Private Limited Company Indonesia Setup: The PT PMA Guide
A private limited company setup in Indonesia for a foreign founder almost always means forming a PT PMA (Perseroan Terbatas Penanaman Modal Asing), the legal vehicle that lets a non-Indonesian hold shares directly in a local company. It requires at least two shareholders, one director and one commissioner, a notarial deed of establishment, approval from the Ministry of Law and Human Rights, and a Business Identification Number (NIB) issued through the OSS online licensing system. Plan for an investment commitment around IDR 10 billion per business line (this figure moves with regulation, confirm it before you commit), two to six weeks of processing, and quarterly LKPM reporting once the company exists.
Contents
- What PT PMA actually is, and why "private limited company" means this in Indonesia
- What it costs to set up
- The setup process, step by step
- Minimum capital requirements explained
- Shareholder, director and commissioner rules
- KBLI codes and sectors closed to foreigners
- PT PMA vs local PT vs representative office
- What happens after the company is formed
- Frequently asked questions
What PT PMA actually is, and why "private limited company" means this in Indonesia
Indonesia does not have a separate category called "foreign private limited company." It has the PT, a standard limited liability company, and the PT PMA, which is a PT with foreign capital in it. If you own even one share as a foreigner, your company is a PT PMA by law, not a local PT, and it is regulated differently from day one. People search "private limited company Indonesia setup" expecting something like a UK Ltd or a Singapore Pte Ltd. Structurally it is close: limited liability, shares, a board. The differences are in who can own it, how much capital it needs to show, and how much the government watches it afterwards.
A PT PMA gives you full legal ownership, the right to sponsor your own work visa as director, and the ability to invoice clients and sign contracts as an Indonesian legal entity. A lot of foreigners in Bali try to skip this with a local PT and a nominee shareholder instead. That route is explained below, in the mistake section, because it is the single most common way people lose a business here.
What it costs to set up
Costs vary by notary, by sector, and by how many licenses your KBLI codes trigger. The figures below are typical ranges reported by firms working in this space. Confirm a fixed quote before signing anything, because scope creep (extra KBLI codes, sector licenses, domicile issues) is where quotes drift upward.
| Item | Typical range (USD) | Notes |
|---|---|---|
| Notary deed and company registration | 800 to 1,800 | Covers the Akta Pendirian and Ministry of Law approval |
| NIB and OSS licensing | 200 to 600 | Government portal fee, often bundled into service fee |
| Tax ID (NPWP) and corporate bank account setup | 100 to 400 | Bank account opening can take longer than the company itself |
| Virtual office or domicile letter (first year) | 300 to 1,200 | Required address for registration, varies by location and provider |
| Legal and consultancy fee | 1,500 to 4,000 | Depends on complexity and number of KBLI codes |
| Total typical range | 2,900 to 8,000 | Does not include paid up capital or visa costs |
None of this includes the paid up capital itself, which sits in your corporate bank account as working capital rather than being a fee you pay to anyone. It also does not include a director's KITAS, which is a separate process covered in our work visa and KITAS guide.
The setup process, step by step
The order matters. Skipping or reordering these steps is the usual reason a setup that should take three weeks takes three months.
- Choose your KBLI codes. Every business activity in Indonesia maps to a code. Pick the wrong one and you either operate outside your license or discover the sector is restricted to foreigners after you have already paid a notary.
- Check foreign ownership limits for that sector against the current Positive Investment List (the successor to the old Negative Investment List under Presidential Regulation 10/2021 and its amendments). Some sectors allow 100% foreign ownership, some cap it at a percentage, a short list remains closed entirely.
- Draft and sign the Akta Pendirian (deed of establishment) with a licensed notary, naming shareholders, director(s), commissioner(s) and the company's capital structure.
- Obtain Ministry of Law and Human Rights approval (SK Kemenkumham), which gives the company legal personality.
- Register for a tax ID (NPWP) at the local tax office.
- Apply for the NIB through the OSS system. This single number now functions as business registration, import license (if applicable) and the base for most sector permits.
