🇮🇩 Indonesia · reviewed 2026-10-09
Can foreigners own a business or franchise in Indonesia?
Yes for most food service, but through a foreign-investment company (PT PMA) with its own capital rules. Those rules eased in October 2025, which changes the arithmetic for brands that want to run their own flagship stores in Jakarta.
Is the business line open?
Check the exact business code (KBLI) for your format against the current annex before incorporating: small food stalls may be treated differently from restaurants.
- Under the Positive Investment List (Presidential Regulation 10/2021 as amended by 49/2021), a business line is open to 100% foreign ownership unless an annex closes it, caps it, reserves it for small businesses or cooperatives, or requires a partnership. Restaurants, bars, cafés and catering have been open to full foreign ownership since 2016 and are understood not to be capped today. Secondary · Makarim & Taira S., Positive Investment List, 2021-03-01
Capital for a foreign-owned company
- Investment Ministry/BKPM Regulation 5/2025, in force since October 2025, replaced Regulation 4/2021 and cut the minimum paid-up capital of a PT PMA from IDR 10 billion to IDR 2.5 billion. The paid-up capital must stay in the company's account for 12 months unless spent on capital or operating costs. Secondary · A&O Shearman on BKPM Reg. 5/2025, 2025-10-01
- The minimum investment value is still above IDR 10 billion per five-digit business code (KBLI) per project location, excluding land and buildings. For food and beverage, the location is counted at regency or city level. Secondary · A&O Shearman on BKPM Reg. 5/2025, 2025-10-01
Contracts and language
- Law 24/2009 requires Bahasa Indonesia in agreements with an Indonesian party; a foreign-language version may be added. Supreme Court Circular 3/2023 says a contract without an Indonesian version is not automatically void unless bad faith is proven, so bilingual agreements are the safe course. Secondary · Hogan Lovells on SEMA 3/2023, 2024-02-16
- PP 35/2024 requires the franchise agreement to be governed by Indonesian law. Secondary · Hogan Lovells on SEMA 3/2023, 2024-02-16Secondary · Linklaters, 10 things on PP 35/2024, 2024-10-04
Structures franchisors use
- Master franchise to an Indonesian-owned company: no foreign-investment capital rules apply to the franchisor, but the master franchisee needs its own STPW.
- PT PMA running company-owned flagships, with franchising to local partners for the rest of the country.
- Joint venture with a local partner, where the business code and partner's shareholding allow it.
More on Indonesia
Franchising in Indonesia: the 2027 guide for foreign franchisorsFranchising into Indonesia under PP 35/2024: STPW registration, the 14-day prospectus, foreign ownership, trademarks and royalty tax, with sources.Franchise law and registration in IndonesiaIndonesia's franchise law PP 35/2024 explained: franchisor criteria, STPW registration, the 14-day prospectus, annual reporting and sanctions.Trademarks and IP for franchisors in IndonesiaProtecting a franchise brand in Indonesia: first-to-file trademarks, licence recording with DGIP, and why PP 35/2024 needs a registered mark.Tax on royalties and franchise fees in IndonesiaIndonesian tax on franchise royalties paid abroad: 20% Article 26 withholding, treaty relief under PMK-112/2025, and VAT self-assessed by the franchisee.Finding a master franchisee in IndonesiaHow to find and vet a master franchisee in Indonesia: STPW duties for master franchisees, the prospectus they must give, and a vetting checklist.ASEAN franchise law comparatorSeven ASEAN markets side by side, from Vietnam to Singapore, with sources.