Jakarta. South Korean investors have not encountered any major obstacle when doing business with Indonesia, according to a diplomat, as Seoul seeks to cement its footprint in strategic sectors.

Starting from the auto powerhouse Hyundai to steelmaker Posco, South Korean companies have expanded their manufacturing facilities to Indonesia. Annual investments in Indonesia have consistently been in the billions-dollar mark. Kim Chanwoo, the minister counsellor for the economic section at the South Korean Embassy, revealed that his country’s businessmen never really fret about the investment climate.

“Companies would knock on the embassy’s door when they have issues and problems. So far, there is no issue. Because we haven’t heard any specific comments [from them]. That’s a good sign,” Kim told a recent media workshop in Jakarta.

Government data showed foreign direct investment (FDI) inflows from South Korea totaled $1.7 billion between January and September. This made South Korea the sixth-biggest source of FDI over the said period. The full-year South Korean investment neared $2 billion in 2025.

“Many Korean companies are working hard to get a successful result with the relevant [Indonesian] firms and government officials,” Kim said, while expressing Seoul's interest in win-win deals.

Existing South Korea-backed projects in Indonesia includes the battery cell project involving Hyundai and battery manufacturer LG Energy Solution. Hyundai is also producing electric cars on Indonesian soil. The state-run steel producer Krakatau Steel and Posco have constructed an integrated steel mill under a joint venture.

However, Seoul still finds that many potential remains untapped.

“We can expand our current operations in EVs and batteries,” Kim said.

South Korea also made another nuclear power investment pitch, citing its experience of constructing reactors overseas, namely in the United Arab Emirates (UAE).

Kim claimed that “good discussions” were already underway for a nuclear deal with Jakarta, citing that the clean energy memorandum of understanding (MoU) inked in April would make a major impetus.

Foreign Minister Arrmanatha Nasir recently spoke to his South Korean counterpart Cho Hyun ahead of the G20 talks in Atlanta. Arrmanatha revealed that they had discussed “efforts in advancing cooperation on trade, investment, strategic industries, and protection of migrant workers”. 

Indonesia reported that bilateral trade rose nearly 11% year-on-year to almost $13.2 billion in January-August 2026. A tariff-slashing free trade agreement has been in effect since 2023.

Despite South Korea’s claims, things have not been all sunshine and rainbows for international investors. Earlier this year, Chinese companies made headlines for writing a letter to President Prabowo Subianto over nickel-related policies and levy increases, among others.

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The workshop was part of the Indonesian Next Generation Journalist Network on Korea program. Hosting this capacity-building program are foreign policy think tank FPCI and the Korea Foundation.

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