Those who fail to pay fees when setting up a PT. PMA will face legal consequences. The information here will help prevent those interested from experiencing such undesirable circumstances.

Business in Indonesia

Indonesia is one of Asia’s economic success stories, with the reforms of the reformasi period having laid strong foundations for protracted growth. This attracts many foreign entrepreneurs’ interest on investing in the country. That being said, the ultimate question that arose to many foreign investors is what are the actual fees to set up a PT PMA in Indonesia?

What is a PT PMA?

Before that, we should first understand that what is PT PMA in Indonesia? Unlike Local Company (Local PT) where the company shareholdings must consist of 100% local citizens only, here in PMA company foreigners can hold up to 100% ownership of the company in Indonesia. A PT PMA is also known as a Limited Liability Company or Perseroan Terbatas Penanaman Modal Asing in Bahasa Indonesia. It is a Foreign Owned Company where foreign investors can be registered as shareholders in the form of legal entities and individuals.

What is required to form a PT PMA in Indonesia?

Directors

The directors can be all foreigners, but they are required to have residence permits (KITAS) or personal domicile letters along with work permits. However, if there is a local shareholder in the PT PMA, it is advisable by the BKPM (Indonesia Investment Coordinating Board) that the company should also have at least one local partner or a local director.

The director(s) are elected by the shareholders in the general meeting of the shareholders. They are in charge of company management in accordance to any policy that is appropriate by the Indonesian Company Law or AoA (Article of Association). Apart from having the right to legally represent the company, the directors are authorized to sign any contracts between the company and third parties such as vendors, suppliers and clients as well as the taxation documents.

Commissioner

The commissioner can be either a local citizen or a foreigner. The main duty of a commissioner is to supervise and monitor the work of the directors in the company and to ensure that every activities commenced by the company are in order and coherence with the objective of the company.

Shareholders

Every PMA companies should have at least 2 shareholders be it individual or a legal entity, but at least one of the shareholders must be a foreign individual. All corporate shareholders must have Articles of Association, which is approved by a public notary.

The percentages of maximum foreign shareholdings are subject to the Negative Investment List.

Paid-up Capital

The minimum investment in Indonesia to start a PMA is IDR 10 billion or equivalent to current exchange rate. This applies to all business sectors and the amount of minimum investment is not including the value of the land and buildings owned by the company.

Minimum paid- up capital requirement is IDR 2.5 billion (~USD 175,000.00)

Negative Investment List

The Negative Investment List also known as the Daftar Negatif Investasi is compiled by the Indonesia Investment Coordinating Board, BKPM to stipulates which sectors are open to foreign investment in Indonesia as well as the percentage of foreign ownership permitted. Indonesia Negative Investment List is made to protect Indonesian economy, as well as to provide more business chances to investors.

However, do note that this is compulsory for all foreign investors who intend to invest in Indonesia.