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BKPM Regulation 5/2025: How Indonesia’s New Licensing Rules Could Impact Your PT / PT PMA Incorporation

BKPM Regulation 52025 How Indonesia’s New Licensing Rules Could Impact Your PT PT PMA Incorporation

Introduction: Why Does BKPM Regulation 5/2025 Matter for PT / PT PMA Founders?

Indonesia has taken a significant regulatory step with the introduction of BKPM Regulation 5/2025, an update that strengthens the Risk-Based Licensing system (OSS-RBA) and tightens the way PT (local company) and PT PMA (foreign-owned company) are incorporated and supervised.

This regulation is part of Indonesia’s broader goal to:

  • attract high-quality investment
  • reduce misuse of PT PMA structures
  • increase transparency in foreign ownership
  • streamline licensing and compliance
  • protect local industries
  • ensure that foreign investment produces real economic activity

For expats, foreign investors, multinational groups, and remote founders, this matters because:

  • PT PMA requirements will be more strictly enforced
  • KBLI (business activity codes) selection becomes more important
  • OSS submissions must now be more accurate
  • Investment declarations will undergo more verification
  • More sectors face updated risk classifications
  • Operational licenses may require additional documentation
  • Non-compliance could delay RPTKA, IMTA, and KITAS approvals

Paul Hype Page Indonesia has helped foreign investors navigate these updates across Indonesia, Malaysia, Singapore, Hong Kong, and the region. This guide outlines how the new regulations affect your 2025–2026 PT/ PT PMA incorporation strategy — and what you need to do to remain compliant.

What Is BKPM Regulation 5/2025 and Why Was It Introduced?

1. What is BKPM Regulation 5/2025?

BKPM Regulation 5/2025 is the latest update from Indonesia’s Investment Coordinating Board (BKPM) governing:

  • business licensing
  • investment approvals
  • risk-based classifications
  • compliance reporting
  • monitoring of PT PMAs
  • NIB (Business Identification Number) requirements
  • operational/commercial licensing

It updates and refines previous OSS-RBA guidelines.

2. Why did Indonesia update the rules?

Because Indonesia wants to:

  • enhance supervision over foreign-owned entities
  • ensure PT PMAs meet investment thresholds
  • align with Indonesia’s 2025–2030 investment road map
  • support priority industries
  • reduce fraudulent company structuring
  • strengthen data consistency and UBO transparency

3. Who is affected by Regulation 5/2025?

This regulation impacts:

  • PT PMAs (foreign-owned companies)
  • PTs that must comply with new risk classifications
  • Joint ventures
  • Sector-specific companies with operational permits
  • Expats applying for KITAS based on investment
  • Trading, consulting, e-commerce, and digital businesses

If you’re planning to set up a company in Indonesia, BKPM 5/2025 applies to you.

How Does BKPM Regulation 5/2025 Change the PT PMA Incorporation Process?

1. Are investment requirements now more strictly enforced?

Yes.

Indonesia’s longstanding minimum investment rule for PT PMA:

  • IDR 10 billion total investment (≈ USD 700,000) remains in place. But under Regulation 5/2025, enforcement becomes stricter:
  • OJK-style transaction reviews may be applied
  • BKPM may request proof of planned investment timeline
  • Incomplete or unrealistic investment plans may be rejected
  • Trading PT PMAs may face even closer scrutiny

Foreign-owned companies will no longer be able to rely on vague declarations.

2. Does BKPM now require more thorough documentation?

Yes — the new regulation increases documentation accuracy requirements for:

  • shareholder passports
  • UBO (ultimate beneficial owner) records
  • corporate structure diagrams
  • KBLI classification
  • office address documentation
  • capital structure declaration
  • supporting documents for high-risk sectors

Incorrect documentation is now more likely to cause delays or rejections.

3. How does Regulation 5/2025 affect KBLI (business activity) selection?

Under previous OSS systems, many companies chose KBLI codes:

  • that were too broad
  • that did not reflect real operations
  • that bypassed foreign ownership restrictions

BKPM 5/2025 tightens this by:

  • narrowing permissible KBLI combinations
  • increasing sector screening
  • requiring justification for foreign involvement
  • reducing multi-activity allowances

Choosing the wrong KBLI can now:

  • block your PT PMA incorporation
  • prevent operational licensing
  • affect your long-term KITAS eligibility

4. Are PT PMAs now subject to more frequent inspections and audits?

Yes — especially in sectors where foreign misuse was previously common:

  • trading without a warehouse
  • consulting with no real operations
  • dormant PT PMAs misusing investor KITAS
  • import/export without proper facilities

BKPM will now:

  • request follow-up documentation
  • verify online presence
  • check office space obligations
  • validate operational readiness
  • monitor investment utilisation

How Does BKPM Regulation 5/2025 Change Operational Licensing?

