On 6 October 2025, the Investment Coordinating Board (BKPM) of Indonesia issued Regulation No. 5 of 2025, which consolidates three earlier regulations and introduces a significant change for foreign-owned companies (PT PMA). Under the new rule, the minimum paid-up capital required at incorporation for a PT PMA is now IDR 2.5 billion (approx. USD 150,000), down from the previous IDR 10 billion (approx. USD 600,000).
However, the requirement for a total investment plan remains at more than IDR 10 billion per business activity and location (excluding land/building in most cases).
Why this reform?
- To respond to investor feedback calling for easier entry into the Indonesian market.
- To enhance Indonesia’s competitiveness in attracting foreign direct investment across the ASEAN region.
- To maintain a standard of “large-scale” investment even while lowering the upfront capital barrier.
Implications for investors
- Lower barrier to entry: smaller foreign-owned enterprises or service-oriented firms may find it easier to incorporate.
- Investors must revise their investment plans and ensure compliance with the new regime.
- Additional oversight may follow, including restrictions on the paid-up capital funds (e.g., cannot be withdrawn for non-business purposes within the first 12 months).
