Section B.
1. Sector: All Sectors
Sub-Sector: Acquisition or Lease of Land
Industry Classification
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central and Regional
Source of Measure: Article 33 of 1945 National Constitution - Law No.5 of 1960 Concerning Basic Regulations on Agrarian Principles - Government Regulation No. 40 of 1996 Concerning The Right of Cultivation of Land, The Right of Use of Structures, and The Right of Use of Land - Government Regulation No. 103 of 2015 concerning Residence or Housing Ownership for Foreigners Domiciled in Indonesia.
Description: Investment
The right of ownership of land (hak milik) is restricted to Indonesian nationals only. Note: Notwithstanding the above, foreign nationals and foreign companies incorporated and domiciled in Indonesia may acquire land and property on the basis of the following rights: a. Leasehold (hak guna usaha), granted to a foreign company for a maximum period of 35 years and may be extended for a further period of 25 years. b. Building rights (hak guna bangunan), granted to a foreign company for a maximum period of 30 years and may be extended for a further period of 20 years c. Right of use (hak pakai) granted to: (1) a foreign national for a maximum period of 30 years and may be extended for a further period of 20 years; (2) a foreign company for a maximum period of 25 years and may be extended for a further period of 20 years. d. Right of lease (hak sewa), granted to a foreign national or a foreign company for a definite period as may be agreed by the parties. Such acquisitions of land and property must be approved by the relevant authority, subject to such conditions and restrictions as may be imposed by that authority.
2. Sector: All Sectors
Sub-Sector: Registration Requirements for the Establishment of Foreign Investment
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Law No. 25 of 2007 Concerning Investment - Law No. 20 of 2008 Concerning Micro, Small and Medium Enterprises - Law No. 23 of 2014 Concerning Local Government - Ministry of Industry Regulation No. 64 of 2016 Concerning Amount of Worker and Investment for Industrial Business Classification - Investment Coordinating Board Regulation No. 13 of 2017 Concerning Guidelines and Procedures for Capital Investment Licensing and Facilities.
Description: Investment
Foreign investment (3) shall have a total investment value of more than IDR 10 billion (excluding land and buildings), unless required otherwise by the specific sector in accordance with Indonesia’s laws and regulations. In the case of large businesses in the industrial sector as defined in the relevant regulation, foreign investment shall have a total investment value of more than IDR 15 billion (including land and buildings).
3. Sector: All Sectors
Sub-Sector:
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Law No. 25 of 2007 Concerning Investment - Law No. 40 of 2007 Concerning Limited Liability Company.
Description: Investment
Foreign investment shall be in the form of a limited liability company based on the law of Indonesia. A foreign investor (4) organised under the laws of another country seeking to make an investment in Indonesia must establish an Indonesian limited liability company (‘Perseroan Terbatas’) in accordance with Law No. 25 of 2007 Concerning Investment.
4. Sector: All Sectors
Sub-Sector:
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Ministry of Trade issued Regulation No. 22 of 2016 on General Provisions on the Distribution of Goods - Ministry of Trade Regulation No. 11 of 2006 on Provisions and Procedures of Issuance of Agents or Distributor of Goods and/or Services Registration.
Description: Investment
Foreign investment shall appoint local distribution agents to sell its products to end-users in Indonesia. For greater certainty, “foreign investment” means a foreign investor or a legal entity established as ‘Perseroan Terbatas’ in accordance with the Source of Measures listed under entry 3.
5. Sector: All Sectors
Sub-Sector:
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4) Senior Management and Board of Directors (Article 14.10)
Level of Government: Central
Source of Measure: Law No. 13 of 2003 Concerning Manpower - Presidential Decree No. 72 of 2014 Concerning the Employment of Expatriates and the Implementation of Education and Training for Labour Companion - Ministry of Manpower and Transmigration Decree No. 40 of 2012 Concerning Certain Positions that are Restricted for Foreign Workers - Presidential Regulation No. 20 of 2018 Concerning the Employment of Expatriates (not yet in force).
