PT PMA Requirements in Indonesia: Complete Legal Guide for Foreign Investors

Setting up a business in Indonesia as a foreign investor can be an exciting venture, offering access to Southeast Asia’s largest economy. One of the most common and secure ways to establish a foreign-owned company is through a PT PMA (Perseroan Terbatas Penanaman Modal Asing), or Foreign Direct Investment Limited Liability Company. At The Bali Lawyer, we specialize in providing full legal services to assist investors in understanding and complying with the PT PMA requirements, ensuring a smooth and fully compliant establishment process in Indonesia.

This comprehensive guide outlines everything you need to know about PT PMA requirements in Indonesia—from legal frameworks and eligibility to structure, licensing, and reporting.

What is a PT PMA in Indonesia?

A PT PMA is a legal entity formed under Indonesian law to allow foreign individuals or corporations to operate a business in the country. This type of company grants foreign investors the right to own equity shares, sign legal contracts, and participate in profit-making activities in various business sectors.

The Indonesian government encourages foreign investment through the PT PMA structure, making it the preferred legal vehicle for international entrepreneurs and enterprises looking to establish a long-term presence.

Why Choose a PT PMA?

Foreign investors opt for a PT PMA because it offers:

  • Legal ownership rights under Indonesian law.

  • Access to regulated business sectors with specific foreign ownership allowances.

  • Eligibility to sponsor foreign workers and issue work and stay permits (KITAS).

  • Greater credibility with banks, vendors, and partners in Indonesia.

  • Opportunity for scalability and long-term operations in Indonesia.

With a PT PMA, your business can lawfully engage in a wide range of commercial activities while maintaining compliance with Indonesia’s investment regulations.

Who Can Establish a PT PMA?

A PT PMA can be established by:

  • Foreign individuals.

  • Foreign legal entities (companies, corporations).

  • Joint ventures between foreign and Indonesian parties.

It is important to note that the business sector you plan to operate in must be open to foreign ownership. Some industries are fully open, partially open with limitations, or entirely closed to foreign investment under the Positive Investment List (Daftar Positif Investasi).

Key PT PMA Requirements

The following are the essential requirements for setting up a PT PMA in Indonesia:

1. Business Activities Must Be Permissible

Before proceeding, ensure the business activity you wish to engage in is allowed for foreign ownership. This is regulated by the Presidential Regulation No. 10/2021 and related updates. Sectors are categorized as:

  • Open with 100% foreign ownership.

  • Open with conditions (limited percentage of foreign shares).

  • Closed to foreign investment.

2. Minimum Investment Plan

The Indonesian Investment Coordinating Board (BKPM) requires a minimum investment plan of IDR 10 billion(approximately USD 650,000) per business sector. This includes:

  • Paid-up capital of at least IDR 2.5 billion.

  • Working capital and fixed assets allocation that meets the overall investment threshold.

This investment plan is not required upfront in full cash, but must be reflected in financial planning documents and eventually implemented.

3. Minimum Paid-Up Capital

As part of the investment plan, the paid-up capital must be deposited into a local Indonesian bank account under the company’s name. The minimum amount is IDR 2.5 billion and must be verified via a capital statement letter signed by the shareholders.

4. Shareholder Structure

A PT PMA must have at least:

  • Two shareholders, which may be a combination of individuals or legal entities.

  • One director and one commissioner (can be foreign or local residents).

  • A registered office address in a commercial zone, not residential.

The ownership percentage will depend on sectoral restrictions, if any.

5. Domicile Letter and Office Address

A legal address is required to incorporate a PT PMA. This must be in a commercially zoned building, and a domicile letter from the local village or district authority must be obtained.

6. Company Deed and Approval

A notarial deed of establishment must be created in Bahasa Indonesia and signed by all shareholders. This deed will include:

  • Company name

  • Articles of Association

  • Business objectives

  • Shareholder structure

  • Management structure

The deed must then be approved by the Ministry of Law and Human Rights.

7. Business Identification Number (NIB)

Once established, the PT PMA must obtain an NIB (Nomor Induk Berusaha), which serves as the business registration number. It is issued through the Online Single Submission (OSS) system. This license is necessary to legally operate and conduct business activities in Indonesia.

8. Sectoral Licenses

Depending on your business category, additional sectoral licenses may be required after the NIB is issued. These include:

  • Tourism Licenses

  • Trading Licenses

  • Construction Licenses

  • Food & Beverage Licenses

  • Education Permits, etc.

Each sector has specific requirements and timelines.

9. Tax Registration and Reporting

Your PT PMA must register for taxation and obtain a Taxpayer Identification Number (NPWP). You are required to:

  • File monthly and annual tax reports.

  • Pay income tax, VAT, and other relevant taxes.

  • Hire a certified accountant or tax consultant to ensure compliance.

10. Manpower and Employment Compliance

If your company plans to employ foreign staff, you must obtain:

  • RPTKA (Foreign Worker Utilization Plan)

  • IMTA (Work Permit)

  • KITAS (Temporary Stay Permit)

Additionally, Indonesian labor laws must be followed for all local employees.

Ongoing Compliance for PT PMA

Once your company is established, compliance with Indonesian law is an ongoing obligation. This includes:

  • Annual financial statements submission.

  • BKPM investment reporting (LKPM).

  • Corporate income tax reporting.

  • Company updates and renewals for licenses.

Failure to comply can result in penalties, suspension, or revocation of business licenses.

Common Challenges and How to Overcome Them

Setting up a PT PMA is a regulated and bureaucratic process. Common hurdles include:

  • Navigating sectoral restrictions.

  • Delays in license approvals.

  • Misunderstanding of capital requirements.

  • Language and communication barriers.

At The Bali Lawyer, we simplify the entire process. Our experienced legal team handles documentation, government interaction, and compliance, giving you peace of mind from start to finish.

Why Work With The Bali Lawyer?

We are a trusted legal partner for foreign investors in Bali and throughout Indonesia. Our services cover every stage of business setup and ongoing legal support. With a deep understanding of Indonesian corporate law and investment regulations, we ensure your PT PMA is established professionally and operates legally.

 

Establishing a PT PMA in Indonesia is a strategic step for foreign investors who wish to operate a fully legal and scalable business. The process involves several regulatory steps, capital requirements, and licensing protocols—but with the right legal guidance, it becomes a clear and manageable path.

Whether you’re starting a trading company, hospitality business, digital startup, or manufacturing operation, understanding the PT PMA requirements is essential to success. At The Bali Lawyer, we are committed to helping you navigate every step of the process.

Contact us today to get expert legal assistance for your PT PMA setup in Bali or anywhere in Indonesia.