What is PMA Indonesia?

PMA Indonesia, or Penanaman Modal Asing, refers to a foreign-owned company established under Indonesian law. This legal entity allows foreign investors to engage in business operations in Indonesia, opening up avenues for generating revenue and profit.

A PMA company is recognized as a legitimate organization that grants foreign investors the opportunity to invest and conduct business within the country. Similar to any other Indonesian corporation, a PMA possesses the same rights and responsibilities. Establishing a PMA requires at least two owners, who can be individuals or legal entities, such as investment firms or government bodies. Moreover, the company must have at least one director and one commissioner appointed in its organizational structure. A PMA can also employ international staff, provided they have obtained the necessary permits.

Why Would Someone Want to Set Up a PMA Firm in Indonesia?

Indonesia is an attractive destination for international investors due to its diverse commercial sectors. Over the past few years, the value of investments in the country has surged significantly. The Indonesian government has also streamlined the investment process for foreign investors through the issuance of Presidential Regulation No. 10 of 2021, which features a Positive Investment List.

Before this regulation, foreign investors had to be aware of which sectors were open, partially open, or entirely closed to foreign investment, as outlined in the Negative Investment List (Daftar Negatif Investasi or DNI). If you recognize this potential and aim to earn income or engage in direct sales in Indonesia, establishing a PT PMA is essential.

Business Sectors of PMA

A PMA company can operate across various sectors. Here’s a breakdown of the types of sectors where foreign investments are applicable:

• Open Sectors: These sectors allow foreigners to own 100% of the company. There are no specific requirements for creating a new PMA or starting a franchise in these industries, which include restaurants, bars, cafés, sports centers, swimming pools, football fields, and tennis courts.
• Open with Conditions: These are industries that welcome international investment but come with specific conditions. For instance, the percentage of foreign ownership varies by industry—most commonly, companies are allowed 49% to 51%, with certain industries permitting up to 70% or 67%. This category covers sectors such as mining, energy, hotels, and various sports facilities.
• Closed Sectors: These areas are restricted from private foreign enterprises, often involving state security and strategic interests. The government determines which commercial sectors are closed to foreigners, typically reserving them for Indonesian nationals. Notably, sectors like tour and travel services have been included in this list since 2016.

Who Can Establish a PT PMA Company?

Foreign individuals or organizations are eligible to establish a PT PMA company, allowing them to become shareholders holding up to 100% of the company’s equity. Unlike PT PMDN companies, which can only be owned 100% by local individuals or businesses, a PT PMA offers more flexibility for foreign entities.

To establish a PMA company, the following criteria must generally be met:

• 1 Director: A foreigner can serve as the director of a PT PMA, obtaining a KITAS (stay permit) in the process.
• 1 Commissioner: This role may be filled by either a local or foreign individual. The commissioner’s main duty is to oversee and monitor the actions of the business directors, ensuring that all operations align with the company’s objectives.
• 2 Shareholders: A PMA company must have a minimum of two shareholders, whether they are individuals or legal entities.

Regulations for PMA Companies

The Investment Negative List provides essential insights regarding which sectors are currently open for PMA investments. The latest guideline is established under Presidential Regulation Number 44 of 2016, elaborating on the status of various economic sectors in terms of their accessibility to foreign investments.

Additional Indonesian laws related to foreign-owned companies include the Capital Investment Law Number 25 of 2007 and the Head of Investment Coordinating Board Regulation Number 14 of 2015. These regulations define what constitutes a PMA company in Indonesia and emphasize that PMA firms must acquire specific permits prior to commencing operations in the country. Additionally, a PT PMA is required to maintain a minimum capital investment of IDR 10 billion, with 25% of this amount needing to be paid prior to the company’s registration with the Indonesian government.

How Can VisaStation.id Help You?

To navigate the complex landscape of investment regulations and ensure compliance, it is advisable to seek assistance from skilled legal advisors. By doing so, you can focus on establishing your business in Indonesia while meeting your revenue goals.

VisaStation.id is your trusted partner in Bali, Indonesia. We are dedicated to providing you with high-quality services tailored to your needs, ensuring a seamless and efficient process aligned with Indonesian regulations.

For more information, feel free to reach out to us at +6287701 0000 11 or email us at info@visastation.id.