July 9, 2016

PMA (Foreign Investment)

What is PT Foreign Investment (PT PMA)?

PT Foreign Investment (PMA) is a limited liability company established under Indonesian law. Regarding foreign investment itself, the Investment Law defines it as an investment activity to do business in the territory of the Republic of Indonesia which is carried out by foreign investors, both those who use foreign capital fully and those who are associated with domestic investors.

Although both belong to the category of limited liability companies, PT PMA has a difference with PT in general. In PT PMA, both Foreign Citizens and Foreign Legal Entities can establish PT PMA in Indonesia. However, in some aspects of the business being carried out, PT PMA still needs Indonesian citizens and Indonesian legal entities to run their businesses. For example, provisions regarding the limit of foreign share ownership in the Negative Investment List (DNI) and regarding the position of personnel director who are prohibited from being occupied by foreign workers as stipulated in the Presidential Regulation of the Republic of Indonesia Number 20 of 2018.

If you have a plan to start a business in Bali, Indonesia, we can help you to setup your business, in compliance with national and local laws. Within the shortest possible  time you can already start your business and work legally in Bali. We do all your paperwork in a fast and efficient way.

The process involves extensive consulting in order to provide you the best solution for your field of work. Not all businesses can be run (totally) by foreigners however, but we can provide solutions where your control is maximized and your investment is safe.

Included is the documentation of share holder agreements and other requirements.

We can also guide with acquisition and legal processing of property, owned by your PMA.

And of course we can provide you with the necessary stay and work permits.

Procedure for Establishment of PT PMA

  1. Make sure your company has complete PT establishment in general, such as: a. Deed of establishment of PT set by Indonesian Notary Public, b. Decree of the Minister of Law and Human Rights concerning the ratification of the legal entity PT register by Indonesian Notary Public, c. Have a NPWP company
  2. Minimum BKPM Investment Requirements: * Minimum investment by the PT PMA must be more than 10 billion Rupiah. This investment amount excludes investments in land and buildings; The paid-up capital of the PT PMA must me more than 2.5 billion Rupiah; and the minimum value per share is 10 million Rupiah.

Regarding the percentage of share ownership calculated based on the nominal value of the shares, and for each shareholder, the ownership of shares is at least Rp 10 million

  1. Has a Business Registration Number (NIB) and other business permits that can be submitted through the Online Single Submission (OSS) or BKPM system in accordance to the company’s business sector
    NIB is the identity of the business actor issued by the OSS Institution after the business actor registers. NIB also applies as:
    a. Company Registration Certificate (TDP)
    b. Import Identification Number (API), if you will carry out import    activities
    c. Customs access, if you will
  2. The location of business activities must be in accordance with the local Spatial Plan.
  3. Complete other special permits needed for relevant ministries / institutions, which are related to the corporate sector
  4. In the case of a company that has a principle permit, investment permit, investment registration, or business permit, which is still valid, other license service applications needed must include the NIB as a requirement.

If you are unsure please contact us