What IA-CEPA and Katalis Mean for Australian Companies Entering Indonesia

The Indonesia–Australia Comprehensive Economic Partnership Agreement (IA-CEPA) gives Australian companies preferential terms in Indonesia that most foreign investors do not have. Katalis 2.0 (Indonesian for "catalyst"), launched in Jakarta on 13 July 2026, is the government program built to help them use those terms. Neither replaces the work of getting a licence, a site and a counterpart in Indonesia.

The gap the agreement was meant to close remains wide. Two-way trade has almost tripled since IA-CEPA entered into force on 5 July 2020, reaching $35.38 billion in 2024. Investment has moved more slowly. Australian ministers, the Business Champion for Indonesia and Indonesia's sovereign wealth fund, Danantara, are now focused on that side of the ledger.

The timing matters for a second reason. The two governments exchanged their Stage One reports for the IA-CEPA General Review on 27 August 2026. Terms that apply today may be widened, narrowed or clarified over the next year.

What IA-CEPA provides

IA-CEPA's value to an Australian investor is legal certainty over ownership, not tariff relief. Over 99% of Australian goods exports by value now enter Indonesia duty-free or on preferential terms, which matters to exporters. For a company putting capital into Indonesia, the investment and services commitments carry more weight.

Indonesia committed to the following ownership ceilings for Australian investors:

• 3, 4 and 5 star hotels and resorts: 100%, no geographic limit
• Power plants above 10 MW: 95%
• Offshore oil and gas platform construction: 75%
• Large hospitals, and in-hospital pathology and specialist clinics: 67%
• Aged care facilities: 67%
• Vocational training and university education: 67%
• Contract mining and mine site preparation: 67%
• Telecommunications: 67%
• Architecture, engineering, construction: 67%
• Wastewater management: 67%
• Highways, bridges, tunnel concessions, parking: 67%
• Railway operation, marinas, small geothermal plants: 51%

Source: DFAT, IA-CEPA key outcomes for Australia.

The figures need reading in context. Indonesia's 2021 Positive Investment List opened many sectors to full foreign ownership for all investors, so several of these ceilings no longer represent headroom over general settings. Their continuing value is that they are treaty commitments. Indonesia cannot readily tighten them for Australian investors, and the agreement's investment chapter gives Australian investors recourse to investor-state dispute settlement if it does.

IA-CEPA is also not a tax instrument. Permanent establishment, withholding and transfer pricing remain governed by the Australia–Indonesia double tax agreement and Indonesian domestic law.

What Katalis does

Katalis is the agreement's economic cooperation program: Australian-funded, delivered with the Indonesian Government, and commercially oriented rather than aid-led. Its first phase ran from 2021 to 2025. Katalis 2.0 was launched in Jakarta on 13 July 2026 by Assistant Minister Matt Thistlethwaite and Indonesian Vice Minister of Trade Dyah Roro Esti Widya Putri.

The first phase worked mostly at the level of sectors and institutions. It supported aged care skills partnerships, digital innovation, agricultural market access and women's participation in trade. The second phase keeps that orientation: expanding trade and investment, strengthening institutions, and broadening participation in growth.

For an Australian company, Katalis is best understood as context and convening, not a transaction service. It can surface sector priorities, open dialogue with Indonesian agencies and connect firms to bilateral initiatives. It does not obtain licences, select partners or negotiate on a company's behalf. Funding levels and priority sectors for Katalis 2.0 had not been published in detail at the time of writing; the program's website is being rebuilt.

Katalis sits alongside other government channels. The Australian Government's Investment Deal Team in Jakarta works on Australian investment into Indonesia, and Australia signed a memorandum of understanding with Danantara in February 2026.

What neither changes

The agreement sets the ceiling. Indonesian domestic process determines whether a company reaches it. Four points tend to decide the timetable:

• Classification. Eligibility turns on the business activity code (KBLI) assigned in the OSS risk-based licensing system. An activity that sounds like an IA-CEPA sector may sit under a code with different conditions.
• Capital and structure. A foreign-owned company (PT PMA) must meet minimum investment and paid-up capital thresholds per activity and location, whatever ownership the treaty allows.
• Sector licensing. Hospitals, education providers, power producers and mining service companies each answer to a line ministry or regulator with its own approvals, timelines and local-content expectations.
• Regional authority. Land, spatial planning, environmental approval and many operating permits sit with provincial and regency governments, which were not party to the negotiation.

A 67% ceiling also means a 33% Indonesian partner. Choosing that partner, and structuring governance, exit and deadlock with them, usually determines more of the outcome than the ceiling itself.

Implications for Australian companies

The sectors where IA-CEPA offers the most are those Indonesia regards as national priorities: health and aged care, education, energy and infrastructure. These are also the sectors with the longest institutional decision cycles. Australian investor interest, as described by the Business Champion for Indonesia, sits in the same places: education, health, clean energy, waste-to-energy, infrastructure and digital.

In our experience, the companies that use the framework well take four steps before committing capital:

1. Confirm that the specific activity, under its KBLI code, falls within an IA-CEPA commitment, and whether the commitment still exceeds general settings.
2. Map every approval in sequence, national and regional, and identify which agency holds each decision.
3. Select the Indonesian partner on governance and alignment, not only on access.
4. Treat the General Review as a live variable. Submissions closed on 31 March 2026 and the joint stage is under way; Indonesia has raised its trade deficit with Australia as a central concern.

Timelines should be set by the sector. A straightforward services entry may take months. A hospital, campus or generation asset with regional approvals is a multi-year undertaking.

Our view

IA-CEPA gives Australian companies a firmer legal footing in Indonesia than most of their competitors. Katalis 2.0 gives them a channel into government thinking. The distance between those advantages and an operating business is still covered one approval and one relationship at a time.

Nusantara Advisory Group works with companies at that stage, from scoping the path through to execution.

Sources

• DFAT, IA-CEPA key outcomes for Australia
• DFAT, Indonesia country brief
• DFAT, IA-CEPA news
• Australian Embassy Jakarta, Katalis 2.0 launch, 13 July 2026
• Kementerian Perdagangan, Katalis 2.0, 14 July 2026
• RRI, IA-CEPA General Review Stage One, 9 September 2026
• ANTARA, IA-CEPA investment focus
• IA-CEPA ECP Katalis