Setting Up a Company in Indonesia as a Foreigner
Setting up a company in Indonesia as a foreigner requires establishing a limited liability company with foreign ownership, known as
Indonesia has become one of the most attractive investment destinations in Southeast Asia. The reasons for setting up a business in Indonesia are clear: a large and growing market, strategic regional access, supportive government policies, abundant resources, and a young, productive workforce.
For companies seeking long-term growth in Asia, Indonesia offers both strong domestic demand and international expansion opportunities.
One of the main reasons for setting up a business in Indonesia is its massive consumer base.
With a population exceeding 270 million people and a rapidly expanding middle class, Indonesia offers increasing purchasing power across sectors such as retail, healthcare, digital services, food and beverage, manufacturing, and lifestyle products.
The country has demonstrated steady economic growth over the years, making it attractive for investors seeking stable long-term returns. A large working-age population supports productivity and future demand growth.
Urban centers such as Jakarta, Surabaya, Bandung, and Medan continue to expand, creating strong commercial ecosystems across multiple industries.
Read more: Types of Foreign Business Forms in Indonesia
Indonesia is the largest digital and e-commerce market in Southeast Asia. High smartphone penetration and strong internet usage have fueled rapid growth in:
Jakarta has emerged as a regional technology hub, attracting venture capital and supporting high-growth startups. For digital entrepreneurs, Indonesia presents a rare combination of scale, adoption speed, and demographic advantage.
The digital economy continues to expand, creating opportunities not only for technology companies but also for traditional businesses adopting digital transformation strategies.
Indonesia’s geographic position along major global shipping routes connects East Asia, South Asia, the Middle East, and Australia. This strategic location minimizes transportation costs and enhances access to regional markets.
As a member of ASEAN, companies established in Indonesia can access a combined regional market of over 660 million consumers under preferential trade arrangements.
Many goods traded within ASEAN qualify for reduced or zero tariffs when meeting origin requirements.
Indonesia also maintains trade agreements with key economies such as China, Japan, South Korea, India, Australia, New Zealand, and the European Free Trade Association.
The Indonesia–EU Comprehensive Economic Partnership Agreement has been signed and is targeted to take effect after ratification, which is expected to further strengthen trade and investment flows with Europe.
For manufacturers and distributors, Indonesia offers both export advantages and access to one of the region’s largest domestic markets.
Another important reason for setting up a business in Indonesia is the government’s active support for investment.
Indonesia replaced its previous Negative Investment List with the Investment Positive List based on Presidential Regulation No. 10 of 2021 concerning Investment Business Fields as amended by Presidential Regulation No. 49 of 2021, opening many sectors to greater foreign participation.
Numerous industries are now open to full foreign ownership, including distribution, healthcare services, tourism and hospitality, e-commerce, selected manufacturing activities, and renewable energy components.
The Online Single Submission system has centralized licensing procedures, simplifying company registration and business permits based on risk classification.
The government also offers incentives in strategic sectors and regions, including:
Large-scale infrastructure projects in ports, roads, airports, and digital connectivity further strengthen supply chain efficiency across the archipelago.
Indonesia has maintained political stability, providing a predictable environment for business planning and long-term investment.
Read more: The Impacts of Indonesia’s Omnibus Law on Foreign Investors
Indonesia has a large pool of skilled and semi-skilled labor at competitive costs compared to many developed markets and some regional peers.
The country’s young demographic structure provides a productive workforce capable of supporting manufacturing, services, technology, and infrastructure development.
In major cities, many professionals have functional English skills, especially in finance, technology, and international business sectors. This makes communication smoother for foreign investors while maintaining cost efficiency.
Indonesia is rich in natural resources such as oil, gas, coal, palm oil, nickel, tin, copper, and gold. The government encourages downstream processing to increase domestic value addition, particularly in mineral processing and electric vehicle supply chains.
Manufacturing remains a key pillar of the economy, including:
Other high-potential sectors include:
Special Economic Zones and industrial estates support industrial expansion with improved infrastructure and regulatory incentives.
Foreign investors typically establish a Foreign Investment Company known as a PT PMA. This structure allows full operational control, long-term presence, and the ability to legally hold business assets and obtain licenses under Indonesian law.
Careful market research, understanding of local regulations, and cultural adaptation are essential when entering the Indonesian market. Working with experienced local advisors can significantly reduce compliance risks and setup delays.
The key reasons for setting up a business in Indonesia include its large and growing consumer market, strategic regional access, supportive government reforms, competitive workforce, strong digital expansion, and abundant natural resources.
For businesses seeking growth in Southeast Asia, Indonesia offers scale, opportunity, and long-term potential. With the right preparation and professional guidance, it can become a powerful base for both domestic success and regional expansion.
Setting up a business in Indonesia requires proper structuring, licensing through the OSS system, compliance with the Investment Positive List, and accurate documentation.
BaliEasy provides end-to-end support for:
BaliEasy focuses on clarity, compliance, and long-term business stability. With transparent pricing and dedicated support, BaliEasy helps you establish your company efficiently and in full accordance with Indonesian regulations.
Setting up a company in Indonesia as a foreigner requires establishing a limited liability company with foreign ownership, known as
Understanding the Key Differences The Indonesian government continues to encourage foreign investors to invest in Indonesia. Foreign investment plays an
📌 How It Works: