Indonesia's packaging market is becoming a hotspot for investment!
Indonesia's economic strength firmly ranks first in Southeast Asia, with a projected GDP of approximately $1.5 trillion in 2024 and a sustained economic growth rate of around 5% for 2024–2025. At the same time, the government has launched the 'Digital Indonesia 2045' strategy, focusing on supporting industries such as e-commerce, fintech, and green energy, making Indonesia a hot destination for foreign enterprises.
According to statistics, in the first quarter of 2025 alone, Indonesia received about 2,304 trillion Indonesian Rupiah (approximately $14.5 billion) in foreign direct investment. The rise of manufacturing and e-commerce has driven a surge in demand for packaging such as cardboard boxes.
The following will focus on the key points of Indonesia's new business licensing regulations, including the phased approval process, the 'deemed approved' mechanism, and regional environmental approval exemptions. Combined with compliance and localization needs for the packaging industry, this will help cardboard companies clearly understand access rules, avoid compliance risks, and steadily seize investment opportunities in the Indonesian market.
Policy dividends released, entry barriers further optimized
Indonesia's Government Regulation No. 28 of 2025 on 'Risk-Based Business Licensing' has officially come into effect, replacing the old framework and bringing multiple benefits for foreign investors:
- Industry coverage expanded to 22 sectors, including newly added areas like trade and the creative economy, with packaging-related supporting services clearly regulated;
- The licensing process clarified in phases: first complete basic requirements such as spatial compliance and environmental approvals, then apply for a business license, all processed through the OSS system, ending the confusion of previous procedures;
- Introduction of a 'deemed approved' mechanism: for example, if the KKPR assessment does not respond within 20 working days, approval is automatically granted, greatly improving approval certainty;
- Clear standards for environmental compliance: companies entering industrial zones or economic special zones can enjoy regional approval exemptions, reducing regulatory burdens;
- A more complete enforcement system, with compliance requirements throughout the investment lifecycle, ensuring smooth operations through prior due diligence.
Packaging market potential skyrocketing, opportunities not to be missed
The recovery of Indonesia's manufacturing sector and the rapid growth of the e-commerce industry have directly driven a surge in demand for cardboard, food packaging, and industrial packaging. The new policy, by simplifying approvals, clarifying processes, and reducing uncertainty, has removed key obstacles for foreign packaging companies to enter the market.
It is worth noting that, in addition to Government Regulation No. 28 of 2025, the Ministry of Investment has also distributed a draft that would raise the capital threshold for foreign companies.
The draft proposes that the minimum total investment for each project under each industry classification code (KBLI) must exceed 10 billion Indonesian Rupiah (approximately $628,000), and the minimum paid-up capital for each foreign investment company (PT PMA) is 2.5 billion Indonesian Rupiah (approximately $157,000), while for certain tech startups in economic special zones, the threshold is 5 billion Indonesian Rupiah (approximately $314,000).
Although this regulation is still in draft form and has not yet come into effect, it signals the promotion of large-scale investment. For capable packaging companies, now is the time to enter the market to gain a head start while aligning with local industrial development directions.