits. Regular inspections are carried out across Indonesia, focusing on foreign nationals engaging in activities beyond the scope of their residence permits.
Furthermore, the government has established the Foreigners Oversight Team, involving both central and regional agencies, to ensure that investment regulations are not only enacted but also effectively enforced in practice.
Violations are subject to strict sanctions, including:
These new investment rules in Indonesia signal a stronger emphasis on ensuring compliance and capital allocation for foreign investors. Businesses must plan their capital structure and compliance strategy carefully if they wish to benefit from Indonesia’s growing market and investor-friendly policies.
Permitindo provides end-to-end assistance — from company establishment and licensing to visa and tax compliance — for investors who meet Indonesia’s official capital requirements.
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