New Rules Requiring Foreign Direct Investment Companies to Have at least IDR 10 Billion in Issued and Paid-up Capital

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Indonesian qualified lawyer

Fiesta Victoria

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Fiesta Victoria is an Indonesian qualified lawyer with over 16 years of experience in M&A and general corporate. She graduated from the University of Pelita Harapan in 2006 and started her career as a lawyer in the same year at one of the largest and oldest law firms in Indonesia. She joined ZeLo in 2019 with the primary role of establishing and developing ZeLo’s Indonesian practice group. She won the title of "Business Development Lawyer of the Year" at the ALB Women in Law Awards 2021. Additionally, she was nominated as one of the top 5 finalists for "Foreign Lawyer of the Year" at the ALB Japan Law Awards 2023, following a nomination in the same category at the ALB Japan Law Awards 2022.

On April 1, 2021, the Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal / “BKPM”) issued Regulation No. 4 of 2021 on Guidelines and Procedures for Risk-Based Licensing and Investment Facilities (“BKPM Regulation No. 4”).

BKPM Regulation No.4 requires a foreign direct investment company (an Indonesian company owns by foreign party), to have at least IDR 10 billion (approximately JPY 76,694,910) in issued and paid-up capital, unless otherwise stated in other specific regulations. This is higher from the previous requirement, IDR 2.5 billion (approximately JPY 19,173,727). BKPM Regulation No.4 will be effective on June 2, 2021.

Will give you further updates once it becomes clearer whether this requirement applies to existing PMAs and if certain specific exemptions apply.

For further information on the above, please contact this form.

Click here for the Japanese translation article.

The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only. Readers of this article should contact an attorney to obtain advice with respect to any particular legal matter.