Setting up a company in Indonesia has never been more attractive. As Southeast Asia’s largest economy, Indonesia continues to welcome foreign investment across key sectors, supported by streamlined licensing procedures, digital submissions via the Online Single Submission (OSS RBA) system, and clearer regulations governing foreign ownership.
For investors exploring opportunities in this dynamic market, understanding the differences between PT PMA, PT, and Representative Office structures is essential. Each legal entity comes with its own requirements, limitations, and strategic advantages depending on your business goals, investment commitments, and desired operational scope.
This article provides the latest, comprehensive breakdown of these business entities and guides you through the company registration process in Indonesia.
Types of Company in Indonesia
Indonesia offers several legal structures tailored for both local and foreign investors according to your business needs. The three most relevant for international entrepreneurs are:
- PT PMA (Perseroan Terbatas Penanaman Modal Asing) – A foreign-owned limited liability company.
- PT (Perseroan Terbatas) – A locally owned limited liability company, with limited openings for foreign shareholders under specific circumstances.
- Representative Office (Kantor Perwakilan Perusahaan Asing / KPPA) – A non-revenue-generating liaison office for foreign parent companies.
Each serves different purposes depending on ownership, long-term plans, and the type of business activities you intend to conduct.
1. PT PMA (Foreign-Owned Company)
A PT PMA is the primary vehicle for foreign investors to legally conduct business, generate revenue, hire employees, and hold assets in Indonesia.
What Is PT PMA?
PT PMA stands for Foreign Direct Investment Limited Liability Company. It is regulated by the Ministry of Investment / BKPM and permits up to 100% foreign ownership, depending on the business classification as specified in the Positive Investment List (Daftar Investasi Prioritas) under Presidential Regulation No. 49/2021—currently replacing the former Negative Investment List (DNI).
Key Characteristics
- Foreign shareholders (individuals or foreign companies) allowed.
- Can engage in commercial and operational activities.
- Can issue invoices under the company’s Indonesian tax ID (NPWP).
- Must comply with minimum capital requirements.
Minimum Capital Requirements for PT PMA Company Registration in Indonesia
The typical requirement remains:
- IDR 10 billion minimum issued capital
- Recommended: IDR 2.5 billion paid-up capital, declared during incorporation
Certain industries, particularly those in construction, mining, logistics, or high-technology, may require higher capital.
Benefits of Establishing a PT PMA
Setting up a PT PMA provides the following advantages:
- Full legal ability to operate commercially in Indonesia
- 100% foreign ownership in many permitted sectors
- Eligibility to apply for Investor KITAS (stay permit without requiring a work permit)
- Ability to open local bank accounts, apply for business licenses, and import goods
- Increased trust and recognition among Indonesian partners, clients, and suppliers
PT PMA Registration Requirements
To incorporate a PT PMA, you must:
- Prepare a company deed drafted by a notary
- Establish a registered office (physical or virtual office)
- Appoint minimum 2 shareholders, 1 director, and 1 commissioner
- Select business activities using KBLI codes (Indonesia’s official business classification)
- Obtain a Business Identification Number (NIB) through OSS
- Secure operational & commercial licenses (if required)
- Investor and Work Permit for Foreignt Shareholders and Talents
Once the PT PMA is active, it must also obtain:
- NPWP (Tax Number)
- Business licenses relevant to its sector
- Employment reporting for foreign workers (if any)
2. PT (Local Company)
A PT, or local limited liability company, is the entity used by Indonesian citizens or legal entities. While primarily intended for locals, foreigners can still participate under certain conditions.
When Can Foreigners Use a PT?
- When partnering with Indonesian shareholders
- When the business sector does not permit foreign ownership
- When the structure is used strategically (with legal safeguards) to meet ownership rules
Benefits of Establishing a PT
- Highly trusted by government and private sectors
- Full access to projects, tenders, and procurement
- Considered stable and legally compliant under Kemenkumham (Ministry of Law & Human Rights)
- Lower capital requirements compared to PT PMA for smaller classifications (UMK/UMKM)
Key Differences Between PT and PT PMA
| Aspect | PT (Local Company) | PT PMA (Foreign-Owned) |
| Ownership | 100% local or mixed (limited) | Up to 100% foreign |
| Capital | Flexible, tiered by business scale | Minimum IDR 10B |
| Activities | Must comply with foreign ownership restrictions | Broader options for foreigners |
| Investor Visa | Not available | Available |
| Perception | Strong for local projects | Preferred for multinational operations |
Also read: Comprehensive Guide to Set up a PT PMA in Indonesia
3. Representative Office (KPPA)
A Representative Office allows foreign companies to establish a presence in Indonesia without engaging in profit-making activities.
