Understanding PT PMA Minimum Capital Requirements in Indonesia

What is a PT PMA?

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned limited liability company in Indonesia. It is the primary legal structure for foreign investors who wish to operate a business in Indonesia. The establishment of a PT PMA is regulated by the Indonesian Investment Coordinating Board (BKPM) and must comply with the country’s foreign investment laws and requirements.

Minimum Capital Requirement for PT PMA

The Indonesian government has set minimum capital requirements for foreign-owned businesses to ensure they contribute to the local economy. The capital requirements depend on the nature of the business and the level of foreign ownership.

General Minimum Capital Requirement

For most PT PMAs, the standard minimum capital requirement is IDR 10 billion (approximately USD 650,000). This capital must be reflected in the company’s financial structure, but not necessarily deposited in full immediately.

Paid-Up Capital Requirement

The minimum paid-up capital, which must be injected at the time of company establishment, is at least 25% of the total minimum capital. This means that for a PT PMA with a minimum capital of IDR 10 billion, the minimum paid-up capital must be IDR 2.5 billion (approximately USD 162,500).

Sector-Specific Capital Requirements

While the general requirement applies to most industries, certain sectors may have specific capital requirements, depending on their nature. These include:

  • Manufacturing & Heavy Industries – Often require higher minimum capital due to infrastructure and operational costs.

  • Trading & Retail – May have different capital requirements based on whether the company engages in wholesale or direct consumer sales.

  • Tourism & Hospitality – Capital requirements may vary based on the scale of operations (e.g., small boutique hotels vs. large resorts).

Can a PT PMA Have a Lower Capital Requirement?

In some cases, foreign investors may establish a PT PMA with a lower capital amount by partnering with a local Indonesian entity. This approach, however, requires careful legal structuring to ensure compliance with local regulations and avoid potential ownership conflicts.

Proof of Capital for PT PMA Registration

To register a PT PMA, proof of capital is required. This typically involves:

  • A statement from the company’s shareholders regarding the capital injection.

  • A bank statement confirming the availability of the paid-up capital.

  • Documentation submitted to BKPM for approval.

Steps to Establish a PT PMA in Indonesia

Setting up a PT PMA requires careful planning and compliance with various legal steps. Below is a general overview of the process:

1. Business Classification and Capital Determination

Before registration, investors must determine their business classification under the Indonesian Standard Industrial Classification (KBLI) and ensure compliance with the required minimum capital.

2. Name Reservation

The company name must be unique and comply with Indonesian naming regulations.

3. Deed of Establishment

A notary drafts the company’s deed of establishment, which must be legalized by the Ministry of Law and Human Rights.

4. Obtaining BKPM Approval

The Investment Coordinating Board (BKPM) reviews and approves the PT PMA application.

5. Tax Registration

The company must obtain a Tax Identification Number (NPWP) and register with the local tax office.

6. Business License and Other Permits

Depending on the industry, the company may need additional operational licenses, such as an Importer Identification Number (API) or tourism permits.

7. Capital Injection

Shareholders must provide proof of paid-up capital to meet legal requirements.

Why the Minimum Capital Requirement is Important

The minimum capital requirement serves several purposes:

  • Ensures business stability – Demonstrates financial capability to operate in Indonesia.

  • Builds investor confidence – Assures stakeholders of the company’s credibility.

  • Regulatory compliance – Avoids legal issues that could arise from undercapitalized companies.

How The Bali Lawyer Can Assist

Understanding and complying with PT PMA minimum capital requirements can be complex. At The Bali Lawyer, we offer expert legal guidance for foreign investors, ensuring a seamless registration process and compliance with all regulatory obligations.

Our Services Include:

  • Advising on capital structuring and investment strategies.

  • Assisting with BKPM applications and approvals.

  • Drafting and legalizing corporate documents.

  • Ensuring compliance with tax and business licensing requirements.

 

Meeting Indonesia’s PT PMA minimum capital requirement is crucial for establishing a legally compliant and financially stable business. Whether you are launching a startup or expanding an existing enterprise, ensuring the correct capital structure is essential. The Bali Lawyer is here to help you navigate the process and ensure your business is set up for success in Indonesia.

For professional legal assistance with setting up your PT PMA, contact The Bali Lawyer today.