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