A Complete Guide on How to Invest in Indonesia from China for Expats

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Understanding how to invest in Indonesia from China is essential for expats and business owners aiming to expand operations into one of Southeast Asia’s fastest-growing economies. 

Indonesia, as ASEAN’s largest market by population and with vast natural resources, offers opportunities across manufacturing, infrastructure, technology, real estate, and renewable energy. 

In recent years, the Indonesian government has actively reformed regulations and improved infrastructure to make foreign investment more accessible, especially for Chinese investors.

For Chinese individuals and corporations, the process of investing in Indonesia now involves clearer legal pathways, streamlined licensing, and stronger bilateral financial linkages. 

Whether you plan to build a factory, lease office space, or enter joint ventures, this guide outlines how to invest in Indonesia from China, covering the critical legal, financial, and operational steps to help expats navigate the Indonesian investment landscape.

Investment Pathways: Structures and Steps

When learning how to invest in Indonesia from China, the most common legal structure for foreign investors is forming a PT PMA (Perseroan Terbatas Penanaman Modal Asing), which is a foreign investment limited liability company. 

This entity allows a Chinese investor to hold shares, operate directly, and enjoy legal protection under Indonesian corporate law.

Some industries permit 100 percent foreign ownership, while others require local partners or are restricted under Indonesia’s “Negative List” of sectors. 

Investors should carefully review the “Positive Investment List” to understand which sectors are open.

To establish a PT PMA, the required paid-up capital typically ranges between IDR 2.5 billion and 10 billion (around USD 160,000 to 640,000). 

At least 25 percent of that capital must be deposited at the outset. In some regions or special economic zones (SEZs), the capital requirement may be lower or there may be incentives to ease entry.

As a practical example of property that can function as office space or multiuse commercial premises, Chinese investors can consider Taman Tekno X, BSD City. 

This development, by Sinar Mas Land, offers multifunctional units (such as warehouse-office, showroom, or mixed commercial use) in a strategic location in Tangerang, Banten. 

Units in Taman Tekno X are priced between Rp 4.56 billion and Rp 10 billion, targeting higher-end commercial usage. 

Because of its flexibility and strategic location (close to toll access, 35 minutes from Jakarta’s CBD, 40 minutes from Soekarno-Hatta Airport, and 45 minutes from Tanjung Priok Port), Taman Tekno X is often recommended for businesses seeking a well-located office, warehouse, or hybrid facility. 

When selecting property or commercial premises, Chinese investors should ensure that the zoning permits the intended business activities and that obtaining relevant permits is feasible under local regulations. 

Using Taman Tekno X as an option demonstrates how real-estate / property assets can complement the operational base for a PT PMA.

Essential Licensing and Registration

A critical part of how to invest in Indonesia from China is navigating Indonesia’s licensing framework, primarily overseen by the BKPM (Investment Coordinating Board). The steps include:

1. Apply for a Principle Investment License (Izin Prinsip) from BKPM to get approval in principle to invest.
2. Register for a Tax Identification Number (NPWP) to meet corporate tax obligations.
3. Obtain a Business Identification Number (NIB) via the OSS (Online Single Submission) platform, which integrates many permitting and licensing functions.
4. Secure sector-specific permits or licenses depending on your business type, such as trading, manufacturing, real estate, or logistics.
5. Comply with expatriate hiring regulations, including preparing an RPTKA (Expatriate Placement Plan) and securing IMTA (Work Permit) for foreign staff.

These steps ensure that your business is legally compliant and capable of operating in Indonesia. Proper licensing also helps secure incentives and reduce regulatory risk.

Visa and Residency Options for Investors

China-based investors must also consider visa and residency pathways when planning how to invest in Indonesia from China. Among the available options:

• Investor KITAS (temporary stay permit) is granted to foreign nationals who hold shares in an Indonesian company and allows longer residence linked to business operations, with renewal options and potential eventual permanent status.
• Golden Visa program, launched recently, allows 5- to 10-year residency for investors who commit USD 2.5 million to USD 5 million into qualified business sectors. This offers stability for long-term planning and family relocation options.

These visa paths are especially useful for Chinese investors to stay in Indonesia while overseeing and scaling their ventures.

Incentives and Financial Advantages

One major attraction in how to invest in Indonesia from China is the set of incentives designed to attract foreign capital. 

These incentives include:

• Corporate tax holidays for sizeable projects in priority sectors
• Import duty exemptions for capital goods, equipment, or raw materials
• Tax deductions or credits for R&D, green energy, or innovation projects
• Regional incentives in SEZs, such as lower taxes, streamlined customs, or investment facilitation

Financially, China and Indonesia have enabled direct local currency settlement between the Chinese yuan (RMB) and Indonesian rupiah (IDR), reducing reliance on USD and lowering transaction costs. 

Moreover, the introduction of a QRIS-linked payment system supports smoother digital billing and remittance between Chinese and Indonesian financial systems.

Operational and Compliance Considerations

When operating your Indonesian venture, after going through how to invest in Indonesia from China steps, it is essential to maintain compliance and efficiency. 

Indonesia now uses the OSS platform to centralize business registration, licensing, and reporting processes, making administration faster.

Companies must submit quarterly investment realization reports, adhere to labor laws, environmental standards, and tax regulations. 

Noncompliance may lead to penalties or revocation of licenses.

Engaging local consultants, lawyers, or accounting firms is strongly advised so that your business keeps pace with evolving regulations, local tax practices, and sectoral specifics. 

These experts help navigate regulatory changes, support strategic decisions, and prevent legal or administrative missteps.

Dispute Resolution and Legal Framework

A key element of how to invest in Indonesia from China is understanding the legal protections available for foreign investors. Indonesia recognizes international arbitration awards, and under Law No. 30 of 1999, arbitration results may be enforced in Indonesia via Supreme Court recognition.

Moreover, the Bilateral Investment Treaty (BIT) and Double Taxation Agreement (DTA) between China and Indonesia provide further guarantees; protecting investments from double taxation, ensuring fair treatment, and facilitating capital repatriation.

Practical Tips for Chinese Expats and Investors

Chinese investors who wish to apply how to invest in Indonesia from China effectively should consider the following:

• Work with established local advisors to handle compliance, licensing, real estate, and sector feasibility.
• Choose your location strategically, Java and Sumatra are industrial and commercial hubs, while Kalimantan, Sulawesi, and remote regions may offer incentives for resource or infrastructure projects.
• Monitor regulatory and policy updates from BKPM, Ministry of Investment, and relevant ministries.
• Use technology for finance, logistics, supply chain, and e-commerce integration to boost efficiency and cross-border coordination.
• When selecting premises, consider developments like Taman Tekno X for their flexibility, strategic location, and commercial zoning potential.

By following these steps and thoroughly understanding each phase, Chinese expats and businesses can successfully enter the Indonesian market through a well-structured approach to how to invest in Indonesia from China.

(images: freepik)