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PT PMA Registration - Who is it for and what are the benefits
PT PMA registration refers to the process of establishing a foreign-owned limited liability company (PT PMA) in Indonesia. PT PMA company in Indonesia stands for Perseroan Terbatas Penanaman Modal Asing ( PMDA ), which translates to “Limited Liability Company with Foreign Direct Investment.”
PT PMA registration is specifically designed for foreign investors who intend to establish a company or expand their business operations in Indonesia. It provides a legal framework for foreign investors to participate in various sectors of the Indonesian economy, subject to certain restrictions and regulations.
Foreign investors can engage in PT PMA registration to set up new companies or acquire existing local companies. The registration process allows them to operate in various sectors such as manufacturing, services, trading, construction, agriculture, and many others, depending on the prevailing investment regulations and restrictions.
It’s important to note that PT PMA registration is subject to specific eligibility criteria, including minimum capital requirements, sector-specific regulations, and compliance with foreign ownership restrictions. The process involves various steps, such as obtaining licenses, and permits, and fulfilling administrative requirements, all of which are overseen by the Investment Coordinating Board (BKPM) in Indonesia.
At Lets Move Indonesia, we have experts to help you set up a PT PMA registration and navigate the process, ensuring compliance, and maximizing your investment opportunities in Indonesia.
Lets Move Indonesia’s expert teams are located across Jakarta & Bali, ready to assist you completely with a hassle-free company registration process!
Steps to Register A Company in Indonesia
- Register the company name to the Notary. The name must contain 3 words
- The Notary will make a draft Deed of Establishment
- Decree Approval will be issued by the Ministry of Law & Human Rights
- Obtain the Business License and Business Identification Number (NIB) through the Online Single Submission System
- Obtain the Commercial License (if applicable)
Benefits of Setting Up a PT PMA in Indonesia
One of the primary advantages of PT PMA is that it allows for foreign ownership in various sectors. While local PT companies are typically restricted to Indonesian ownership, PT PMAs enable foreign investors to have a majority or 100% ownership, depending on the sector and prevailing regulations. This provides greater control and flexibility for foreign investors in managing their businesses.
Foreign Ownership:
One of the primary advantages of PT PMA is that it allows for foreign ownership in various sectors. While local PT companies are typically restricted to Indonesian ownership, PT PMAs enable foreign investors to have a majority or 100% ownership, depending on the sector and prevailing regulations. This provides greater control and flexibility for foreign investors in managing their businesses.
Market Access:
PT PMA has access to a broader range of business sectors compared to local PT companies. Certain sectors, such as telecommunications, transportation, healthcare, and e-commerce, may have restrictions on local PT companies but are open to foreign investment through PT PMAs. This expands the market opportunities for foreign investors in Indonesia.
Legal Protection:
As a registered foreign-owned entity, PT PMAs benefit from legal protection under Indonesian law. This protection includes property rights, intellectual property rights, contractual agreements, and access to dispute resolution mechanisms. PT PMAs provide a recognized legal framework that safeguards the interests and rights of foreign investors operating in Indonesia.
International Image and Reputation:
As a registered foreign-owned entity, PT PMAs benefit from legal protection under Indonesian law. This protection includes property rights, intellectual property rights, contractual agreements, and access to dispute resolution mechanisms. PT PMAs provide a recognized legal framework that safeguards the interests and rights of foreign investors operating in Indonesia.
Minimum Requirements to Register a Foreign Business in Indonesia
To register a PT PMA Company(Foreign Investment Limited Liability Company) in Indonesia, a business should have:
- At least two shareholders, one should be a foreigner and one local.
- Identity and contact details of Company Shareholders, with requirements as follows:
- Indonesian Individuals would require KTP (ID Card) and taxpayer identification number (NPWP)
- Foreign individuals will require a valid passport
- In addition, Indonesian Companies will require a copy of the Article of Establishment, the Approval letter from the Ministry of Law and Human Rights, a Domicile Letter, a Tax ID, and other supporting licences. To understand more about the documents you need to register your PT PMA, kindly contact us here for a free consultation.
- Foreign Companies should also provide a copy of the Article of Association in English or its translation in Bahasa Indonesia from a certified translator.
- Identity and Contact details of Company Directors and Commissioners:
- Indonesian Directors and Commissioners must provide KTP, NPWP, email and phone number
- Foreign individuals should provide a valid passport, email and phone number.
- Copy of Lease Agreement between company and building management.
Specific Requirements for Paid-Up Capital required for the establishment of a PT PMA
The following specific provisions apply to Foreign Direct Investment Companies (PT PMA) if they are keen to invest in Indonesia:
- Applicable to large-scale enterprises: Not applicable to micro, small, and medium enterprises.
- Open to foreign ownership: Only applies to business activities that permit foreign ownership.
- Minimum capital ownership: PT PMA entities are classified as large-scale enterprises and must adhere to a minimum investment value of at least IDR 10 billion (unless otherwise stipulated by law) (Article 12 paragraphs (1) and (2) of BKPM Regulation 4/2021).
- Minimum paid-up foreign capital: PT PMA requires a minimum paid-up capital of at least IDR 10 billion (unless otherwise stipulated by law) (Article 12 paragraph (7) of BKPM Regulation 4/2021).
Common Questions
What is the initial capital investment must be complied by shareholders of the PT PMA?
The shareholders of a PT PMA (Foreign-owned Limited Liability Company) are required to meet certain initial capital investment requirements in order to establish and conduct business in Indonesia.
Specifically, the shareholders must comply with a capital of IDR 10 billion (approximately USD 660,000). This investment plan outlines how the company intends to use its capital and resources in its operations.
Does Indonesia have a Negative Investment List?
Yes, Indonesia does have a Negative Investment List (DNI). This list outlines the business sectors that are either closed to foreign investment completely, partially closed with certain conditions, or fully open. The Indonesian government regularly reviews and updates this list to attract foreign investment while protecting certain industries. You can find the latest version of the DNI online or consult with a legal professional for details.
Does a foreign business have to register a PT PMA to own a Representative Office?
No, a foreign business doesn’t need to register a PT PMA (Foreign LLC) to own a Representative Office (RO). An RO is a simpler structure primarily for market research and promoting the parent company’s products/services. It cannot engage in commercial activities that generate revenue.
Can the ownership in the Foreign investment company be represented?
The question of ownership representation in a foreign investment company is complex and depends on the specific regulations in Indonesia. While nominee arrangements are flexible in some cases, certain restrictions exist, especially for industries on the Negative Investment List. It’s essential to consult with legal and business professionals familiar with Indonesian law to navigate this issue properly.
Be at Ease and Establish a PT PMA in Indonesia with Lets Move Indonesia
To make your life simpler, Lets Move Indonesia offers fully serviced packages to get your business off the ground. The Magnate Package includes PMA Establishment, a virtual office and an Investor KITAS! To find out more details about the Magnate Package, click here!
Want to know more about starting Business Activities in Indonesia? Check out our useful insights to secure your business opportunities!
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