Setting up a PT PMA (Perseroan Terbatas Penanaman Modal Asing), or a Foreign-Owned Company in Indonesia, is a strategic move for international investors looking to tap into one of Southeast Asia’s fastest-growing economies. Whether you plan to operate in Bali, Jakarta, or other regions of Indonesia, forming a PT PMA is the most reliable legal structure for foreigners wishing to do business in the country.

At The Bali Lawyer, we specialize in guiding foreign investors through the legal and administrative process of establishing a PT PMA in Indonesia. With deep knowledge of Indonesian regulations and a strong local presence, our team ensures your company formation is compliant, efficient, and hassle-free.

What is a PT PMA?

A PT PMA (Foreign Investment Limited Liability Company) is the legal entity that allows foreign individuals or companies to conduct business and generate revenue within Indonesia. It is the only type of company structure that provides foreign nationals with full ownership rights (subject to the business sectors open to foreign investment, as outlined in the Positive Investment List).

Unlike a local PT (which requires 100% Indonesian ownership), a PT PMA can be fully or partially owned by foreign investors depending on the business classification. This legal framework opens the door for legitimate business operations, property acquisition (via the company), visa sponsorship for directors and employees, and legal access to the Indonesian market.

Who Should Establish a PT PMA?

A PT PMA is ideal for:

• Foreign entrepreneurs planning to start a business in Indonesia

• International companies expanding into the Indonesian market

• Foreign investors seeking long-term, legally recognized operations in sectors open to foreign ownership

• Businesses in tourism, hospitality, consulting, trading, education, construction, and tech industries

Benefits of Establishing a PT PMA

1. Legal Business Ownership
   Foreigners can legally own shares in the company and operate under the Indonesian legal system.

2. Operational Legitimacy
   A PT PMA allows you to legally issue invoices, sign contracts, and employ staff.

3. Work and Stay Permits (KITAS)
   The company can sponsor work permits for foreign directors, commissioners, and employees.

4. Repatriation of Profits
   Profits can be legally transferred to your home country through official banking channels.

5. Company-Owned Property
   PT PMAs can lease land and buildings, and in some cases, enter long-term leasehold agreements for property.

6. Participation in Public and Private Projects
   A PT PMA can participate in tenders, B2B agreements, and public sector projects.

Step-by-Step Process to Establish a PT PMA in Indonesia

1. Determine Your Business Classification

The first step is identifying your business sector based on the Indonesian Standard Industrial Classification (KBLI). Certain sectors are restricted or limited to partial foreign ownership under the Positive Investment List issued by the Indonesian government.

2. Choose a Company Name

Your company name must be unique and follow the standard naming conventions:

• At least three words

• Cannot use offensive or misleading terms

• Must be approved by the Ministry of Law and Human Rights

3. Establish a Legal Domicile

You need a legal business address in Indonesia. Virtual offices are acceptable in some sectors, while others may require a physical address.

4. Prepare the Deed of Establishment

This includes drafting and notarizing the company’s Articles of Association through a local notary. This document outlines the structure, ownership, and purpose of the business.

5. Obtain Ministry Approval

Once notarized, the deed must be submitted to the Ministry of Law and Human Rights for legal recognition and issuance of the Ministerial Decree of Legal Entity.

6. Apply for a Tax Identification Number (NPWP)

All companies in Indonesia must be registered with the Tax Office and obtain an NPWP (Nomor Pokok Wajib Pajak) to operate legally.

7. Register with OSS System

The Online Single Submission (OSS) system is the central platform for business licensing in Indonesia. Through OSS, you will receive your:

• Business Identification Number (NIB)

• Business license (Izin Usaha)

• Location permit

• Environmental license (if applicable)

8. Open an Indonesian Bank Account

With your legal entity established, the next step is opening a corporate bank account in Indonesia. This is essential for capital injection and business transactions.

9. Inject the Paid-Up Capital

Although the minimum capital requirement is IDR 10 billion, this is a planned capital, and not all of it needs to be deposited upfront. The exact amount of capital depends on the business activity and operational scale.

10. Obtain Additional Licenses (If Needed)

Depending on your industry, you may require additional licenses or certifications. For example:

• Tourism License (TDUP)

• Construction Service Business License (IUJK)

• Trading Business License (SIUP)

Post-Incorporation Requirements

Once your PT PMA is established, you must comply with ongoing regulations, including:

• Monthly and annual tax reporting

• Employment reporting (especially if you employ foreigners)

• Social security (BPJS) registration

• Regular company updates in the OSS system

Common Challenges When Establishing a PT PMA

Foreign investors often encounter legal and administrative barriers due to complex regulations, language barriers, or unfamiliarity with local procedures. Some common issues include:

• Choosing the wrong business classification

• Failing to comply with sectoral ownership limits

• Delays due to incomplete documentation

• Problems with local partners or nominee arrangements

With professional legal assistance from The Bali Lawyer, you can avoid these pitfalls and ensure your company formation process is smooth and fully compliant with Indonesian law.

Why Choose The Bali Lawyer?

As a trusted law firm based in Bali, we provide end-to-end legal support for foreigners looking to invest and establish companies in Indonesia. Our services include:

• Legal consultation and business planning

• Drafting and notarization of company documents

• Company registration and licensing via OSS

• Visa and KITAS sponsorship

• Tax and legal compliance

We understand the needs of international clients and offer bilingual support, timely execution, and customized legal strategies tailored to your business goals.

PT PMA vs Local PT: What’s the Difference?

For foreign investors, a PT PMA is the only legitimate way to gain direct ownership and conduct long-term business in Indonesia.

Industries Open to Foreign Investment

While many sectors are fully open to foreign investment, some are subject to restrictions or require a joint venture with a local partner. Common industries for PT PMAs include:

• Hospitality and tourism

• E-commerce and tech

• Retail and trading

• Construction and infrastructure

• Export/import

• Consulting services

• Education and training

• Renewable energy and manufacturing

Business Expansion in Indonesia

Once your PT PMA is established, expanding operations is possible through:

• Opening branch offices in other regions

• Increasing your capital

• Applying for additional business activities (KBLI codes)

• Hiring more staff and obtaining additional work permits

• Participating in joint ventures or partnerships

Conclusion

Establishing a PT PMA in Indonesia is one of the best legal pathways for foreign investors seeking to access the Indonesian market. While the process involves multiple steps and government agencies, professional legal support can make the entire process seamless and fully compliant with local laws.

At The Bali Lawyer, we are committed to helping you every step of the way — from consultation to full company setup. Whether you’re starting a small business or planning a large-scale investment, our legal team is ready to assist.

Contact us today to start your PT PMA setup in Indonesia and take the first step toward your business success.