Establishing a Foreign Investment Limited Liability Company (PT PMA) is the most common way for foreign investors to start a business in Indonesia. However, before deciding on a business activity, one important step should never be overlooked: verifying whether the selected KBLI code is open to foreign ownership.
Not every business sector in Indonesia allows 100% foreign ownership. Some KBLI codes are restricted or closed for PT PMA, while others may require compliance with specific regulations, such as foreign ownership limits or mandatory partnerships with cooperatives or Micro, Small, and Medium Enterprises (MSMEs).
So, how can investors determine whether a business sector is open to foreign investment? Here's what you need to know.
- What Is KBLI?
- Are All KBLI Codes Open to PT PMA?
- Business Sectors Closed to PT PMA
- Business Sectors with Foreign Ownership Restrictions
- How to Check Whether a KBLI Code Is Open to Foreign Investment
- 1. Identify the Appropriate KBLI Code
- 2. Review Investment Requirements
- 3. Verify Through the OSS System
- 4. Consult an Investment Expert
- Why Is Checking the KBLI Code Important?
- Tips for Choosing the Right KBLI Code
- Conclusion
KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) is Indonesia's official business classification system. It categorizes all business activities and serves as the basis for company registration and licensing.
Every company must select the appropriate KBLI code when applying for a Business Identification Number (NIB) through Indonesia's Online Single Submission (OSS) system. The government currently uses the KBLI 2025 as the latest reference for new business registrations.
Choosing the correct KBLI code affects several important aspects of your business, including:
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Although Indonesia has significantly liberalized its investment policies in recent years, several business sectors remain:
These provisions are regulated under Presidential Regulation No.10 of 2021, as amended by Presidential Regulation No.49 of 2021 concerning Investment Business Sectors.
Read More: KBLI 2025 Update for Foreign Investors: Don’t Mess Up the Code, It Can Slow Everything Down!
Some business activities are completely closed to investment because they are prohibited by law or considered strategic for national interests.
Examples include:
In addition, Presidential Regulation No. 49 of 2021 classifies several alcoholic beverage industries as closed to investment, including:
Besides entirely closed sectors, many business activities remain open to PT PMA, subject to certain conditions.
These conditions may include:
As a result, two PT PMA companies operating in different industries may be subject to different foreign ownership rules depending on their respective KBLI codes.
Before incorporating a company, foreign investors should complete the following steps.
Ensure that your planned business activities match the correct KBLI classification.
Determine whether the selected KBLI code is:
Indonesia's OSS platform provides information regarding business classifications, risk levels, licensing requirements, and applicable regulations based on the selected KBLI code.
If your company operates multiple business activities or belongs to a highly regulated industry, consulting an experienced licensing consultant can help ensure full compliance with Indonesian investment regulations.
Selecting the wrong KBLI code may result in several complications, including:
For these reasons, verifying your KBLI code should be one of the first steps before establishing a PT PMA.
Read More: Most Popular PT PMA Business Types for Foreign Investors in Bali
To ensure a smooth investment process, consider the following recommendations:
Understanding KBLI codes that are restricted or closed for PT PMA is an essential step for anyone planning to invest in Indonesia. While most business sectors are now open to foreign investment, some industries remain prohibited or subject to specific ownership and regulatory requirements.
Ensuring that your chosen KBLI code aligns with your business plan and Indonesia's foreign investment regulations can help prevent licensing issues, incorporation delays, and compliance risks in the future.
If you are unsure which KBLI code best suits your business or need guidance on Indonesia's latest investment regulations, Pandara Prima is here to help. Our experienced team provides end-to-end support, from investment consulting and PT PMA incorporation to KBLI selection and business licensing, making your investment journey in Indonesia faster, easier, and fully compliant with local regulations.