Indonesia is one of the largest economies in Southeast Asia, and many sectors are open to foreign ownership. For foreign investors, the standard route into the market is a PT PMA: a limited liability company with foreign shareholding. This guide walks through what a PT PMA is, what to check before you start, and each step of the setup process.
What is a PT PMA?
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing, a limited liability company (PT) with foreign investment (PMA). Any company in Indonesia with at least one foreign shareholder, whether an individual or a company, is set up as a PT PMA. A company owned only by Indonesians is a PT PMDN (domestic investment).
A PT PMA lets you own and run your business in your own name, sign contracts, hire staff, hold licenses and sponsor investor KITAS for its shareholders and directors.
Before you start: check your KBLI
Every business activity in Indonesia has a five-digit KBLI code (Indonesia’s standard business classification). Your KBLI code is the starting point of the whole process, because it determines:
- whether the activity is open to foreign investment, and up to what percentage of ownership;
- whether a local partner is required;
- which licenses and permits you will need;
- any sector-specific rules and capital requirements.
Choosing the wrong KBLI code can mean the wrong licenses, or a structure that has to be changed later. That is why we always confirm the KBLI code and ownership rules first.
Capital and investment requirements
A PT PMA must meet minimum investment and paid-up capital requirements set by regulation. These requirements can differ by sector and change over time, so we confirm the current figures that apply to your plan when you contact us, before you commit.
Setting up a PT PMA, step by step
1. Confirm your business line and structure
We identify the KBLI code(s) for your activities, check the foreign ownership rules, and plan the structure: who the shareholders are, the ownership split, the capital, and who will serve as directors and commissioners.
2. Reserve the company name
The company name is checked and reserved with the Ministry of Law. Indonesian naming rules apply, so it is useful to have a few alternatives ready.
3. Sign the Deed of Establishment
The Deed of Establishment (Akta Pendirian) is signed before an Indonesian notary. It sets out the company’s articles of association, shareholders, capital structure, business activities and management.
4. Get Ministry approval
The deed is registered with the Ministry of Law, which issues an approval decree (SK). From this point, your PT PMA is a legal entity.
5. Register on OSS and obtain your NIB
The company is registered on OSS, Indonesia’s online business licensing system, and receives its NIB (Business Identification Number). OSS uses a risk-based approach: the licenses you need depend on the risk level of your KBLI activities.
6. Tax registration, bank account and capital
A tax ID (NPWP) is required for the company and, in some cases, for its shareholders. It is not always issued automatically during registration, so we make sure each required registration is in place. The company then opens a corporate bank account and deposits its paid-up capital.
7. Sector licenses and investor KITAS
Depending on your activity, additional licenses or certifications may be needed before you can operate. Once the company is in place, it can sponsor investor KITAS (limited stay permits) for its foreign shareholders and directors. The investor KITAS is linked to the company, which is why we handle it as part of the setup.
What you need to prepare
- Passport copies of all shareholders, directors and commissioners (or company documents if a shareholder is a legal entity);
- the proposed company name, with alternatives;
- a description of your planned business activities;
- the shareholding structure and capital plan;
- a company address in Indonesia.
After setup: ongoing obligations
Setting up the company is the beginning, not the end. A PT PMA has ongoing obligations, including regular LKPM investment activity reports and tax filings. Missing them can cause problems with your licenses and your standing with the authorities. We can keep you compliant after setup. See our after-setup services.
A common, costly shortcut: nominee arrangements
Some investors are advised to put the company in the name of an Indonesian individual to avoid the PT PMA process. We strongly advise against it. Nominee agreements are void under Indonesia’s Investment Law, which can leave you with no legal claim to your own business. A properly structured PT PMA protects your ownership from day one.
Frequently asked questions
Can a foreigner own 100% of a company in Indonesia?
Yes, in many sectors. Some business lines are restricted or require a local partner. Your KBLI code decides which rules apply.
Do I need to live in Indonesia to own a PT PMA?
No. Shareholders do not need to live in Indonesia. If you plan to stay and manage the business, the company can sponsor your investor KITAS.
Is the investor KITAS part of the setup?
Yes. The investor KITAS is linked to your company, so we arrange it as part of the setup for shareholders and directors.
Start with the right path
Every PT PMA setup depends on the business activity, the sector and the structure. The first step is to confirm your exact path. Injaz was founded by a law firm, and we guide investors through each step in Bahasa Indonesia, English or Arabic.
Tell us about your plans → or see our company setup services.