Description: Investment
Foreign investments established under Indonesia’s Corporate Law must have positions related to personnel affairs to be occupied by Indonesian nationals. Based on the understanding that each foreign investment company established under Indonesia’s Corporate Law may have different structures and job descriptions, the determination of positions to be occupied by Indonesian nationals shall be decided on a case-by-case basis.
6. Sector: Fishery
Sub-Sector: Capture Fisheries
Industry Classification: ISIC 0500
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Law No. 31 of 2004 as amended by Law No. 45 of 2009 Concerning Fishery - Law No. 5 of 1983 Concerning Indonesia’s Exclusive Economic Zone - Presidential Regulation of The Republic of Indonesia No. 44 of 2016 Concerning Lists of Business Fields That Are Closed to Investment and Business Fields That Are Conditionally Open For Investment - Regulation of the Minister of Marine Affairs and Fisheries of the Republic of Indonesia No. PER.05/MEN/2008 as amended by No. PER.12/MEN/2009 regarding Capture Fishery Business. - Government Policy.
Description: Investment
Capture fisheries in Indonesia are prohibited for foreign investors.
7. Sector: Mining & Quarrying
Sub-Sector:
Industry Classification: ISIC 1429
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Law No. 4 of 2009 Concerning Mineral and Coal Mining - Presidential Regulation of The Republic of Indonesia No. 44 of 2016 Concerning Lists of Business Fields That Are Closed to Investment and Business Fields That Are Conditionally Open For Investment.
Description: Investment
Foreign investors are prohibited from establishing or operating businesses in Sea Sand Extraction.
8. Sector: All Sectors
Sub-Sector: Public Enterprise
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4) Senior Management and Board of Directors (Article 14.10)
Level of Government: Central
Source of Measure: Government Regulation No. 13 of 1998 Concerning Public Enterprise - Administrative Guidelines.
Description: Investment
National Treatment and Senior Management and Board of Directors shall not apply in the event where activities restricted to designated enterprises (5) are liberalised to those other than the designated entities, or in the event where such designated enterprises no longer operate on a non-commercial basis.
9. Sector: All Sectors
Sub-Sector:
Industry Classification:
Obligations Concerned: National Treatment (Article 14.4) Senior Management and Board of Directors (Article 14.10)
Level of Government: Central
Source of Measure: Presidential Regulation of The Republic of Indonesia No. 44 of 2016 Concerning Lists of Business Fields That Are Closed to Investment and Business Fields That Are Conditionally Open For Investment.
Description: Investment
For companies/projects that are in existence prior to the date of entry into force of this Agreement, conditions imposed in their approvals for licenses/permits shall continue to apply. Any changes to these conditions shall be subject to approval.
10. Sector: Manufacturing
Sub-Sector:
Industry Classification: ISIC (see below)
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Law No. 25 of 2007 Concerning Investment - Law No. 39 of 2014 Concerning Plantations - Presidential Regulation of The Republic of Indonesia No. 44 of 2016 Concerning Lists of Business Fields That Are Closed to Investment and Business Fields That Are Conditionally Open For Investment - Presidential Decree No. 21 of 2001 Concerning Lubricant Supply and Services - Regulation of the Minister of Agriculture No. 98 of 2013 Concerning Guidance of Plantation Business License j.o Regulation of the Minister of Agriculture No. 29 of 2016 on the Amendment of Regulation No. 98 of 2013 - Government Policy.
