Understanding What is a PT PMA in Bali – The Complete Guide for Foreign Investors

When it comes to doing business in Bali, one of the most common questions among foreign entrepreneurs is: What is a PT PMA? The term PT PMA stands for Perseroan Terbatas Penanaman Modal Asing, which translates to Foreign Investment Limited Liability Company. This type of company structure is the only legal entity that allows foreign individuals or corporations to conduct business and generate income in Indonesia, including Bali.

If you are a foreign investor planning to open a business, purchase property, or operate in Bali, understanding how a PT PMA works is essential. In this detailed guide by The Bali Lawyer, we explain everything you need to know about PT PMA—its definition, benefits, requirements, and how to set one up successfully.

What is a PT PMA?

A PT PMA (Foreign Investment Company) is a limited liability company established under Indonesian law that allows partial or full foreign ownership. It is regulated by Indonesia’s Investment Coordinating Board (BKPM) and is designed to attract foreign direct investment (FDI).

This company structure gives foreign investors the same rights as local businesses in terms of running a company, employing staff, and generating revenue in Indonesia—within the limits of the Negative Investment List (DNI) or the new Positive Investment List, which specifies which business sectors are open to foreign investment.

In Bali, many foreigners use the PT PMA structure to invest in hospitality, tourism, property management, restaurants, spas, and other service-based industries.

Why Foreigners Choose a PT PMA in Bali

Bali is one of the top destinations for global entrepreneurs, digital nomads, and investors due to its thriving tourism industry and growing economy. However, Indonesian law restricts foreign ownership of businesses and land unless it’s done through a PT PMA.

Here’s why setting up a PT PMA in Bali is the best option for foreign investors:

  1. Legal Business Ownership
    A PT PMA gives foreigners a legitimate way to own and operate a business in Bali without relying on a local nominee.

  2. Ability to Generate Income
    Unlike a representative office or a local sponsorship arrangement, a PT PMA allows you to make profits legally in Indonesia.

  3. Long-Term Investment Security
    A PT PMA provides long-term ownership rights, enabling foreign investors to operate sustainably with a clear legal foundation.

  4. Land Usage Rights (Hak Pakai)
    A PT PMA can obtain Hak Pakai (Right to Use) and Hak Guna Bangunan (HGB) titles for business or property purposes, which are legally recognized under Indonesian property law.

  5. Visa and Work Permit Eligibility
    As a PT PMA shareholder or director, you can obtain a KITAS (Limited Stay Permit), allowing you to reside and work in Bali legally.

  6. Access to Local and International Banking
    Once your PT PMA is registered, you can open a corporate bank account in Indonesia, facilitating international transactions.

Legal Framework and Authority

PT PMAs are governed by the Investment Law No. 25 of 2007 and supervised by BKPM (Badan Koordinasi Penanaman Modal). BKPM ensures that all foreign investment complies with Indonesian regulations, sector restrictions, and licensing requirements.

Each PT PMA must have the following:

  • A business license issued through the Online Single Submission (OSS) system.

  • Articles of Association (Deed of Establishment) notarized and approved by the Ministry of Law and Human Rights.

  • A Tax Identification Number (NPWP) and relevant operational permits.

Structure of a PT PMA

A PT PMA typically has the following structure:

  • Shareholders – Can be individuals or corporations, including foreign entities.

  • Directors – Responsible for daily management and compliance.

  • Commissioners – Provide oversight and ensure legal adherence.

At least two shareholders are required to establish a PT PMA. One of them can be a foreign national or company.

Types of Business Activities Allowed

Foreigners can invest in most sectors in Bali, but the Positive Investment List determines ownership limits. Common PT PMA business activities include:

  • Hospitality (hotels, villas, resorts)

  • Food and beverage (restaurants, cafes, bars)

  • Tourism services (travel agencies, tour operators)

  • Real estate and property management

  • Construction and development

  • Event and entertainment services

  • Consulting, marketing, and digital media

  • Education and training services

The Process of Setting Up a PT PMA in Bali

Establishing a PT PMA in Bali involves several legal and administrative steps. Here is a simplified overview of the process:

  1. Business Planning and Activity Selection
    Choose your business sector and ensure it’s open for foreign investment according to the Positive Investment List.

