The Government has recently released Investment Regulation* (the Regulations), as one of the implementing part of the Job Creation Law** to stimulate investment in Indonesia for both locals and foreigners.

The Job Creation Law provides that any area may be invested in by the general public other than six specified areas, which include administrative and/or defense security.

The Regulations categorize types of investments into priorities, which are then supported by the government in different ways including by financial incentives. Two of the high priority categories that are specifically supported with government incentives are high tech business/research and development and innovation. Investment in these areas will benefit from government incentives including tax holidays, tax allowance, ease of licensing, etc.

The Regulations also provide allocated businesses with cooperatives or with micro, small, and medium enterprises (MSMEs) which include, among other things, investment in areas that do not have technology as its sole purpose. On the other hand, the partnership with MSMEs for example, investments to scale up supply chains.

While all areas (other than the six specified in the Regulation) are open for investment, there are some limitations, such as, on foreign investment or minimum domestic capital investment. For example, the minimum investment allowed in any investment is Rp 10 billion (approx. USD 71,000) though this minimum is waived for investment in technology start-ups that are located in special economic zones.

The Regulations replace the previous Presidential Regulation on the topic, known as the Negative Investment List (DNI).

*Presidential Regulation No. 10/2021 on Investment Business Sector
**Law No. 11/2020 on Job Creation law