Foreign-Owned Company (PT PMA)

Foreign-Owned Company or Perseroan Terbatas Penanaman Modal Asing (PT PMA) is the common way for foreigner to operate a company in Indonesia

Setting up a Foregin-Owned Company (PT PMA)

  • A foreign-owned company or Perseroan Terbatas Penanaman Modal Asing (PT PMA) is the common way for foreign investors to operate a company in Indonesia. It’s roughly similar to a Limited Liability Company in structure and function.
  • A foreign-owned company (PT PMA) does not need to have a local shareholder if their industry is not mentioned in the Negative Investment List, which means that 100% of the capital can be owned by foreigners.
  • If their industry is listed in the Negative Investment List, there will be a special rule where the foreign-owned company (PT PMA) must have a specified percentage of local Indonesian shareholders.
  • Therefore, for specific restrictions, a foreign-owned company (PT PMA) needs to be a joint venture with Indonesian citizens or Indonesian legal entities to be able to run their businesses in Indonesia.
  • Regarding the business location, foreign companies are allowed to use virtual offices or physical space in a registered office building as their business address.

Basic Requirements of a Foreign-Owned Company (PT PMA)

Organizational Structure

The minimum organizational requirements to establish a foreign-owned company (PT PMA) are as follows:

  • 2 foreign (individual or foreign corporation) or combination with local shareholders
  • 1 director (at least there’s 1 local director)
  • 1 commissioner (can be a foreigner or local)

Minimum Investment Value

While local companies can be more flexible, a foreign company needs to have an investment plan valued at minimum IDR 10 billion.
To be exact, 25 percent of this – IDR 2.5 billion – needs to be paid-up capital upfront.
This means that foreign companies have to be categorized as large companies according to Indonesian laws.

Document Requirements

  • Proposed company name (three words in Bahasa Indonesia) and domicile of the company
  • Purposes, objectives and business activities of the company
  • (If using a virtual office) virtual office address and its lease agreement provided by the office provider
  • Number of shares, share classes (if any), including the number of shares in each class, rights attached
    to each share, and nominal value of each share
  • Structure of shareholders, directors, and commissioners of the company/legal entity. The shareholders and commissioners should be local residents of Indonesia.

If the shareholder is an individual

  • Copy of Personal ID (KTP)
  • Copy of Tax ID (NPWP)

If the shareholder is a company/legal entity

  • Copy of Article of Association (AKTA)
  • Copy of Deed of Establishment (SK Kemenkumham) showing the board of directors

Steps to Register a Foreign-Owned Company (PT PMA)

1Register company name with the Ministry of Law and Human Rights.
2Notarize Article of Association (AKTA Perusahaan).
3Ratify the Deed of Establishment or Corporate Legal Entity (SK Kemenkumham) with the Ministry of Law and Human Rights.
4Obtain company Tax Payer Registration Number (Tax ID or NPWP) with the local tax authority.
5Obtain Single Business ID Number (NIB) from Online Single Submission (OSS).
6Obtain the other business licenses (if the business classification requires another license) via Online Single Submission (OSS) such as Commercial License for specific business classifications.
7Register for the other respective commitments for employee requirements via Online Single Submission (OSS) such as national social security insurance (BPJS) and Employment Report (WLK).

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