Indonesia Lowers Paid-Up Capital Requirement for Foreign Investors

Date: October 2025
Source: Indonesian Ministry of Investment / BKPM (Regulation No. 5 of 2025)

What’s Changing

• The Indonesian government has reduced the minimum paid-up capital requirement for a foreign-owned limited liability company (Perseroan Terbatas Penanaman Modal Asing/PT PMA) from IDR 10 billion (approx. USD 640,000) to IDR 2.5 billion (approx. USD 160,000). investmentpolicy.unctad.org+1
• Importantly, the minimum investment value plan of IDR 10 billion per business field (KBLI classification) remains unchanged. business-indonesia.org+1
• The regulation also includes a 12-month lock-up period for the paid-up capital: the funds must remain in the company’s account for at least 12 months unless legitimately used for operational or capital-expenditure purposes. business-indonesia.org

Why It Matters

• This change mitigates one of the longstanding entry barriers for foreign investors in Indonesia, the large upfront capital deposit required for incorporation.
• For mid-sized enterprises, service-industry firms, and “capital-light” business models, the lower paid-up capital threshold substantially improves liquidity flexibility in the initial stage of operations.
• The unchanged investment-value threshold signals that Indonesia continues to target growth-oriented and scale projects, even while easing upfront capital demands.
• Canadian and global firms now have clearer access into Indonesia’s market, but must still align with the minimum investment framework and ensure compliance under the OSS-RBA system.

MGA View

This reform is a strategic inflection point for Canada-Indonesia business engagement:
By lowering the paid-up capital barrier, Indonesia is proactively improving its attractiveness for foreign direct investment, especially in sectors where upfront asset intensity is low (e.g., services, digital economy, platforms). For Canadian firms exploring Southeast Asia, this means a sharper entry value proposition: smaller initial capital commitment, combined with the established framework of Indonesia’s growth market and gateway into ASEAN.
However, the caveat remains: the minimum investment value per business field is still IDR 10 billion, and the lock-up and compliance obligations must be managed carefully. Firms should therefore assess not only entry cost but the full “capital plus strategic commitment” package. MGA can assist by mapping your partner, structure, licensing, and local compliance strategy.

📩 For tailored support or project-scoping in Indonesia, contact us at: https://meridiangateadvisory.com/contact/