How to Establish a Foreign-Owned Company (PT PMA) in Indonesia
Establishing a foreign investment company in Indonesia—commonly known as a PT PMA (Perseroan Terbatas Penanaman Modal Asing) allows foreign investors to establish a legal business presence and conduct permitted business activities in Indonesia, subject to applicable investment, licensing, and sector-specific requirements.
The incorporation process involves several important steps, from determining the appropriate business classification to obtaining the necessary registrations and business licenses.
## Step 1: Determine Your KBLI Classification and Foreign Ownership Requirements
Before establishing a PT PMA, you need to determine the appropriate KBLI (Indonesian Standard Industrial Classification) for your intended business activities.
The applicable foreign ownership requirements depend on the business sector and the current investment regulations. While some business activities may allow full foreign ownership, others may be subject to ownership restrictions, specific requirements, or sector-specific licensing.
It is therefore important to confirm the applicable KBLI and foreign investment requirements before proceeding with incorporation.
## Step 2: Review Investment and Capital Requirements
PT PMA structures are subject to minimum investment and capital requirements.
As a general rule:
Minimum investment value: More than IDR 10 billion, excluding land and buildings, subject to applicable sector and KBLI requirements.
Minimum issued and paid-up capital: IDR 2.5 billion per company, unless a different requirement applies under specific regulations.
The applicable requirements may vary depending on the business activity and sector. A proper review should therefore be conducted before establishing the company.
## Step 3: Reserve the Company Name and Prepare the Deed of Establishment
The proposed company name must comply with Indonesian company naming requirements and be processed through the relevant Ministry of Law system.
A licensed Indonesian Public Notary then prepares the Deed of Establishment (Akta Pendirian), which sets out important information such as the company’s shareholders, capital structure, management, and business activities.
## Step 4: Obtain Legal Entity Approval and Tax Registration
After the Deed of Establishment has been executed, the company proceeds with the legal entity registration process through the Ministry of Law.
Once the company has obtained its legal entity status, the company proceeds with the relevant tax registration, including its Tax Identification Number (NPWP).
## Step 5: Obtain the NIB Through OSS
The company then registers its business activities through the Online Single Submission (OSS) system and obtains its Business Identification Number (NIB).
The NIB serves as the company’s primary business identification number and is also connected to several government registration and licensing functions. Depending on the business activity, additional requirements may apply, including customs, social security, and other sector-specific registrations.
## Step 6: Fulfill Spatial Planning and Business Licensing Requirements
Depending on the location, business activity, and risk level, the company may need to fulfill additional basic requirements and obtain the relevant business licenses or supporting licenses through OSS.
These may include spatial planning requirements such as KKPR, risk-based business licensing, and PB UMKU (Business Licensing to Support Business Activities) where applicable.
The required licenses depend on the company’s KBLI, location, business scale, and risk classification.
## Step 7: Start Operations and Maintain Compliance
Once the required registrations and licenses have been obtained, the company can commence its permitted business activities, subject to fulfillment of all applicable operational requirements.
After establishment, a PT PMA must also maintain ongoing corporate, tax, employment, and business compliance obligations.
Need Help Establishing a PT PMA?
Every business has different KBLI, ownership, licensing, and compliance requirements.
Our team can help you assess your business activities, determine the appropriate structure, and guide you through the PT PMA establishment process in Indonesia.
