Indonesia is a treasure trove of exotic landscapes, rich natural resources, and friendly locals. With such immense potential, it’s no wonder that many foreign visitors are attracted to the idea of running a business or investing in this vibrant country. If you’re asking yourself how to start a business in Indonesia as a foreigner, what PT PMA stands for, or what rights and responsibilities you have as the owner of a foreign-owned company, then you’ve come to the right place! VisaStation.id is here to provide you with all the essential information you need.

If you’re eager to start a business in Indonesia, understanding PT PMA is vital. PT PMA stands for Penanaman Modal Asing, which translates to Foreign Investment. This structure allows foreigners to establish a business in Indonesia as a limited liability company (PT) under local law. Typically, this framework attracts larger enterprises, either funded completely by foreign investors (individuals, companies, or even foreign governments) or through joint ventures with local partners. Keep in mind that obtaining the necessary business permits will depend on the nature of your business.

Indonesia is welcoming to foreign investment, but it’s crucial to ensure that your business is categorized in the open sector and appears on the priority investment list released by the BKPM (Investment Coordination Board). This list provides invaluable insights into permissible business lines and the requirements associated with them.

To incorporate a PT PMA, foreign investors must adhere to a minimum investment requirement, generally exceeding IDR 10 billion. For businesses in wholesale trade, food and beverage services, and construction services, this investment amount does not encompass land and buildings. Conversely, for industrial business lines, the investment plan must include funds allocated for land and building.

Also, upon establishing your PT PMA, you’ll need to deposit a minimum capital of IDR 10 billion into Bank Indonesia. After incorporation, you’ll need to ensure tax compliance by securing a Tax Identification Number (NPWP) for your company.

Once you’ve successfully established your PT PMA, you’ll enjoy various benefits that will help you thrive in the Indonesian market. These include:

• Purchasing property in the name of your PT PMA
• Registering your products
• Acquiring your business license
• Preparing operational setups
• Obtaining work and residency permits for your foreign employees

In the past, many PT PMAs were headed solely by foreign directors, complicating matters when they returned to their home countries, often leaving their businesses in limbo. To avoid such challenges, it’s advisable to appoint a local Indonesian citizen as the director. If you must appoint a foreign director, ensure they hold a permanent stay permit card (KITAP), confirming their long-term residency in Indonesia.

Setting up a foreign-owned company in Indonesia as a PT under the Omnibus Law on Job Creation, governed by the Regulation of the Minister of Law and Human Rights 21/2021, involves several key steps:

1. Gathering Required Documents:
   • An electronic statement from the applicant confirming all required documents are ready for PT establishment
   • A copy of the PT establishment deed uploaded to the Legal Entity Administration System (SABH)
   • Minutes of the PT establishment deed or changes made to it
   • Proof of capital deposit for the PT
   • A letter of commitment from the founder to obtain approval from the relevant agencies, if applicable
   • A commitment letter to secure a Tax Identification Number (NPWP) and report for annual tax returns
   • A proof of the complete address for the PT from the building manager or an authorized body
2. Registering the PT:
   • Filling out the necessary forms through the SABH and attaching required documents with the help of a notary
   • Receiving the PT legal entity registration e-certificate from the Minister of Law and Human Rights

Frequently Asked Questions (FAQs)

1. What is a PT PMA in Indonesia?

A PT PMA, or Penanaman Modal Asing, is a legal structure in Indonesia that allows foreign investors to establish a limited liability company in the country, ensuring compliance with local laws.

2. What are the capital requirements for a PT PMA?

The minimum capital requirement for establishing a PT PMA is IDR 10 billion, which must be deposited with Bank Indonesia.

3. Can a foreigner be the sole director of a PT PMA?

While it is possible for a foreigner to be appointed as a director, it’s often recommended to have an Indonesian citizen in this role to avoid potential operational challenges.

4. How long does it take to establish a PT PMA?

The process can vary, but on average, it takes about 3 to 6 months to complete all legal requirements and obtain the necessary approvals.

5. Is a business license required to operate a PT PMA?

Yes, obtaining the necessary business licenses is crucial to legally operate your PT PMA in Indonesia, as it varies based on the type of business.