This is perfect for companies that want to explore the market before committing to full incorporation.
What RO Can Do
- Conduct market research
- Coordinate with Indonesian partners
- Promote the parent company
- Manage communication, quality control, sourcing
- Lease office space and hire local staff
- Apply for KITAS for foreign executives
What They Cannot Do
- Generate revenue
- Issue invoices
- Sign commercial contracts domestically
- Participate in tenders
Types of Representative Offices in Indonesia
Under BKPM Regulation No. 13/2017, the following RO categories exist:
- KPPA: General Representative Office
- KP3A: Representative Office for Trade Companies
- BUJKA: Representative Office for Construction Services
- KPPA MIGAS: For Oil & Gas entities
Benefits of Opening a RO
- No minimum capital requirement
- Faster setup process than PT PMA
- Allows foreign companies to legally hire staff and operate administratively
- Can open local bank accounts
- Ideal for testing the market before setting up a full company
Using a Virtual Office for Company Registration
A virtual office is a popular and fully legal option for company registration in Jakarta and Bali. It allows companies to:
- Register their PT PMA, PT, or RO
- Obtain a legitimate business address
- Save operational costs
- Maintain professionalism
Lets Move Indonesia provides compliant virtual office solutions accepted by OSS and government regulators.
Company Registration Process in Indonesia (Step-by-Step Guide of Company Incorporation)
Setting up a company in Indonesia involves several structured stages:
1. Choose Your Business Structure
Decide whether a PT PMA, PT, or Representative Office suits your goals. Consider:
- Ownership structure
- Business activities
- Capital investment capacity
- Long-term plans
2. Select Company Name
Names must:
- Consist of 3 unique words
- Not resemble existing Indonesian companies
- Use the Latin alphabet
- Avoid restricted terms (e.g., banking, finance unless licensed)
3. Prepare the Company Deed
A notary drafts the Deed of Establishment, which includes:
- Shareholder details
- Director and commissioner appointments
- Company address
- Capital structure
- Business activities (KBLI)
The deed is then legalized by Kemenkumham.
4. Obtain NIB (Business Identification Number)
Your NIB serves as:
- Company registration number
- Importer registration (if enabled)
- Your basic business license
The OSS RBA system assigns risk-level classifications (low, medium, high) which determine licensing requirements.
5. Secure Operational & Commercial Licenses
Depending on the business, additional permits may include:
- Tourism licenses
- Trading (SIUP)
- Industrial licenses
- Construction permits
- Health & food distribution permits (BPOM)
- Finance/Fintech approvals
6. Tax Registration (NPWP)
All companies must have:
- NPWP (Tax Identification Number)
- NPPKP (VAT Registration) if applicable
Tax reporting is conducted monthly and annually.
7. Apply for Visas or Work Permits
Foreign directors or investors may apply for:
- Investor KITAS (No work permit required)
- Working KITAS (RPTKA + Work Permit)
Register a Company Through Indonesian OSS System
To legally register a foreign investment company in Indonesia, businesses must complete their company registration through the Online Single Submission (OSS) system. Introduced under Indonesian law, OSS serves as the government’s integrated platform for processing company registration, business licenses and permits, tax registration, and other regulatory approvals. During the process, the company’s directors and shareholders must be properly recorded to ensure compliance before commencing operations.
How Do You Classify Business Activities Through KBLI Classification?
Every company must classify its intended business activities using the appropriate KBLI (Indonesian Standard Industrial Classification) code before applying for licences. The selected KBLI determines foreign ownership eligibility, operational requirements, required licenses and permits, and even certain corporate income tax obligations. Choosing the correct classification is essential for businesses planning to operate legally in Indonesia.
Ready to Setup Business in Indonesia Now with Company Registration Services From Lets Move Indonesia?
Whether you are launching a start-up, expanding an international business, or establishing a regional headquarters, Lets Move Indonesia provides end-to-end assistance to help foreign investors register their companies efficiently while remaining fully compliant with Indonesian regulations.
Company Registration and Business Compliance
Our consultants assist with PT PMA incorporation, OSS registration, deed preparation, shareholder documentation, ongoing corporate compliance, and regulatory reporting to ensure your business operates in accordance with Indonesian law.
Work Permits for Foreign Talents
Planning to relocate your management team? We help process immigration services, including Work KITAS, Investor KITAS, stay permits, and other employment-related documentation for foreign directors, executives, and skilled professionals.
Business Licenses and Tax Compliance
Beyond incorporation, we support businesses in obtaining the necessary licenses and permits, completing OSS licensing, registering for taxation, managing corporate income tax obligations, and maintaining ongoing compliance so your business can focus on sustainable growth in Indonesia.