1. Are risk classifications updated?

Yes — risk-based licensing remains:

  • Low-risk business → NIB only
  • Medium-risk business → NIB + Standard Certificate
  • High-risk business → NIB + Standard Certificate + Operational License

But BKPM 5/2025 modifies which industries fall under which category.

For example:

  • Certain trading businesses may move from medium → high risk
  • Education, logistics, and digital platforms may face new conditions
  • Manufacturing activities may need environmental checks

2. Will operational licenses take longer to obtain?

Potentially yes — because more sectors now require:

  • location approval
  • environmental documents
  • professional certifications
  • sectoral supervision

Companies must prepare more complete files upfront to avoid delays.

3. Does this affect expatriate hiring (RPTKA, IMTA, KITAS)?

Absolutely.

The Ministry of Manpower (MOM) now checks:

  • whether your company is fully licensed
  • whether your KBLI is appropriate for hiring expats
  • whether your investment plan is realistic
  • whether your business operations exist

A company with improper licensing may face immediate RPTKA rejection.

What Does BKPM Regulation 5/2025 Mean for Expats Starting a Business in Indonesia?

1. Will it become harder for expats to open PT PMAs?

Not harder — but stricter and more transparent.

If you provide:

  • correct documentation
  • clear investment justification
  • compliant KBLI
  • proper office space
  • post-incorporation compliance

…you will have fewer issues.

But expats who rely on shortcuts or old incorporation habits will face challenges.

2. Does Regulation 5/2025 impact investor KITAS or work KITAS?

Yes — because licensing accuracy directly affects immigration.

  • Investor KITAS may require proof of capital deployment
  • Work KITAS may require validated operations
  • MOM checks BKPM compliance before approval
  • Businesses must show real commercial activities

3. Will Indonesia become more favorable or more restrictive for foreign founders?

More favorable for serious founders. More restrictive for non-compliant or nominee-reliant structures. Indonesia wants quality investment, not passive incorporations.

How Should You Structure Your PT / PT PMA Under the New Rules?

1. Choose KBLI codes strategically

Your KBLI must:

  • match actual business activity
  • align with foreign ownership allowances
  • meet capital/law requirements
  • avoid restricted sectors
  • support future RPTKA/KITAS applications

2. Create a realistic and defensible investment plan

BKPM wants more details about:

  • how much will be invested
  • in what form (equipment, capital, goods)
  • investment timeline
  • staffing plan
  • operational milestones

3. Strengthen OSS compliance and reporting

This includes:

  • submitting LKPM (investment reports) on time
  • maintaining tax compliance
  • paying employee BPJS when applicable
  • documenting operational readiness

4. Avoid nominee arrangements entirely

Nominee structures now carry:

  • legal risk
  • potential BKPM rejection
  • KITAS denial
  • tax penalties

Use legitimate structuring with PHP Indonesia.

How Can Paul Hype Page Indonesia Help You Navigate BKPM 5/2025?

Foreign investors trust PHP Indonesia because we provide:

  • ✔ PT / PT PMA Incorporation
  • ✔ KBLI Advisory & Full Licensing Compliance
  • ✔ NIB, OSS-RBA Setup & Operational Licensing
  • ✔ Investor KITAS & Work KITAS (RPTKA + IMTA)
  • ✔ Monthly Accounting, Tax & Payroll Compliance
  • ✔ Corporate Secretarial & UBO Structuring
  • ✔ Regional Support Across SG, MY, ID, HK, AU, CN, JP

PHP ensures full alignment with BKPM Regulation 5/2025 so your incorporation and KITAS pathway proceed without delays.

Planning to set up a PT or PT PMA under Indonesia’s new 2025 licensing rules?

Start your incorporation with Paul Hype Page Indonesia — the trusted partner for foreign investors expanding into Indonesia.

Questions? We Have Answers

How can Paul Hype Page Indonesia help companies comply with BKPM 5/2025?2025-12-04T09:53:05+08:00

PHP Indonesia assists with full PT/PT PMA incorporation, KBLI advisory, OSS-RBA licensing, investment reporting, KITAS applications, and ongoing tax and compliance — ensuring your structure fully aligns with BKPM’s 2025 requirements.

