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FDI: Entry and ownership rule
On 12 April 2013, the Indonesian Capital Investment Coordinating Board (BKPM) issued regulation no. 5/2013 introducing new general investment regulations. The provisions include discriminatory minimum investment levels and prohibitions for venture capital companies. Based on article 22 of the regulation, the minimum capital investment for a Foreign Capital Investment (PMA) is 10 billion IDR (ca. 1 million USD), whereas for a Domestic Capital Investment (PMDN) the threshold is 500 million IDR.
A similar discrimination has been stipulated for paid-in capital with a minimum of 2.5 billion IDR for PMAs. Also for PMAs, a minimum equity of 10 million IDR per shareholder has been introduced.
Furthermore, the regulation prohibits venture capital companies to have any shareholdings in a PMA, whereas the shareholding in a PMDN is restricted to 10 billion IDR (excl. land & buildings).
The regulation came into force on the 27 May 2013 and was replaced by the amendment to this regulation 12/2013 on 11 September 2013 (cf. Related Measures).
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