Description: Investment
Foreign investors are prohibited from establishing the following lines of business in Indonesia:
a. Reserved for Micro, Small, and Medium Enterprises:
• Manufacturer of the following agricultural products with an equal or exceeding a certain capacity limit as stipulated in the Regulation of the Minister of Agriculture No. 98 of 2013 and No. 29 of 2016:
- Dried clove buds; crude vegetable and animal oils; copra, fiber, coconut shell charcoal, dust, nata de coco; coconut oil; palm oil; cotton fiber; cotton seeds; peeling, cleaning, drying, and sorting of plantation products (cocoa beans and coffee beans); cashews for dried cashew nut and cashew nut shell liquid (CNSL); peppercorns for dried white peppercorns and dried black peppercorns; cane sugar, sugar cane top and sugar cane bagasse; black tea/green tea; dried tobacco leaves; rubber for sheets, concentrated latex; rude jatropha oil (ISIC 0111, 0140, 1513, 1514, 1531, 1542, 1549, 1600, 2429, 2519)
• Fish processing: boiling of fish (ISIC 1512)
• Manufacture of processed food from soybean in form of tempeh and tofu (ISIC 1513, 1514, 1549)
• Manufacture of foods from soybeans and beans other than soy sauce, tempeh, and tofu (ISIC 1513, 1549)
• Manufacture of perishable prepared cakes (ISIC 1513, 1514, 1549)
• Manufacture of crackers (krupuk), flakes (keripik), fried and flavoured biscuits (peyek) and the likes (ISIC 1513, 1514, 1549)
• Manufacture of palm sugar/Javanese sugar/red sugar (ISIC 1542)
• Milling (peeling and cleaning) or roots and tubers (ISIC 0140, 1531)
• Thread coloring from natural and artificial fiber to be patterned/dipped/tied thread, performed by hand-work tools (ISIC 1711)
• Fabrics printing industry (ISIC 1712, 1729)
• Hand painted Batik industry (ISIC 1712, 1729)
• Knitted cloth industry especially Lace (ISIC 1730)
• Moslem woman's praying cloth, scarf, head scarf, and other traditional industries (ISIC 1810)
•Embroidery industry (ISIC 1729)
• Handicrafts industry: Rattan and bamboo plait industry; Plait industry with plant other than rattan and bamboo; Carving handicraft from wood, except furniture industry; Kitchen household industry from wood, rattan and bamboo; Wood, rattan, cork products industry that is not classified elsewhere (ISIC 2029, 3699)
•Traditional musical instruments (ISIC 3692)
• Rubber curing industry (ISIC 2519)
• Clay made household necessities industry especially pottery (ISIC 2691)
• Hand-tools industry needed for farming to prepare land, process production, post-harvest and processing except hoe and shovel (ISIC 2893)
• Manual or semi mechanical processed hand tool industry for handwork and cutting (ISIC 2893)
• Maintenance and repair of motorcycles other than those integrating with sale of motorcycles (agents/distributor) (ISIC 5040) Repair of personal and household goods (ISIC 3610, 5260)
• Primary industry of forests products processing: Pine Sap (Oleo Pine Resin) and Bamboo (ISIC 0200)
• Saw Mill or Lumbering industry with production capacity of below or equal to 2.000 M3/year
• Primary industry of processing rattan (ISIC 2010)
b. 100% Domestic Equity Participation:
• Industry of main equipment for defense and security (ISIC 2520, 2893, 2927, 2929, 3530, 3610)
• Traditional medicines and natural extracts processing and industry (ISIC 2423).