  2. Company Name Approval
    Reserve a company name that meets the Ministry of Law and Human Rights requirements.

  3. Deed of Establishment
    Draft and sign the Articles of Association before a notary in Indonesia.

  4. Ministry of Law and Human Rights Approval
    The deed must be legalized and approved by the Ministry to officially recognize the company.

  5. Tax Registration (NPWP)
    Obtain your corporate tax number from the tax office.

  6. Business Identification Number (NIB)
    Register the PT PMA on the Online Single Submission (OSS) platform to get your NIB, which acts as your business license.

  7. Sectoral Licenses
    Apply for additional operational permits depending on your business type (e.g., tourism, restaurant, property).

  8. Domicile Letter and Office Address
    Secure a legitimate office address in Bali—this is mandatory for registration.

Once all steps are complete, your PT PMA will be legally recognized and allowed to conduct business activities in Indonesia.

Important Considerations for PT PMA Owners

  1. Minimum Investment Requirement
    Indonesia requires a PT PMA to demonstrate a certain investment plan. This ensures that the business contributes to the local economy.

  2. Reporting Obligations
    Every PT PMA must submit annual reports to BKPM and comply with Indonesian tax obligations.

  3. Foreign Employment
    PT PMA companies can hire foreign employees by obtaining RPTKA (Foreign Worker Utilization Plan)approval.

  4. Office Lease or Property Ownership
    PT PMAs can lease property under Hak Pakai or Hak Guna Bangunan, providing long-term use rights but not full freehold ownership.

  5. Local Partnership
    In some business sectors, partial local ownership may be required depending on foreign ownership limits.

Benefits of Having a PT PMA in Bali

Setting up a PT PMA offers a number of long-term advantages for foreign investors:

  • Full legal compliance for business operations.

  • Credibility when dealing with banks, clients, and government offices.

  • Tax benefits under Indonesia’s investment incentives.

  • Access to business expansion throughout Indonesia.

  • Long-term operational stability, as the PT PMA is a recognized legal entity.

Operating through a PT PMA also protects your investment and minimizes legal risks that could arise from informal or nominee-based business arrangements.

Common Misunderstandings About PT PMA

Many foreign investors believe they can own property or run businesses under personal or nominee names. This is not legally recognized in Indonesia. Without a PT PMA, foreigners are not permitted to earn income or hold land titles in their name.

Some also confuse a PT PMA with a local PT company. The key difference is foreign ownership eligibility—local PTs can only be owned by Indonesian citizens, while PT PMAs are specifically structured for foreign participation.

How The Bali Lawyer Can Help

At The Bali Lawyer, we specialize in company formation, legal structuring, and business compliance for foreign investors in Bali. Our team assists clients throughout the entire PT PMA establishment process—from business planning to registration and post-licensing compliance.

We ensure that your investment and business setup are fully compliant with Indonesian law. Whether you are setting up a tourism company, real estate venture, or hospitality business, we can help you structure your PT PMA legally and efficiently.

Our legal experts handle:

  • PT PMA registration and documentation

  • Business licensing and NIB setup

  • Tax registration and reporting

  • Land and property legal advice for PT PMAs

  • Visa and KITAS processing for foreign directors

Establishing a PT PMA in Bali is the most secure and legal way for foreigners to own and operate a business in Indonesia. It gives you the right to conduct commercial activities, lease land, employ staff, and manage profits within the framework of Indonesian law.

With Bali’s vibrant economy and its reputation as a global tourism hub, setting up a PT PMA provides both stability and opportunity for long-term growth.

At The Bali Lawyer, we are dedicated to guiding foreign investors through every step of the process, ensuring your business is fully compliant, well-structured, and ready to thrive in Bali’s competitive market.

The Bali Lawyer – Your trusted legal partner for PT PMA setup and business law services in Bali.