The growth of the Indonesian population and the need for health facilities are increasing. Hospitals with international standards of treatment are in demand.

The Indonesian Government has stipulated that foreign investment may engage in hospital business through an establishment of a Foreign Direct Investment Company so-called a PT. PMA (Perseroan Terbatas – Penanaman Modal Asing).

Currently, the maximum percentage of ownership that is open to foreign investment in the hospital business is 67% of the total shareholding and 70% for foreign investment from ASEAN countries.

It seems that the Indonesian Government is currently attempting to increase foreign investment in this sector by increasing the opportunities for foreign investors to enter. In fact, the Government and the Legislature have created a new law that simplifies licensing for foreign workers in Indonesia, including doctors.

Application on the foreign investment may be lodged with BKPM (Indonesia Investment Coordinating Board).

Since the percentage of ownership that is open to foreign investment in this sector is restricted, foreign investors will need to engage in a joint venture with a local company. A joint venture agreement between foreign and local investors shall be made prior to preparations of articles of association of the company.

Both of the joint venture agreement and articles of association shall be lodged together with the foreign investment application to BKPM. Once BKPM has issued the approval, applications for the permits (Business permit and additional permits in the health sector) can be submitted to BKPM through the OSS system.

After obtaining all the permits, arrangements to obtain the relevant working permit for the foreign doctors can be made under the Ministry of Health thereafter.

Said, Sudiro & Partners

Indonesian Legal Consultants

Sampoerna Strategic Square

South Tower, Level 18

Jl. Jend. Sudirman Kav. 45 - 46

Jakarta 12930 Indonesia

Phone: (62-21) 575.0983

Fax: (62-21) 575.0803





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