11. Sector: Agriculture
Sub-Sector:
Industry Classification: ISIC (see below)
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: - Law No. 39 of 2014 Concerning Plantations - Law No. 18 of 2009 Concerning Livestock and Animal Health and Law No. 41 of 2014 Concerning the Amendment to Law No. 18 of 2009 - Law No. 41 of 1999 Concerning Forestry - Law No. 5 of 1990 Concerning Conservation of Natural Resources and Its Ecosystems - Government Regulation No. 6 of 2007 as amended by Government Regulation No. 3 of 2008 Concerning Forest Administration and Compilation of Forest Management Planning and Utilization of Forest - Government Regulation No. 8 of 1999 Concerning Utilization of Plant and Wild Animal Species Government Regulation number 18 of 2010 Concerning Plant Cultivating Business - Presidential Regulation of The Republic of Indonesia No. 44 of 2016 Concerning Lists of Business Fields That Are Closed to Investment and Business Fields That Are Conditionally Open For Investment - Government Regulation No. 44 of 1995 Concerning Seeding of Plantations - Agriculture Minister Regulation No. 98 of 2013 Concerning Guidance of Plantation Business License Jo. Agriculture Minister Regulation No. 21 of 2017 Concerning the Second Amendment of Regulation No. 98 of 2013 - Agriculture Minister Decree No. 404 of 2002 Concerning Guidelines for License and Registration on Livestock Sector - Agriculture Minister Regulation No. 70 of 2014 Concerning Licensing Guidelines for Horticulture Cultivation - Agriculture Minister Regulation No 2 of 2009 Concerning Guidelines of Veterinary Medical Services - Agriculture Minister Regulation No. 39 of 2010 Concerning the Guidelines on Business Licensing for Staple Crops Cultivation - Government Policy.
Description: Investment
Foreign investors are prohibited from establishing the following lines of business in Indonesia:
a. Reserved for Micro, Small, and Medium Enterprises:
- For each individual crop cultivation in an area less than 25 hectares:
• Staple food crops (rice, corn, soybeans, groundnuts, green beans, cassava and sweet potatoes) and other food crops not classified elsewhere (ISIC 0111, 0112, 0113, 0200).
- For each individual plantation seeding business in an area less than 25 hectares:
• Jatropha curcas, other sweetener crops, sugar canes, tobacco, textile raw materials and cotton, other crops not elsewhere classified, cashews, coconut palms, oil palms, beverage crops (tea, coffee, and cocoa), peppercorns, cloves, essential oil crops, medicinal pharmaceutical crops (other than horticulture), other spice crops, rubber and other trees for extraction of sap (ISIC 0111, 0112, 0113, 0200).
- For each individual plantation business in an area less than 25 hectares:
• Other sweetener crops, sugar cane, tobacco, textile raw materials and cotton, cashews, coconut palms, oil palms, beverage crops (tea, coffee and cocoa), peppercorns, cloves, essential oil crops, medicinal/pharmaceutical crops other than horticulture, other spice crops, rubber and other trees for extraction of sap, other plantation farming (ISIC 0111, 0112, 0113, 0200)
- Swine breeding and farming with quantity of less than or equal to 125 heads (ISIC 0122).
- Breeding and farming of native chicken “ayam buras” and its cross breeding and farming (ISIC 0122).
12. Sector: Forestry
Sub-Sector:
Industry Classification: ISIC (see below)
Obligations Concerned: National Treatment (Article 14.4)
Level of Government: Central
Source of Measure: Law No. 41 of 1999 Concerning Forestry - Law No. 5 of 1990 Concerning Conservation of Natural Resources and Its Ecosystems - Government Regulation No. 6 of 2007 as amended by Government Regulation No. 3 of 2008 Concerning Forest Administration and Compilation of Forest Management Planning and Utilisation of Forest - Government Regulation No. 36 of 2010 Concerning Natural Tourism Concession in the National Park Utilisation Zone, Grand Forest Park, Nature Tourism Park - Government Regulation No. 8 of 1999 Concerning Utilisation of Plant and Wild Animal Species - Presidential Regulation of The Republic of Indonesia No. 44 of 2016 Concerning Lists of Business Fields That Are Closed to Investment and Business Fields That Are Conditionally Open For Investment - Government Policy.
Description: Investment
Foreign investors are prohibited from establishing the following line of businesses in Indonesia :
a. Reserved for Micro, Small, and Medium Enterprises:
• Exploitation of other forest plants (sugar palms, candlenuts, tamarind seeds, charcoal raw materials, cinnamon) (ISIC 0200)