Does Regulation 5/2025 impact expatriate hiring and Investor/Work KITAS?2025-12-04T09:53:05+08:00

Yes — the government now cross-checks licensing compliance before approving RPTKA, IMTA, or Investor KITAS. If your PT PMA is not properly licensed or compliant, your expatriate hiring requests may be denied.

Will licensing and OSS submissions become more complex under the new rules?2025-12-04T09:53:05+08:00

For many sectors, yes. Risk classifications have been updated, and more industries now require additional Standard Certificates or Operational Licenses, making accurate OSS-RBA submissions more important than ever.

Does BKPM 5/2025 affect minimum investment requirements for PT PMA?2025-12-04T09:53:05+08:00

The IDR 10 billion minimum investment rule remains, but BKPM will now enforce it more strictly. Foreign investors may need to demonstrate clearer proof of capital allocation, timelines, and intended business activities.

How does BKPM Regulation 5/2025 change PT PMA incorporation for foreigners?2025-12-04T09:53:05+08:00

The regulation tightens verification of investment plans, KBLI code selection, and UBO documentation. PT PMA applications must now be more accurate, properly structured, and supported by clear capital and operational plans to avoid delays or rejection.

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To incorporate a company in Indonesia, you must appoint at least one director and one commissioner. The director manages daily operations and makes critical business decisions, while the commissioner provides oversight, ensuring the company complies with Indonesian laws. Both roles are mandatory for legal incorporation, and they work together to ensure the smooth functioning of the business.

The director must be qualified and, in some cases, meet residency requirements, especially for foreign-owned companies. The commissioner, though not involved in daily management, is responsible for guiding the company towards compliance and proper governance.

Opening a corporate bank account is essential when incorporating a company in Indonesia. After incorporation, you must deposit your paid-up capital into this account. Once your company is officially registered, you can start operating as a legal entity. However, there are additional steps to complete:

Within 30 days, you must submit the labor report and other required documents to the Ministry of Labor. Additionally, you must enroll your employees in Indonesia’s social security programs, which cover workplace accidents, retirement, pension, and death benefits. It’s also mandatory to secure healthcare and employee welfare insurance through the Badan Penyelenggara Jaminan Sosial (BPJS).

Essential Work Visas for Foreigners Relocating to Indonesia

Work KITAS (Limited Stay Work Permit)
The Work KITAS allows foreign employees to legally live and work in Indonesia. It is sponsored by the employing company and valid for the length of the employment contract.

Single-Entry Business Visa
Ideal for short-term business visits, this visa is valid for 60 days and can be extended, allowing up to 180 days in total. It’s perfect for attending meetings, conferences, or business events.

Multiple-Entry Business Visa
Designed for frequent business travelers, this visa allows multiple entries within a one-year period, offering flexibility to manage ongoing business operations in Indonesia.

Employment Pass Requirements
The requirements for an Employment Pass in Indonesia may vary depending on the specific job and industry. However, the common requirements include having a valid passport, an employment contract with a sponsoring company, relevant educational qualifications, and work experience. Additionally, the company must provide a sponsorship letter, and a medical check-up is often required to confirm the applicant’s health status before the work visa is granted.

The requirements for registering a company in Indonesia are simple and straightforward. They are:

Appoint a Director

Every company in Indonesia requires at least one director to handle day-to-day operations and make crucial business decisions. The director must meet all legal qualifications.

Minimum of Two Shareholders

To register a company, you need at least two shareholders. Shareholders can be individuals or legal entities, and they hold ownership stakes in the company. For foreign-owned companies (PT PMA), additional requirements for shareholder nationality or residency may apply.

Commissioner Role

A commissioner ensures compliance with Indonesian laws and provides oversight to the company’s operations. The commissioner supervises the director and provides strategic guidance to shareholders.

Investment Value for PT PMA Companies

Foreign-owned companies (PT PMA) must meet a minimum investment requirement based on the business type and company size. This is crucial for proceeding with registration and ensuring compliance with local regulations.

Registered Office Address

A legal business address is required for official communications. This can be a physical office or a virtual address, depending on your company’s needs and local policies.

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Menara Palma #05-02B, Jln HR Rasuna Said Blok X2 No.KAV 6, Kuningan, Jakarta Selatan 12950, Indonesia

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