Opening a company with foreign capital in Indonesia has become easier. The minimum paid-up share capital is now reduced from 10 to 2.5 billion rupiahs. The rules changed on October 2, 2025, when the new BKPM (Indonesian Investment Coordinating Agency) Regulation No. 5/2025 came into effect. The document is part of a large-scale reform of the investment system and business licensing, as well as a signal to investors: Indonesia is betting on real capital, not just formal numbers on paper.
The new regulation repeals three previous decrees – No. 3, 4, and 5 of 2021, and completely restructures the Online Single Submission (OSS) platform through which licenses are arranged. The registration process is now simpler, faster, and, as promised by the government, more transparent.
The main change concerns the capital structure. The total investment volume for companies with foreign participation must still be at least 10 billion rupiahs (excluding land and buildings) for each business activity code according to the KBLI classifier. But now from this amount, 2.5 billion rupiahs is sufficient as paid-up share capital. This money must remain in the company's account for at least a year, unless it is used for asset purchases, construction, or operational expenses. The remaining part of the investment can be made in the form of assets – equipment, transportation, production capacities, or research expenses.
If the founders plan to obtain investor KITAS, the requirements are stricter: the minimum share capital in this case must amount to 10 billion rupiahs for each founder, and the paid-up capital must match this amount.
For capital-intensive sectors – wholesale trade, public catering, construction, and production with one production line, the minimum investment volume remains at 10 billion rupiahs, but the calculation rules have become more flexible: the amount depends on the KBLI code and the location of the project. In the real estate, agriculture, and fisheries sectors, land and buildings are now included in the calculation for the first time – previously they were not accounted for.
The government emphasizes that the reform aims not at weakening control but at increasing capital efficiency. The Minister of Investment and Head of BKPM Bahlil Lahadalia notes that the reform should “open the doors for medium-level investors, startups, and export-oriented companies,” for whom previous amounts were unattainable.
At the same time, the reporting system was clarified. Companies with foreign capital are still required to submit LKPM through the OSS-RBA system by the 10th of the month following the reporting period. However, the new regulation specifies that if there are technical failures of the platform or if the deadline coincides with a public holiday, the system can automatically extend the deadline and notify users. Small companies report every six months, while medium and large companies report quarterly. At the same time, all PT PMAs in the OSS system are still classified as large businesses, regardless of turnover or the number of employees.
The list of those exempted from reporting has also been reduced. Now, all companies, including banking, insurance, and oil and gas structures, are required to submit LKPM. Exemption remains only for micro-businesses (capital up to 1 billion rupiahs or annual income up to 2 billion) and projects financed from the state budget.
The authorities speak of shifting to a model of trust-based regulation, where the state grants companies more freedom but maintains control through risk assessment and market behavior. This should reduce bureaucracy and the burden on responsible businesses but speed up the response to violations.
Sources: JDIH BKPM, Mahendra&Co.
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