If you are planning to open a business in Indonesia in 2026, it is essential to understand the latest regulatory changes issued under Peraturan Resmi BKPM No. 5 Tahun 2025. Effective 2 October 2025, this regulation reshapes how PT PMA (foreign-owned companies) are established, monitored, and managed through the OSS-RBA (Online Single Submission – Risk Based Approach) system.
In this article, we help break down the major changes and what foreign investors must prepare before starting a company in 2026.
What is BKPM?
The BKPM (Badan Koordinasi Penanaman Modal), now formally integrated into the Ministry of Investment (Kementerian Investasi dan Hilirisasi), is Indonesia’s central government body responsible for coordinating, regulating, and promoting investment activities, both domestic and foreign.
Since its transformation in 2021, the Ministry of Investment/BKPM has held a dual mandate:
- Formulate and oversee investment policies, including business licensing, incentives, and investor services.
- Lead national investment strategies, including Indonesia’s long-term industrialisation and hilirisasi programmes.
What BKPM Does
BKPM is a government agency responsible for:
Issuing Risk-Based Business Licensing (OSS-RBA)
This includes:
- NIB (Nomor Induk Berusaha)
- Business Operational Licenses
- Commercial Licenses
- Investment approvals for PT PMA (foreign-owned companies)
- Monitoring compliance through LKPM (Investment Activity Reports)
Coordinating Investment Projects at National Level
BKPM supports the government’s targets by promoting:
- Foreign Direct Investment (FDI)
- Domestic Direct Investment (DDI)
- Strategic investment partnerships
Implementing Investment Incentives and Facilities
Including:
- Tax holidays
- Tax allowances
- Import duty exemptions
- Investment priority incentives
Monitoring and Enforcing Investment Compliance
BKPM oversees:
-
- Capital realisation
- Project development
- Environmental & spatial compliance
- Sector-specific regulations
Updated BKPM Regulations 2025: Highlights
The investment landscape in Indonesia has undergone important changes with the issuance of BKPM Regulation No. 5 of 2025, which updates the rules for business licensing, capital requirements, and investment implementation under the OSS-RBA system.
These updates directly affect how foreign and domestic companies plan, structure, and manage their investments starting in 2026. Below are the key highlights investors should understand before setting up or expanding a business in Indonesia.
1. New Minimum Capital Requirement: IDR 2.5 Billion for PT PMA
One of the most impactful changes is the reduction of the minimum paid-up capital for PT PMA:
- New capital requirement has been amended to IDR 2.5 billion, previously IDR 10 billion
- This requirement applies to:
- New PT PMA companies (Penanaman Modal Asing)
- Existing PT PMA companies (must adjust to new regulations)
What this means for investors opening a company in 2026:
- Lower cost of entry into Indonesia
- Easier market access for small–medium businesses and startups
- More competitive investment landscape
2. Mandatory 12-Month Capital Lock-Up for PT PMA
A brand-new provision requires that the paid-up capital deposited into the company’s bank account cannot be withdrawn for 12 months, unless used strictly for operational or capital expenditure needs.
Why this matters:
- Investors must prepare realistic financial planning
- Capital authenticity will be monitored
- Compliance documentation must be well-organised
3. API-U to API-P Conversion Allowed for Import Activities
Under new regulation, the implementation of Angka Pengenal Importir (API), the official Importer Identification Number required for companies that import goods into the country.
API-U → API-P conversion is allowed
API-P → API-U conversion is not allowed
This is important for businesses involving imports:
- API-U is for trading imported goods
- API-P is for importing raw materials for its own production
What this means for 2026 investors:
Choosing the correct API licence before starting your business in 2026 is crucial to avoid restrictions later.
4. Revenue-Generating Supporting Activities Must Be Listed in the Articles of Association
If your PT PMA has supporting business activities that generate revenue, these must now:
- Be listed clearly in the Articles of Association (Akta Perusahaan)
- Have the correct KBLI code
- Meet a separate minimum IDR 10 billion Total Investment Value
What this means for 2026 investors:
You must plan KBLI codes in detail before incorporation, general or broad classifications will no longer be accepted.
5. Clear Distinction: Paid-Up Capital vs. Total Investment Value
BKPM Regulation No. 5/2025 finally clarifies two frequently confused requirements:
- Paid-up Capital (Modal Disetor) → IDR 2.5 billion
- Total Investment Value (Nilai Investasi) → > IDR 10 billion per KBLI per project
What this means for 2026 investors:
Even if you meet the paid-up capital requirement, you must still fulfil the minimum investment value for your business lines.
6. F&B Sector Gets More Flexibility
Good news for food & beverage entrepreneurs.
For F&B businesses, the >IDR 10 billion investment requirement applies per city/regency – not per outlet.
Why this matters:
- Easier multi-outlet expansion
- Lower financial burden per branch
- Faster growth for cafés, restaurants, and cloud kitchens
7. Required Declaration of Commercial Operation Timelines
Businesses must now submit realistic start-of-operation dates. BKPM provides sector-specific guidelines to prevent unrealistic submissions.
This helps investors in:
- Consultancy
- Manufacturing
- Retail
- Construction
- Property development
8. Stricter Processes for KKPR, PBG & SLF
For any business requiring land or buildings, procedures are now more detailed:
- KKPR (Spatial Utilisation Confirmation)
- PBG (Building Approval)
- SLF (Certificate of Proper Function)
- On-site inspections are mandatory for SLF issuance.
Impact for 2026:
Expect longer preparation time for property-based or facility-based businesses.
9. New Environmental Screening for ALL Business Types
Even low- and medium-risk businesses must undergo Environmental Screening (Penapisan Lingkungan), which determines whether they need:
- SPPL
- UKL-UPL
- AMDAL
Environmental approvals are now centralised under the Ministry of Environment and integrated into OSS and Amdalnet.
10. Digital Monitoring & Automatic Sanctions Through OSS
The OSS system will now issue automatic administrative sanctions if LKPM (Investment Report) shows zero capital realisation for 4 consecutive quarters. This pushes investors to demonstrate real progress and submit accurate reports.
What These Changes Mean for Opening a Business in Indonesia in 2026
Easier Market Entry
Lower capital requirements make Indonesia more accessible for foreign investors, startups, and SMEs.
More Accountability
The 12-month capital lock-up ensures real investment and discourages fictitious capital declarations.
Clearer, More Transparent Licensing
BKPM’s updated procedures offer clearer expectations for KBLI selection, operational timelines, and environmental requirements.
Higher Compliance Standards
Digital tracking and stricter oversight mean that businesses must prioritise compliance from the moment they register.
Planning to Open a PT PMA in 2026? Lets Move Indonesia Is Here to Help
Since 2016, Lets Move Indonesia has helped thousands of investors navigate:
- PT PMA Setup (Foreign-Owned Company)
- PT PMDN Setup (Local-Owned Company)
- OSS-RBA Licensing
- Import Licensing (API-U / API-P)
- NIB, NPWP, PKP setup
- Business Compliance & LKPM Reporting
- Visa & Work Permit Services
We offer transparent pricing, licensed consultants, and complete end-to-end assistance. Start your business journey in Indonesia with confidence.
Contact Lets Move Indonesia for professional consultation and a clear roadmap tailored to your investment needs for 2026.