- Pick up any sector-specific licenses your KBLI codes require, which can range from none to several, depending on the industry.
- Open the corporate bank account and inject the required capital.
- Apply for the director's KITAS if a foreign director will be resident in Indonesia and drawing a salary from the company.
Realistic timeline: two to four weeks for a straightforward single-KBLI company with no special license, four to eight weeks if a sector permit or bank account delay is involved. Bank compliance checks on foreign-owned companies have gotten stricter in recent years and are now a common bottleneck, not the Ministry of Law step.
Minimum capital requirements explained
This is the part people misunderstand most. The commonly quoted figure is an investment plan of around IDR 10 billion (roughly USD 650,000 depending on the exchange rate) per business line (per KBLI code), excluding land and buildings. Of that, paid up capital is usually set at 25%, so around IDR 2.5 billion, which must actually sit in the company's bank account, not just be written on paper.
Two things soften this in practice. First, the threshold is per KBLI code, so a company with one tightly defined business line has a lower bar than one trying to register five activities. Second, these figures are set by regulation and do get revised, so treat the numbers here as a planning range and confirm the current threshold with your notary or with BKPM before budgeting. Small-scale consulting or services businesses sometimes structure around a single lean KBLI code specifically to keep the capital requirement manageable.
Shareholder, director and commissioner rules
A PT PMA needs a minimum of two shareholders (individuals or corporate entities, foreign or Indonesian, in any ownership split the sector allows), at least one director, and at least one commissioner. The director runs the company day to day and signs on its behalf. The commissioner supervises the director but does not manage daily operations. One person cannot hold both roles simultaneously.
A foreign director who intends to live in Indonesia and draw a salary needs their own work-related KITAS, sponsored by the company itself once it exists. This is a separate application from company registration, with its own document set and its own timeline, detailed in our work permit and residence visa guide. A common mistake is assuming company formation and the director's visa happen as one combined process. They do not. The company has to exist first with its NIB in hand before the KITAS application can proceed.
KBLI codes and sectors closed to foreigners
Indonesia's investment rules divide business activities into three broad groups: open to 100% foreign ownership, open with a foreign ownership cap, and closed to foreign investment entirely (reserved for Indonesian citizens or cooperatives, mainly in small-scale trade, certain agriculture, and a handful of culturally sensitive sectors). The list is reviewed periodically, so a sector that was capped two years ago may now be fully open, or vice versa. Do not rely on information that is more than a year or two old without rechecking it.
F&B, hospitality, villa management, consulting and most tech services are typically open to full foreign ownership, which is why they are the common PT PMA sectors in Bali. Property development, certain tourism sub-sectors and retail trade carry caps or conditions that change the ownership structure you can legally use.
The most expensive mistake: using a nominee shareholder. Some foreigners are told to put a closed or capped sector, or avoid the capital requirement, by having an Indonesian friend, partner or staff member hold shares "on their behalf" through a side agreement. Indonesian law does not recognize nominee arrangements for company shares. The side agreement has no standing in court. The nominee is the legal owner, full stop. We have seen businesses with years of revenue and goodwill disappear overnight when the relationship with the nominee broke down, because there was nothing to enforce. If a sector is closed or capped for foreigners, the honest options are a joint venture with real Indonesian equity, a different legal structure, or a different business line. There is no safe workaround.
PT PMA vs local PT vs representative office
| Structure | Foreign ownership | Can hire staff / sponsor KITAS | Can generate revenue in Indonesia | Typical use case |
|---|---|---|---|---|
| PT PMA | Up to 100%, sector dependent | Yes | Yes | Foreign-owned operating business of any size |
| Local PT (no foreign shareholder) | 0%, Indonesian citizens only | Yes | Yes | Fully local business, or a joint venture where the foreigner takes no shares |
| Representative office (KPPA) | Foreign parent company, no local shareholding structure | Limited, mainly for a handful of expatriate staff | No, cannot invoice or sell directly | Market research or liaison presence before committing to a full entity |
A representative office is sometimes pitched as a cheaper first step. It is cheaper, but it cannot generate revenue, which means it is only useful if you genuinely intend to scout the market before committing, not as a workaround for capital requirements.
