The demand for healthcare services across Indonesia has surged, attracting a growing number of foreign entities and clinics eager to establish health facilities, such as private health clinics, within the country. Fortunately, recent governmental and regulatory reforms have further expanded such opportunities by fostering a more open environment for foreign investment in Indonesia’s healthcare sector. For example, the Indonesian government addressed long-standing issues of overlapping healthcare regulations by enacting the “Omnibus Health Law” under Law Number 17 of 2023 on Health (Undang-Undang Nomor 17 Tahun 2023 tentang Kesehatan), consolidating and replacing 11 existing healthcare-related laws. Then, the government enacted Government Regulation Number 28 of 2024 as the implementing regulation of Law Number 17 of 2023 on Health.
Hence, this guide outlines the key steps and considerations for foreign investors seeking to establish a health clinic in Indonesia following these reforms.
WHAT ARE THE TYPES OF PRIVATE HEALTH CLINICS UNDER INDONESIAN LAW?
In Indonesia, clinics are broadly classified as either government-owned (Klinik Pemerintah) or private (Klinik Swasta), reflecting different business fields. Government-owned clinics operate under the Standard Classification Of Indonesian Business Field (Klasifikasi Baku Lapangan Usaha Indonesia; KBLI) code 86104, while private clinics fall under the KBLI code 86105. The Business Standards for Clinics are further elaborated within the Attachment to PerMenKes 17/2024, whereupon the classification of health clinics is then divided into three, based on their service capabilities (kemampuan pelayanan), the scope of service (penyelenggaraan pelayanan), or capital ownership (kepemilikan modal). These three classifications are further subdivided into the following types of clinics:
| service capabilities (kemampuan pelayanan) | Primary Clinics (Klinik Pratama) |
| Advanced Clinics (Klinik Utama) | |
| scope of service (penyelenggaraan pelayanan) | Outpatient Clinics (Klinik rawat jalan) |
| Inpatient Clinics (Klinik rawat inap) | |
| capital ownership (kepemilikan modal) | Domestic Investment Clinics (Klinik Penanaman Modal Dalam Negeri; PMDN) |
| Foreign Investment Clinics (Klinik Penanaman Modal Asing; PMA) |
WHAT SHOULD FOREIGN INVESTORS CONSIDER WHEN OPENING A CLINIC?
It could be seen that foreign investors are permitted to establish health clinics in Indonesia. Specifically, foreign investors can set up clinics under the Foreign Investment Clinic (Klinik Penanaman Modal Asing; PMA) classification, either as a primary or a main clinic. However, primary clinics with foreign investment may only be established under certain conditions, in which:
- The primary clinic serves as a supporting activity for the main operations of the PMA.
- The primary clinic provides healthcare services exclusively to workers and/or their families within the company’s premises.
- The primary clinic is integrated into the company’s building, making it easily accessible to workers and/or their families who need healthcare services.
Additionally, foreign investors planning to establish private health clinics must carefully consider the scope of service provided by the clinic – whether it is an outpatient clinic or an inpatient clinic – as each is subject to different regulations. Private health clinics providing outpatient services may be established by individuals or business entities. On the other hand, private health clinics offering inpatient services can only be established as business entities. Most importantly, it should be noted that in the case of private health clinics involving foreign investors, the business entity must take the form of a legally incorporated Limited Liability Company within Indonesia. Furthermore, foreign investors may only engage in business activities classified as big enterprises (usaha besar), with an initial venture capital exceeding 10 billion Rupiah, excluding the value of land and buildings.
WHAT ARE THE REQUIREMENTS FOR ESTABLISHING PRIVATE HEALTH CLINICS?
Following the regulatory reforms, clinics no longer need Establishment Permits (Izin Mendirikan). Instead, private clinics require an Operational Permit (Izin Operasional) to carry out their activities. Clinics could obtain an Operational Permit by submitting an application through the Online Single Submission (OSS), Indonesia’s integrated online electronic platform for business licensing. Once an OSS account is created, a Business Identification Number (Nomor Induk Berusaha; NIB) and SPPL will be given to proceed, which is the fulfilment of General Business Requirements (Persyaratan Umum Usaha) and Specific Business Requirements (Persyaratan Khusus Usaha). The Specific Business Requirements include, among others:
- List of medicines and consumable medical supplies (Daftar obat dan bahan medis habis pakai);
- List of Human Resources (Daftar Sumber Daya Manusia);
- Practice License Documents (Dokumen Surat Izin Praktik; SIP) for all health workers working at the Clinic;
- In the event that the clinic is also planning to hire foreign medical workers (Tenaga Kerja WNA), the clinic would also need Permit Documents to Employ Foreign Workers (Dokumen Izin Mempekerjakan Tenaga Asing; IMTA). However, it should be noted that foreign medical workers are prohibited from conducting private practice, though they are still required to obtain a Registration Certificate (Surat Tanda Registrasi; STR) and SIP.
- Cooperation agreement documents for the disposal of hazardous and toxic waste (B3);
Once both requirements are fulfilled and the application has been reviewed by the relevant authorities (Indonesian Health Department), the business entity will then be granted an Operational Permit to carry out its activities as a clinic. Other factors to consider include the clinic’s location and building, as specific provisions govern these aspects [elucidated within the Attachment to PerMenKes 17/2024]. Notably, the clinic’s location must be easily accessible, and the building must have a durable, permanent structure. Moreover, there is a possibility, among others but not limited to, that the location or building requires supporting documents to be submitted. These may include proof of land ownership (certificates of deeds) or a lease agreement.
CONCLUSION
In conclusion, foreign investors are permitted to establish health clinics in Indonesia under the Foreign Investment Clinic (PMA) classification, signalling a significant opening of the country’s healthcare sector to foreign investment. To do so, the [business entity] clinic must be structured as a Limited Liability Company (PT) and meet the criteria of a large enterprise with an initial venture capital investment exceeding 10 billion Rupiah. Investors must also comply with all relevant requirements, including obtaining the necessary operational permits and licenses. As clinics are classified as medium to high-risk businesses, obtaining a Business Identification Number (NIB) and a Standard Certificate is mandatory. This framework facilitates foreign investment and fosters the growth and modernization of Indonesia’s healthcare sector, offering a wealth of opportunities for international players to contribute to the country’s expanding medical landscape.
Navigating the intricacies of establishing a private health clinic in Indonesia requires not only a deep understanding of legal and practical aspects but also the proper guidance. For more information and guidance, please do not hesitate to contact us at services@kartikaroulylawfirm.com.
