Indonesia’s Positive Investment List: Sectors Open and Restricted to Foreign Businesses

Wednesday, 03 June 2026

Indonesia has become one of the most attractive investment destinations in Southeast Asia. With its massive population, growing middle class, abundant natural resources, and strategic location, the country continues to attract investors from around the world, including those from the Middle East. However, before entering the Indonesian market, foreign investors need to understand an important regulation known as the Positive Investment List.

Introduced through Presidential Regulation No. 49 of 2021, the Positive Investment List replaced the older Negative Investment List system. The main idea is simple: instead of focusing on sectors that foreigners cannot enter, Indonesia now highlights sectors that are open for investment and explains any limitations that may apply. In fact, more than 200 business sectors have been liberalized for foreign investors.

For investors from countries such as the United Arab Emirates, Saudi Arabia, Qatar, and other Gulf nations, this creates a wide range of opportunities. Many sectors are now fully open to foreign ownership, making Indonesia an increasingly attractive destination for international capital.

The Positive Investment List divides business activities into four main categories. The first category is priority sectors. These industries are considered important for national development and often receive tax incentives, simplified licensing, and infrastructure support. Examples include renewable energy, digital technology, pharmaceuticals, automotive manufacturing, oil refining, and various export-oriented industries. Investors entering these sectors may benefit from tax holidays and other government incentives.

The second category covers sectors with specific requirements or ownership limitations. These businesses remain open to foreign investment but may require local partnerships or have ownership caps. For example, postal services, domestic airlines, shipping services, and broadcasting companies have restrictions on foreign ownership percentages. Some sectors, such as newspaper publishing and private broadcasting, still require majority domestic ownership.

The third category consists of business activities that require partnerships with Indonesian micro, small, and medium-sized enterprises (MSMEs). The government uses this approach to ensure local businesses can benefit from foreign investment and participate in larger supply chains. These partnerships can take various forms, including subcontracting, distribution agreements, or operational cooperation.

The fourth category is perhaps the most attractive for international investors: sectors that are fully open to 100 percent foreign ownership. These include telecommunications, e-commerce, hospitals, electricity generation, geothermal power, airport services, port operations, pharmaceutical manufacturing, and several oil and gas-related services. For Middle Eastern investors looking for large-scale projects, these sectors offer significant opportunities with fewer ownership restrictions.

Indonesia’s growing digital economy is another major attraction. The government continues to encourage investment in technology, data infrastructure, and artificial intelligence, creating new opportunities for global investors seeking exposure to one of Asia’s fastest-growing digital markets.

Of course, not every sector is open. Gambling, casino operations, certain alcoholic beverage industries, chemical weapons production, endangered species exploitation, and several environmentally sensitive activities remain closed to both domestic and foreign investors.

For investors from the Middle East, Indonesia offers a compelling combination of market size, economic growth, and investment flexibility. While some sectors still require local partnerships or ownership limits, the Positive Investment List has significantly expanded opportunities for foreign businesses. As Indonesia continues its economic transformation, understanding these regulations is the first step toward building a successful and sustainable investment strategy in Southeast Asia.