Indonesia–Australia Economic Strategy 2040 and the Future of FDI

Foreign Direct Investment Indonesia Enters a New Strategic Phase

Foreign direct investment Indonesia is moving into a more strategic and structured era, particularly in its economic relationship with Australia. Both countries are no longer focused only on trade volume. Instead, they are aligning long-term priorities under a shared vision that extends toward 2040, combining trade liberalization, investment facilitation, and regional integration.

This shift reflects a deeper partnership built on the Indonesia–Australia Comprehensive Economic Partnership Agreement, growing bilateral trade, and Australia’s Southeast Asia Economic Strategy 2040. Together, these frameworks signal that the next decade will be defined not just by exports and imports, but by sustained capital deployment, joint ventures, and long-term market access.

RI–Australia Economic Strategy Toward 2040

Australia’s Southeast Asia Economic Strategy 2040 places Indonesia at the center of its regional outlook. Indonesia is viewed as a long-term growth engine due to its population size, industrial expansion, and regional influence.

From Indonesia’s perspective, Australia is increasingly seen as a strategic investor rather than only a trading partner. The focus areas include infrastructure, energy transition, agribusiness, healthcare, education, mining services, and digital industries.

2025 Results Show Strong Momentum

Australia–Indonesia Trade Performance

The year 2025 delivered tangible results. Bilateral trade between Indonesia and Australia surged significantly, reportedly increasing threefold compared to earlier periods. This growth was supported by improved market access, tariff reductions under IA-CEPA, and stronger business confidence on both sides.

Key contributors to this growth included:

• Agriculture and food products
• Energy and resources
• Education and professional services
• Manufacturing inputs and intermediate goods

This performance confirms that policy alignment is translating into real economic outcomes.

2026 FDI Roadmap Between Indonesia and Australia

Foreign Direct Investment Indonesia as a 2026 Priority

Looking ahead to 2026, the focus shifts from trade acceleration to investment execution. Both governments are encouraging Australian companies to increase direct investment in Indonesia, particularly in sectors aligned with Indonesia’s industrial and sustainability goals.

Priority areas include:

• Renewable energy and energy transition projects
• Downstream processing and value-added manufacturing
• Healthcare infrastructure and life sciences
• Education, vocational training, and skills development
• Digital economy and data-driven services

At the same time, Indonesia is actively seeking Australia’s backing for accession to the OECD and advancing CPTPP Indonesia 2026 ambitions. These efforts aim to strengthen regulatory alignment, investor confidence, and long-term capital inflows.

Opportunities and Risks in the 2026 Landscape

Key Opportunities

For Australian investors, Indonesia offers scale, demographic growth, and improving regulatory clarity. For Indonesian businesses, Australian capital brings technology, governance standards, and long-term funding.

Major opportunities include:

• Joint ventures under IA-CEPA sectors
• Infrastructure-linked public private partnerships
• ESG-aligned projects attractive to institutional investors
• Supply chain diversification within Southeast Asia

Potential Risks to Manage

Despite strong potential, investors must also navigate:

• Regulatory changes and licensing complexity
• Land use and environmental compliance
• Workforce readiness and labor regulations
• Tax structuring and cross-border compliance

These risks are manageable, but only with proper local guidance and planning.

How Business Hub Asia Supports RI–Australia Investment

Business Hub Asia acts as a local execution partner for Australian and multinational investors entering Indonesia. Our role is to reduce entry friction and ensure compliance from day one.

We support investors through:

Market Entry and Company Setup

• Establishment of PT PMA structures
• IA-CEPA aligned investment planning
• Coordination with BKPM and relevant ministries

Licensing and Regulatory Compliance

• Business licenses and sector-specific permits
• Environmental and operational approvals
• Ongoing compliance advisory

HR, Immigration, and Operational Support

• Recruitment of local management and skilled workforce
• Work permits and visas for foreign professionals
• Employer of Record solutions for early-stage operations

These services allow investors to focus on strategy while we manage execution.

Conclusion

Indonesia–Australia economic cooperation is entering a decisive phase. With strong 2025 performance and a defined 2026 FDI roadmap, foreign direct investment Indonesia now offers a clear, policy-backed pathway for long-term growth.

Australian and global investors planning to enter or expand in Indonesia must act early. Market entry readiness, licensing, workforce planning, and regulatory compliance will be critical to success.

Business Hub Asia supports investors at every stage of Indonesia market entry.
We provide end-to-end services covering company setup, licensing, HR recruitment, work permits, and ongoing compliance tailored to RI–Australia investment activities.

Submit your inquiry through our form below to communicate with our consultants to start preparing your Indonesia investment strategy for 2026 and beyond.