What happens after the company is formed
Registration is the start of the obligations, not the end of them. A PT PMA has to file an LKPM (Laporan Kegiatan Penanaman Modal), an investment activity report, on a quarterly basis whether the company is trading yet or not. Missing LKPM filings is a common reason companies run into trouble at license renewal time, and repeated non-filing can lead to license revocation.
Beyond LKPM, expect monthly tax reporting, an annual corporate tax return, manpower reporting once you have employees, and renewal of any sector licenses on their own schedule. If the company sponsors KITAS holders, those also need annual extension and reporting in step with immigration rules. None of this is unusual by regional standards, but it is more paperwork than a company in Singapore or Hong Kong faces, and it is where most foreign owners either hire a local accountant and legal retainer or fall behind without noticing.
If you are weighing company formation against simply working in Indonesia under a sponsored visa while the business structure is sorted out, our work KITAS visa guide covers the interim options, and our firm background explains how we handle both the legal setup and the ongoing compliance side together.
Frequently asked questions
How much does it cost to set up a PT PMA in Indonesia?
Setup fees (notary, NIB, tax registration, virtual office, legal service) typically run from about USD 2,900 to 8,000, depending on sector and how many KBLI codes are registered. This excludes the paid up capital itself, which stays in the company's own bank account as working capital rather than being paid to any third party. Get a fixed quote before starting, since sector licenses add cost.
How long does PT PMA registration take?
A straightforward company with one business line and no special sector license usually takes two to four weeks from signed documents to an active NIB. Add two to four more weeks if a sector-specific license is required or if the bank's compliance review on the corporate account runs long, which has become a more common bottleneck than the government approval steps themselves.
Can a foreigner own 100% of a company in Indonesia?
Yes, in most sectors. Indonesia's Positive Investment List sets out which business activities allow full foreign ownership, which allow partial ownership up to a cap, and which are closed to foreign capital entirely. Hospitality, F&B, consulting and most tech services are typically fully open. The list changes periodically, so confirm the current status of your specific KBLI code before finalizing a structure.
What is the minimum capital for a PT PMA?
The commonly cited planning figure is an investment plan of around IDR 10 billion per business line, excluding land and buildings, with roughly 25% (about IDR 2.5 billion) required as actual paid up capital in the bank. This threshold is set by regulation and gets revised periodically, so treat it as a range to confirm with a notary or BKPM rather than a fixed number.
Do I need an Indonesian partner to start a business in Bali?
No, not for sectors open to 100% foreign ownership, which covers most of what foreigners set up in Bali: villas, restaurants, consulting, agencies, tech services. You only need an Indonesian shareholder if your specific KBLI code falls under a capped or closed category on the Positive Investment List. Using an Indonesian nominee to get around a cap or closure, rather than a genuine joint venture, is not legally enforceable.
What is the difference between a PT and a PT PMA?
A PT is a standard Indonesian limited liability company owned entirely by Indonesian citizens or entities. A PT PMA is the same legal form with foreign capital in the shareholding, which triggers different capital requirements, different licensing steps through BKPM and OSS, and ongoing LKPM investment reporting that a purely local PT does not have to file.
Can a PT PMA sponsor a work visa or KITAS?
Yes. Once the PT PMA has its NIB and tax ID, it can sponsor foreign directors or employees for a work-related KITAS, including the director's own visa if they intend to live in Indonesia and draw salary from the company. This is a separate application after company formation, not part of the company registration itself, with its own document list and timeline.
What happens if I don't file LKPM reports?
Repeated failure to file the quarterly LKPM investment activity report can result in warnings, and eventually in suspension or revocation of the company's business license (NIB) at renewal time. It is required even in quarters where the company has no activity to report. Many owners hand this to a local accountant or legal retainer specifically because it is easy to forget once the business is running.