Other BriefingsWhich Sector-Specific Licenses Do Foreign Investors Need in Indonesia?
Foreign investors establishing a company in Indonesia may need sector-specific approvals before operations can begin. The requirements depend on the company’s activities under the Indonesian Standard Industrial Classification (KBLI) 2025, their risk level, and any additional rules for the relevant sector.
How sector-specific licensing works in Indonesia
Indonesia’s business licensing system links each business activity to a KBLI 2025 classification and corresponding risk level. These determine the core licensing requirements processed through the Online Single Submission (OSS) system.
Depending on the activity, a company may also need supporting business licenses (PB-UMKU), certificates, registrations, product approvals, or authorizations from the relevant ministry or regulator. OSS currently lists PB-UMKU across sectors including industry, health, food and drugs, tourism, transportation, communications, agriculture, and energy.
Which sectors require additional licenses or approvals?
Manufacturing and industrial activities
Manufacturing requirements depend on the products being produced, the production process, and the facility from which the company operates. Environmental approvals and technical or product standards may apply, while certain goods require registration, certification, or approval before they can be manufactured, imported, distributed, or sold.
Two manufacturers with similar facilities can therefore face different licensing requirements depending on what they produce. For example, medical equipment manufacturing can carry product distribution approvals and manufacturing standards that do not apply to an ordinary manufacturer.
Construction and engineering
Construction companies face requirements based on the services they intend to provide and the classification and qualification requirements for those services. Business entity certification, professional competency requirements, and qualified technical personnel can form part of the licensing structure.
These requirements can determine which projects a foreign-invested construction company is qualified to bid for or perform.
Healthcare, pharmaceuticals, food, and regulated products
Healthcare and regulated-product businesses may need separate approvals for the company, its products, and its facilities.
Pharmaceuticals, medical devices, processed foods, cosmetics, and healthcare facilities may be subject to separate registration, certification, distribution, or operating requirements. A company authorized to conduct the underlying business activity may therefore still need approval before a particular product can be sold or a regulated facility can operate. OSS, for example, lists multiple product and production approvals for certain processed-food activities.
Tourism, hospitality, transport, and logistics
Licensing in tourism, accommodation, transport, and logistics depends on the service being provided. Requirements for hotels, travel businesses, freight operators, warehouses, and transportation companies can differ according to the facility, mode of transport, and operating model.
This is particularly relevant where one company intends to combine several services. Each activity may carry separate licensing requirements even when the services form part of the same commercial operation.
Telecommunications and digital activities
Operating through a digital platform does not by itself make a business subject to telecommunications licensing.
The licensing distinction is based on the regulated activity the company performs rather than simply the technology or digital platform used to deliver it.
Financial services
Banking, insurance, financing, securities, investment management, digital financial assets, and certain financial technology activities can require authorization from the Financial Services Authority (OJK).
Energy and natural resources
Licensing requirements in electricity, renewable energy, mining, and oil and gas depend heavily on the company’s role in the project.
An operator, developer, contractor, service provider, and equipment supplier can face different licensing requirements even when they participate in the same project. OSS illustrates this distinction in geothermal activities, where different stages and supporting activities carry their own requirements.
How licensing requirements affect the investment structure
Sector licensing can materially change the capital required to establish or operate an Indonesian business.
Under Indonesia’s current investment rules, a PT PMA generally requires at least IDR 2.5 billion (US$143,000) in issued and paid-up capital per company, while its planned investment generally must exceed IDR 10 billion (US$570,000) per five-digit KBLI activity per project location, excluding land and buildings in most sectors. Certain regulated sectors, including financial services, can impose higher or separate capital requirements under their sector-specific rules.
The IDR 10 billion investment threshold is calculated differently for some business activities. For wholesale trade, the threshold is calculated per the first four digits of the KBLI, while food and beverage services use the first two digits per location and construction services use the first four digits. Manufacturing activities producing different products within one production line are also subject to a specific calculation rule.
If a company plans several revenue streams, its KBLI classifications and sector requirements can affect whether all of them can operate through the same PT PMA.
Adding new business activities after establishment
Expanding an existing PT PMA into a new activity can introduce a different risk classification, sector-specific approvals, certifications, facility requirements, technical personnel requirements, or higher capital commitments.
The company may also need to update its corporate and OSS records.
Dezan Shira & Associates can support business licensing in Indonesia
Dezan Shira & Associates assists foreign investors in identifying the licenses and approvals required for their business activities in Indonesia and supporting the application process. Contact us to discuss the licensing requirements for your proposed investment or existing Indonesian operations.
About Us
ASEAN Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Jakarta, Indonesia; Singapore; Hanoi, Ho Chi Minh City, and Da Nang in Vietnam; and Kuala Lumpur in Malaysia. Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Mongolia, Dubai (UAE), Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
For a complimentary subscription to ASEAN Briefing’s content products, please click here. For support with establishing a business in ASEAN or for assistance in analyzing and entering markets, please contact the firm at asean@dezshira.com or visit our website at www.dezshira.com.
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