PT PMA 101 – Easy and Simple Explanations
Property investment is one of the most promising businesses. Establishing a foreign investment company (PT PMA) is the safest and lawful way for foreigners if they want to initiate business operations in Indonesia.
Owning PT PMA offers you more benefits for property investment than engaging in property investment as a non-Indonesian individual. In this article, we’ll discuss PT PMA 101 in an easy and simple way.
What is PT PMA?
PT PMA (Perseroan Terbatas Penanaman Modal Asing) or foreign investment company is a business entity that has foreigners as investors and is established in Indonesia region. It can be owned 100% by foreigners, but it’s possible there’s a joint venture in the company.
The Indonesian Government regulates Penanaman Modal Asing (PMA) through Government Regulation stated in Undang-Undang Nomor 25 Tahun 2023, which previously regulated PMA through Undang-Undang Nomor 6 Tahun 2007.
Foreigners who want to do investment activities to operate a business in Indonesia, either using foreign capital entirely or venture joint with local investors, are required to establish PT PMA.
Additionally, foreign investment companies must adhere to the taxation and employment regulations enforced by the Indonesian government, as the company is established within Indonesia's jurisdiction.
If you’re a foreigner who wants to have a foreign investment company, you need to consider the requirements of a foreign investment company establishment in Indonesia.
PT PMA Requirements
Here are the PT PMA requirements that you should consider:
1. Business Structure
- At least, there are 2 (two) shareholders consisting of all foreign individuals, all foreign legal entities, or a combination of local shareholders.
- If there’s a foreigner who acts as a director, the company is required to sponsor KITAS for the director.
- It’s allowed to not have a local director. However, there are certain business types that require a local director–trading business, for example.
- There’s a certain position of director that isn’t allowed to be filled by a foreigner – Director of Personalia.
- 1 (one) commissioner (can be local or foreign). Still, the company needs to sponsor the foreign commissioner with KITAS.
2. Investment Value
- The minimum investment value for a foreign investment company is Rp 10,000.000.000.
3. Document Prerequisites
- Suggested business name (can use English or Bahasa Indonesia) and the company’s domicile.
- Business objectives, purposes, and operations.
- Structure of organization (directors and commissioners).
- Personal ID (KTP) and Tax ID (NPWP) for individual shareholders.
- The documents needed to obtain the Deed of Establishment are submitted to the Notary.
- Deed of PT PMA Establishment for legal entity shareholders. The Deed will be used for the licensing process via Online Single Submission Portal.
Are All Foreigners Can Establish PT PMA In Indonesia?
All foreigners can make capital investments through foreign investment companies in Indonesia, as long as they can fulfill all the requirements. There are some requirements if you want to establish PT PMA in Indonesia:
- The foreigners need to establish a company based on available business types in Indonesia, as stated in Peraturan Presiden Nomor 10 Tahun 2021 and Peraturan Presiden Nomor 49 Tahun 2022.
- Have a PT company that is at least owned by two shareholders.
- The minimum investment number is Rp10.000.000.000.
- Only can operate a big-scale business, regulated by Peraturan Pemerintah Nomor 5 Tahun 2021.
- Must have a physical building as an office or production site. Virtual office isn’t allowed.
PT PMA Ownership Advantages
PT PMA ownership has many advantages such as:
- PT PMA has the same rights and responsibilities as local PT.
- The smallest organizational structure is one director and one commissioner.
- The minimum number of shareholders is 2 (two) – individuals or legal entities.
- The business licensing process can be done through one portal (Online Single Submission Portal).
- Foreign investors can own 100% or only part of the company. However, in certain types of business activity.
- Cheaper import and on-site tax rate.
Available Types of Business for PT PMA
There are types of businesses that you can invest in through PT PMA, such as:
- Property investment.
- Nature hospitality – ecotourism services.
- Fixed telecommunication network.
- Mobile telecommunication network.
- Content-service telecommunication network (premium SMS, ringtone, etc).
- Internet connection services.
- Internet café.
- Internet access services.
- Data communication services.
- Gas and oil construction services.
- Cigarettes industry.
- Art gallery.
- Survey services.
- Furniture industry.
- Pharmacies industry.
- Medical device industry (class B, C, and D).
Ready to Unlock Your Success?
Learning a brief overview of PT PMA is a good start for you who want to start your investment journey. Knowing the basic knowledge will make it easier to learn more about establishing a foreign investment company in Indonesia.
Having PT PMA in Indonesia lets you initiate business legally as a non-Indonesian citizen. This is a golden opportunity for you to unlock your success.