December 18, 2025
For supply chain managers, understanding Indonesian investment regulations is crucial to support expansion decisions and business operations in Indonesia. This is reinforced by Indonesia's continued efforts to strengthen its position as an attractive investment destination for both domestic and foreign investors.
The government supports these efforts by launching various comprehensive policies to create a more investor-friendly business climate. Through the Risk-Based Approach Online Single Submission (OSS RBA) system, the licensing process has become significantly simpler and faster.
This article discusses three main pillars of the government's strategy: licensing simplification, clearer legal frameworks, and competitive fiscal incentives. Let's dive in!
The complex business licensing process has long been a significant complaint among investors. The OSS RBA system emerges as a more straightforward solution by consolidating various licensing processes from government agencies into a single digital platform, in accordance with Government Regulation Number 5 of 2021.
1. Low Risk
2. Medium to Medium-High Risk
3. High Risk
According to the Ombudsman Republik Indonesia, licensing simplification provides multiple advantages:
For foreign investment companies in Indonesia, this makes the licensing process faster and helps them plan their supply chain more accurately.
Indonesia's investment legal framework is designed to provide protection and certainty for business operators. Comprehensive Indonesian investment regulations serve as an essential foundation for creating a more transparent and more predictable investment climate.
Law No 25 of 2007 on Investment serves as the primary basis for Indonesia's investment rules and contains essential principles such as:
These regulations provide security for foreign investment companies in Indonesia, enabling them to conduct business more stably and sustainably.
Law Number 6 of 2023 concerning Job Creation brings many conveniences for investors by harmonizing sectoral regulations, simplifying licensing processes, and strengthening consulting services. For import managers, this regulation is beneficial as the licensing process for import and distribution activities becomes faster and more practical.
Heads of Supply Chain planning expansion need to understand this division to design the right ownership structure. Uniair Cargo can help provide practical insights regarding logistics and supply chain sector regulations in Indonesia.
The government provides various tax incentives to enhance Indonesia's competitiveness as an investment destination.
Based on the information from the Indonesia Investment Guidebook, here is the tax holiday scheme:
| Investment Value | Period | Corporate Income Tax Reduction |
| Rp100-500 billion | 5 years | 50% |
| Rp500 billion-1 trillion | 5 years | 100% |
| Rp1-5 trillion | 7 years | 100% |
| Rp5-15 trillion | 10 years | 100% |
| Rp15-30 trillion | 15 years | 100% |
| Above Rp30 trillion | 20 years | 100% |
18 Qualifying Pioneer Industry Sectors: Upstream basic metal, oil and gas refining, petrochemicals, organic/inorganic basic chemicals, pharmaceutical raw materials, electromedical equipment, electronic components, machinery and robotics, power generation components, motor vehicles, ships, trains, aircraft, agriculture-based industries (pulp), economic infrastructure, and digital economy.
Tax allowance offers four main facilities:
The government also provides special incentives for 2025:
4 Easy Steps:
Example Case: Company investment of Rp1 trillion with a 7-year tax holiday (100%)
With additional tax allowance:
Case studies in the renewable energy sector show that companies utilizing full incentives can accelerate their payback period by 2-3 years.
Indonesia contributes more than one-third of ASEAN's GDP, with a population of 270 million. As the only ASEAN country that is a G20 member, Indonesia serves as a strategic hub with 35 international trade agreements, including RCEP.
The combination of efficient OSS RBA, clear Indonesian investment regulations, and competitive tax incentives creates an increasingly mature investment ecosystem. For procurement directors and import managers, this is the right moment to explore business opportunities, whether to establish a foreign investment company in Indonesia or expand regional supply chain networks.
With over 20 years of experience handling project logistics and supply chain management for multinational companies, Uniair Cargo understands the complexities of Indonesian investment regulations and the operational needs of foreign companies in Indonesia. We have facilitated hundreds of importers in managing customs licensing, import documentation, and efficient, compliant distribution of goods throughout the archipelago.
1. What is the main difference between tax holiday and tax allowance?
Tax holiday provides 50-100% corporate income tax reduction for 5-20 years, depending on investment value. Tax allowance offers a 30% net income reduction, allocated over 6 years, plus accelerated depreciation and loss compensation for up to 10 years.
2. How long does it take to obtain NIB through OSS RBA?
For low-risk businesses, NIB is issued automatically within minutes after complete data submission. For medium to high-risk companies, 3-14 working days are required for verification by relevant ministries.
3. Which sectors are 100% open to foreign investment?
Sectors 100% open include certain manufacturing, e-commerce, logistics and warehousing services, information technology, tourism, and creative industries. Always check the latest Daftar Bidang Usaha, as regulations may change according to government policies.
Baca Juga : Why is Indonesia an Attractive Investment Destination in Southeast Asia?
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