Want to Invest in Indonesia? Answers to the 10 Most Common Questions from Investors

Want to Invest in Indonesia? Answers to the 10 Most Common Questions from Investors

Indonesia

As globalization progresses, an increasing number of Chinese enterprises are choosing to invest in Indonesia. As one of the largest economies in Southeast Asia, Indonesia boasts significant market potential, abundant natural resources, and a gradually improving investment environment, attracting considerable foreign investment. Particularly under the backdrop of the “Belt and Road” initiative and regional economic cooperation, Indonesia has become an ideal destination for Chinese enterprises to expand their business in Southeast Asia.

However, entering the Indonesian market is not without challenges; investors often encounter various issues related to establishing companies, handling import procedures, and tax planning.

To assist Chinese enterprises interested in entering the Indonesian market in better understanding relevant policies and regulations, this article summarizes ten common investment questions and their answers.

10 Questions and Answers

1. What is the minimum capital requirement for foreign investors to establish a company in Indonesia?

The minimum capital requirement for foreign investors to establish a company in Indonesia is typically 100 billion Indonesian Rupiah, excluding land and buildings. If the investment is in specific sectors such as manufacturing, the minimum capital requirement may be 150 billion Indonesian Rupiah. The paid-up capital must be deposited in an Indonesian bank, with each shareholder’s investment being at least 10 million Indonesian Rupiah.

2. Can foreign investors wholly own an Indonesian company?

Whether foreign investors can fully own an Indonesian company depends on Indonesia’s negative investment list (DNI). If a sector is not included in the negative list, foreign capital can hold 100% ownership. The manufacturing sector generally welcomes full foreign ownership, but there may be restrictions in certain areas, such as agriculture and telecommunications.

3. Can foreign investors import used machinery into Indonesia?

Foreign investors can import used machinery, but certain conditions must be met. The imported equipment needs to be repaired or refurbished and must comply with Indonesia’s safety, environmental, and health standards. Importers are also required to provide a commercial invoice, bill of lading, certificate of origin, and other customs clearance documents.

4. What is the maximum foreign ownership ratio in Indonesian department stores?

According to Indonesian Presidential Regulation Perpres49/2021, the maximum foreign ownership ratio in Indonesia’s department store sector is 67%. Although this industry is not explicitly listed as restricted, in practice, the authorities typically require foreign ownership to not exceed this ratio.

5. How can foreign investors apply for duty-free import of production machinery and raw materials (Master List)?

Foreign enterprises wishing to import production equipment and raw materials and enjoy duty-free benefits need to apply for Indonesia’s Master List. Companies must submit detailed information through the online system of Indonesia’s BKPM (OSS official website) and provide necessary documents, with approval usually completed within seven working days.

6. Can all goods be imported and exported in Indonesia?

Indonesia imposes restrictions on the import and export of certain goods. For example, the import of weapons, drugs, and endangered species and their products is prohibited. Certain items, such as cars, used electrical appliances, and motorcycles, must also meet specific Indonesian standards and regulations to be imported.

7. What documents are required for importing and exporting goods?

The documents typically required for importing and exporting goods include a commercial invoice, packing list, certificate of origin, contract, and specific import licenses for certain products. For specific industries such as food and cosmetics, labels and instructions that comply with Indonesian standards must also be provided to ensure compliance with local regulations.

8. Do foreign enterprises in Indonesia enjoy import duty exemptions?

Yes, foreign enterprises can enjoy exemptions from import duties on capital goods such as production equipment and raw materials, depending on the industry and investment amount. Additionally, Indonesia has bonded zones and economic special zones, where foreign enterprises investing in these areas can also receive further tax incentives.

9. What is the personal income tax rate in Indonesia?

The personal income tax rate in Indonesia is progressive based on income levels, ranging from 5% to 35%. The taxable income is calculated as pre-tax wages minus the threshold and social insurance costs, applying the corresponding tax rate to determine the tax payable.

10. Can foreign investors engage in multiple industry projects?

Foreign capital can invest and engage in multiple industry projects in Indonesia, but capital requirements must be met. For example, if operating multiple industries in one region or across multiple regions, the investment amount must meet different requirements. Different industries have varying minimum capital requirements, and investors should carefully plan according to their business development strategy.

Indonesia: A Key Node for Chinese Enterprises’ Internationalization


As a rapidly growing market, Indonesia offers enormous business opportunities, particularly in manufacturing, infrastructure, and the digital economy. As Chinese enterprises gradually increase their investments in Indonesia, understanding local laws and regulations, capital

Wanxinda Holding Group: Supporting China-Indonesia Economic and Trade Cooperation

Wanxinda Holding Group, a comprehensive enterprise group, has developed into a diversified company involved in various fields such as travel goods, outdoor products, urban construction, testing technology, leisure eco-tourism, and industrial parks since its establishment in 1998. The group’s recent key project, the China-Indonesia Dual Parks Batang Industrial Park project, signifies an important step for Wanxinda in implementing the national “Belt and Road” initiative and promoting economic and trade cooperation between China and Indonesia.

Located in Batang Industrial City, Semarang, Central Java, Indonesia, the project is a collaborative development between Wanxinda and Indonesian state-owned enterprises, forming an essential part of the “Dual Parks” initiative between China and Indonesia. Since the signing of the agreement in May 2023, the project has entered the substantial construction phase, with plans to complete the construction of 1 million square meters of factory space by 2025 and attract 1,000 enterprises within the next five years, with a total investment of $12.5 billion, creating 1 million jobs.

The implementation of this project will not only facilitate the rapid establishment of Chinese enterprises in Indonesia but also stimulate local economic development, with 99.3% of the workforce being Indonesian locals. This initiative fully reflects Wanxinda Holding Group’s sense of social responsibility and its commitment to promoting the economic development of both China and Indonesia.

In the context of the continuously strengthening bilateral economic and trade cooperation between China and Indonesia, Wanxinda Holding Group’s China-Indonesia Dual Parks Batang Industrial Park project will inject new vitality into the prosperity and development of both countries.

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