Indonesia’s Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM) introduces new capital and investment requirements for foreign-owned companies under Regulation No. 5 of 2025.
BKPM has officially enacted BKPM Regulation No. 5 of 2025 concerning Business Licensing, Risk-Based Business Licensing, and Investment Facilities. The regulation introduces capital requirements for Foreign Investment (Perusahaan Modal Asing or PMA) companies in Indonesia, setting a minimum paid-up capital of Rp2.5 billion per limited liability company and requiring a 12-month fund lock-up period.
This new regulation also repeals and replaces three previous rules: BKPM Regulations Nos. 3, 4, and 5 of 2021, which previously governed the system and procedures for risk-based business licensing and investment supervision.
Under Article 26 of BKPM Regulation No. 5 of 2025, every business entity categorised as a PMA is classified as a large-scale enterprise and must meet a minimum investment value exceeding Rp10 billion, excluding land and buildings, for each business sector based on the five-digit KBLI (Klasifikasi Baku Lapangan Usaha Indonesia or Indonesian Standard Industrial Classification) code at every project location.
Furthermore, for PMAs established as limited liability companies, the minimum issued and paid-up capital is set at Rp2.5 billion per company. The regulation stipulates that these funds must remain in the company’s account for at least 12 months from the date of deposit, unless utilised for asset purchases, building construction, or operational activities.
BKPM has also introduced specific exceptions to the minimum investment requirement for certain sectors, while maintaining the threshold above Rp10 billion (excluding land and buildings). The sectors covered by these exceptions include:
- Wholesale trade, based on the first four digits of the KBLI;
- Food and beverage services, based on the first two digits of the KBLI per business location;
- Construction services, based on the first four digits of the KBLI, and
- Manufacturing industries producing various products within a single production line.
Through the implementation of this regulation, BKPM reinforces its commitment to strengthening legal certainty and investment discipline, ensuring that foreign investors in Indonesia realise their capital commitments and business operations in accordance with prevailing laws and regulations.
Minimum investment value refers to the lowest total amount of funds that must be invested in a business project as stipulated by regulatory authorities. In the context of foreign investment in Indonesia, this value typically excludes land and buildings and is calculated per business sector and project location based on KBLI. Meanwhile, minimum paid-up capital refers to the minimum amount of capital that must be issued and fully paid by shareholders of a company at the time of establishment or within a specified period.