Lombok Land Zoning
When setting up a PT PMA (foreign-owned company) in Indonesia, one of the most important steps is understanding the investment zoning system.
The Indonesian government categorizes all business sectors into Green, Yellow, and Purple Zones to guide what types of activities are open to foreign ownership, which require conditions, and which involve strategic partnerships.
Understanding which zone your business falls under is crucial before setting up your company in Indonesia. While Green Zones offer full ownership and flexibility, Yellow and Purple Zones often require deeper collaboration with local partners, which can also be a strong long-term advantage.
Green Zone
Open to Foreign Investment (100% Ownership Allowed)
Green Zone sectors are considered safe and open for foreign investment, with no restriction on foreign ownership.
These are business activities that the Indonesian government actively encourages, often due to their potential to bring in technology, skills, or capital.
Key Points:
✅ Up to 100% foreign ownership allowed
✅ No requirement for an Indonesian shareholder or commissioner
✅ Full control over management and profit structure
✅ Must still meet minimum investment value (usually IDR 10 billion)
Yellow Zone
Conditional Foreign Ownership (Restrictions Apply)
Yellow Zone sectors are conditionally open to foreign investment, meaning you can operate as a foreign investor, but certain rules apply, often involving ownership limits, special licenses, or a mandatory Indonesian partner.
Key Points:
✅ Foreign ownership capped (e.g., 49%, 67%, or other % depending on activity)
✅ Often requires a joint venture with an Indonesian entity
✅ May require approval from specific ministries or regulatory bodies
✅ Great sectors for foreign-local collaboration with the right structure
Purple Zone
Open with Partnership Encouraged
The Purple Zone represents sectors where foreign investment is welcomed, but the government encourages you to partner with a local Indonesian business. These partnerships are not always mandatory, but strategically recommended, especially to ease local integration, compliance, and approval processes.
Key Points:
✅ Local partnership encouraged but not always legally required
✅ Often ideal for social enterprises or culturally sensitive ventures
✅ Partnerships can help with permits, land access, and community support
✅ Building trust and transparency is key to success in these zones