Indonesia's foreign investment framework under the Negative Investment List (Daftar Investasi Negatif, DIN) and its successor, the Accessibility-based Positive Investment List (Presidential Regulation 10/2021, updated by PR 87/2024), determines how and where foreign franchise operators can participate in the Indonesian market. Understanding these regulations is fundamental to structuring a compliant and commercially viable franchise operation.
2024 Investment List Updates
Presidential Regulation 87/2024 (replacing PR 10/2021) has significantly opened Indonesia's investment landscape. Key changes for F&B franchises: restaurants/cafes with capital investment above USD 10 million are now 100% foreign-ownership eligible; franchises meeting minimum investment thresholds qualify for streamlined licensing through the Online Single Submission (OSS) system; and certain food service sub-sectors remain restricted to joint venture arrangements.
OSS System and Licensing
The Online Single Submission (OSS) system is Indonesia's one-stop licensing platform. Foreign investors must: obtain a NIB (Nomor Induk Berusaha, Business Identification Number) through OSS; obtain risk-based licenses (low, medium, or high risk classification determines requirements); complete company establishment with notarized deeds registered at the Ministry of Law and Human Rights; and register trademarks with DGIP (Directorate General of Intellectual Property). For franchises, the franchise registration under Government Regulation 35/2022 must also be completed throughoss.
- 100% foreign ownership: restaurants/cafes with USD 10M+ investment
- NIB registration: OSS system (oss.go.id)
- Trademark registration: DGIP (takes 12-18 months)
- Franchise registration: PP 35/2022 — mandatory before operations
💡 Critical Warning: Trademark registration in Indonesia takes 12-18 months. Register your trademarks with DGIP immediately upon NIB issuance — your franchise rights and brand protection depend on it. Unregistered brands are vulnerable to bad-faith registrations by local parties.
Practical Considerations
Indonesia's archipelagic geography creates operational complexity. Your franchise structure must account for: different regulatory requirements across 38 provinces, local government (PEMDA) licensing in addition to national registration, Bahasa Indonesia as the mandatory language for all official documents, and regional minimum wage variations (Jakarta's Rp 5.1 million/month vs. rural areas at Rp 2-3 million/month).
Indonesia's 280 million population and USD 540 billion GDP make it Southeast Asia's largest consumer market. Despite its complexity, the market rewards patient investors who build proper compliance infrastructure and local partnerships. Focus on Java Island (60% of population) initially, then expand to Sumatra and Sulawesi as your operation matures.