Indonesia’s Positive Investment List

Indonesia’s Positive Investment List is officially the Daftar Prioritas Investasi (DPI) inside Indonesia’s rules on Business Fields for Investment (Bidang Usaha Penanaman Modal / BUPM).

It replaced the old “Negative Investment List” approach by making the baseline “open unless restricted”, then putting restrictions/conditions into annexes tied to KBLI business codes.

What It Is

Indonesia replaced the old Negative Investment List (DNI) with a “Positive Investment List” approach under Presidential Regulation (Perpres) No. 10 of 2021, later amended by Perpres No. 49 of 2021.

The key idea is business fields are generally open, except those that are closed, reserved, or open with conditions (including foreign ownership caps, partnership requirements, licensing, and location restrictions).

For PT PMA planning, DPI is the starting point because it affects:

• whether your KBLI is allowed for foreign ownership,
• how much foreign ownership is permitted (e.g., 100%, 67%, 49%, etc.),
• whether you must partner with UMKM/cooperatives,
• whether you qualify for incentives as a “priority” line.

The Legal Backbone

Core regulations:

• Perpres 10/2021 on Investment Business Fields (Bidang Usaha Penanaman Modal).
• Perpres 49/2021 amending Perpres 10/2021 (important changes in the Annex and certain provisions).

Where the “list” actually lives:

The DPI is mostly implemented via the Annex (Lampiran) of the Perpres, organized by KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) codes.

Priority Sectors under Indonesia’s Positive Investment List

Under Indonesia’s Positive Investment List (Daftar Prioritas Investasi), certain business fields are classified as priority sectors. These sectors receive special attention from the government and may qualify for fiscal and non-fiscal incentives.

To be classified as a priority sector, a business must meet one or more of the following criteria:

• Labor-intensive industries that generate significant employment
• Capital-intensive projects with substantial investment value
• Businesses supporting national strategic projects or programs
• Export-oriented industries
• Pioneer industries, such as renewable energy, oil refining, or metal processing
• Activities utilizing advanced or high-tech solutions
• Businesses that conduct structured research and development (R&D)

Currently, 246 business fields fall under the priority sector category.

Incentives for Priority Sector Businesses

Companies operating in priority sectors are eligible for a combination of fiscal and non-fiscal incentives, depending on the scale and nature of the investment.

Fiscal Incentives

Fiscal incentives may include:

• Corporate Income Tax (CIT) reduction
  • 50% CIT reduction for investments between IDR 100–500 billion for 5 years
  • 100% CIT reduction (tax holiday) for investments above IDR 500 billion, for 5 to 20 years
• Tax allowances, such as:
  • Reduction of taxable income by 30% of total investment over 6 years
  • 10% withholding tax on dividends
  • Loss carry-forward period of up to 10 years

Non-Fiscal Incentives

Non-fiscal incentives may include:

• Provision of supporting infrastructure
• Simplified business licensing
• Priority access to energy supply and raw materials

Examples of Priority Business Sectors and Incentives

Business Fields Open with Specific Requirements or Limitations

Some business fields are open to foreign investment, but subject to specific restrictions or conditions. These typically fall into one or more of the following categories:

• Reserved exclusively for domestic investors
• Subject to foreign ownership caps
• Requiring special licenses from relevant authorities
• Strictly regulated or supervised under sector-specific laws

This category also includes business activities related to alcoholic beverages, which are tightly controlled.

Alcohol-Related Business Lines with Restrictions

• Wholesale trade of alcoholic beverages (importers, distributors, sub-distributors)
• Retail trade of alcoholic beverages
• Street-level retail of alcoholic beverages

Selected Business Fields with Ownership Restrictions

Exceptions to Foreign Ownership Limits

Foreign ownership restrictions do not apply in the following situations:

• Investments located within Special Economic Zones (SEZs)
• Non-direct investments made through the Indonesian Stock Exchange
• Investments covered by bilateral or multilateral treaties granting more favorable treatment
• Investments approved before the issuance of the Positive Investment List (grandfathering policy)

Business Fields Requiring Mandatory MSME Partnerships

Certain business fields are open to foreign or large-scale investors only through compulsory partnerships with MSMEs (Micro, Small, and Medium Enterprises) or cooperatives.

There are 106 business lines under this category, typically characterized by:

• Use of non-advanced technology
• Labor-intensive or culturally rooted activities
• Capital requirements not exceeding IDR 10 billion

Partnership arrangements may take the form of:

• Operational cooperation
• Profit-sharing agreements
• Subcontracting or outsourcing
• Distribution partnerships

This policy aims to integrate MSMEs into larger supply chains while preserving local economic participation.

Business Fields Open to 100% Foreign Ownership

The following sectors are fully open to 100% foreign investment:

• Oil and gas construction and drilling services
• Onshore and offshore oil and gas pipelines
• Electricity generation and installation
• Geothermal power generation
• Supermarkets (under 1,200 sqm)
• Department stores (400–2,000 sqm)
• Ports and port services
• Airports and airport support services
• Maritime cargo handling
• Telecommunications
• E-commerce platforms
• Pharmaceutical manufacturing
• Hospitals

Business Fields Closed to Investment

Indonesia strictly prohibits investment (both domestic and foreign) in the following sectors:

• Class-I narcotics cultivation and production
• Gambling and casino activities
• Fishing of endangered species
• Commercial use of natural corals
• Chemical weapons manufacturing
• Alcoholic beverage manufacturing (including wine and malt-based alcohol)
• Production of ozone-depleting substances and certain industrial chemicals

Minimum “large-scale” investment rule (important for PT PMA)

Perpres 10/2021 elevated a key principle: foreign investors are generally expected to operate at “large-scale”, commonly summarized as minimum investment value of more than IDR 10 billion (excluding land/buildings) per business line/project (implementation details are commonly handled in BKPM/OSS practice and related regulations, but the Perpres level made the concept more explicit).

This matters because it affects feasibility for “small lifestyle businesses” and is one reason many small activities end up better structured via local PT (PMDN) + agreements (depending on legality and substance).

Common misconceptions

• “Positive list means everything is 100% open.”
  Not true. Many lines are open, but conditions/caps still exist and sector rules still matter.
• “If DPI says open, I’m done.”
  Often false. DPI is the starting gate, sector regulators can still impose licensing and operational requirements.
• “KBLI selection is just admin.”
  Wrong. KBLI is the legal identity of what you’re allowed to do in OSS and what foreign ownership rules attach to you.

Where to get the official tables

• BKPM “Indonesia Investment Guidebook” (government guide referencing the framework).