The Ministry of Investment / Investment Coordinating Board (BKPM) has issued Regulation No. 5 of 2025 on the Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facilities through the Online Single Submission (OSS) System (“Regulation 5/2025”), which came into effect on 2 October 2025. This regulation elaborates on Government Regulation No. 28 of 2025, introducing detailed provisions governing investment scale, licensing procedures, and capital requirements for both domestic and foreign investors. One of the most noteworthy updates in this regulation is contained in Article 26, which redefines the minimum investment value and paid-up capital requirements for foreign investment companies (PT PMA).
Under Article 26 paragraph (1) and (2), a foreign investment company (PMA) is categorized as a large-scale enterprise and must comply with the minimum total investment requirement. The regulation explicitly stipulates that the total investment value must exceed IDR 10 billion, excluding land and buildings, per five-digit KBLI business classification and per project location. This ensures that foreign investment is directed toward substantial and sustainable business activities that contribute meaningfully to Indonesia’s economic growth.
In addition to the minimum total investment value, Article 26 paragraph (9) and (10) introduces a specific requirement on issued and paid-up capital for PMA entities established in the form of limited liability companies (Perseroan Terbatas). Under the new rule, the minimum issued and paid-up capital is set at IDR 2.5 billion per company, unless otherwise stipulated by prevailing laws and regulations.
This new policy aligns with Indonesia’s ongoing efforts to simplify business licensing while promoting genuine capital commitment. By setting the minimum total investment at above IDR 10 billion and the minimum paid-up capital at IDR 2.5 billion, the government ensures that PMA entities remain substantial business players, while still providing flexibility for smaller-scale yet serious investors.
From a compliance perspective, these provisions further emphasize the importance of accurate reporting through the OSS platform. Any change in capital structure, investment amount, or shareholding composition that affects the company’s classification must be updated in OSS within the prescribed timeline. Failure to comply may lead to administrative sanctions, including suspension of licensing access.
Overall, Regulation 5/2025 represents a critical refinement in Indonesia’s investment regulatory landscape. It establishes clear distinctions between total investment value and paid-up capital, reinforcing transparency, consistency, and ease of implementation within the risk-based licensing system. This policy not only enhances investor confidence but also strengthens the credibility of Indonesia’s investment framework in the region.
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Author:
Dewi Susanti