When you decide to set up a business in Indonesia, the first step is to understand the types of business entities available. PT PMA Company is one of the most popular choices for businesses and foreign investors.
PT stands for Perserona Terbatas (PT) which is a type of business entity that refers to any private company in Indonesia that could either be a local or foreign limited liability company (LLC)
PMA stands for Penanaman Modal Asing (PMA), a popular option for any foreign companies wishing to venture into Indonesia.
Why is PT PMA Company a Popular Choice?
The key benefit of starting an Indonesian -PT PMA company is that it is the ideal legal method for foreign-owned businesses to operate and generate revenue in Indonesia.
The cons of starting a PT PMA company are that, due to its international position in the market, the start-up capital value will be high, and it is not available for all business fields. The total start-up capital is 700,000 USD, and the estimated waiting time for incorporation is 10 weeks, although this incorporation period differs on a case-by-case basis.
While it is stated that the minimum investment is IDR 10 billion, this amount is the total investment value that the company has to put forth during the first 5 years of operations. This means that you do not need to invest the full IDR 10 billion at the start of incorporation.
The downside of incorporating a PT PMA company in Indonesia is that not all sectors can be owned by foreign investors. You can find out more about the Positive Investment list here.
What is Needed Upon Establishment of PT PMA Company?
Generally, these are the few documents that are needed for the incorporation of a PT PMA company in Indonesia:
Company Documents
- Power of Attorney for submission document signed by each shareholder
- Shareholder documents
- Rental agreement between the company & building management
- Original building domicile/statement from the building management
- Building & land tax receipt (PBB) including the payment approval of the current year
- IMB or certificate of ownership if the building is owned
- Statement for lease (if any)
- Min. 3 office photos – reception, signage of company & office room with business activity
- Statement of domicile issued by the company & acknowledged by the building management
- Company letterhead & copy or sample design of the company stamp
Shareholder Documents
- Copy of Article of Association and its amendment – in English 0r Bahasa Indonesia
- Business registration certificate
- Board of Directors structure
Personal Documents – Directors & Commissioners
- Foreigner: Copy of coloured passport with a min. 18 months validity and 4 blank pages
- Local: ID card (KTP & Taxpayer Identity Number)
- Family card (KK)
- Indonesia visa stamp
- Residence of hotel or apartment domicile letter for the director
- Recent passport-sized photo with red background for each Board of Director
For shareholder documents, depending on whether it is a foreign, local or a personal foreigner, the requirements differ.
| Business Entities | Shareholder Documents |
|---|---|
| Foreign Legal Body |
|
| Local Legal Body |
|
| Personal Foreigner |
|
Steps for Establishment of PT PMA
The procedure for incorporating a PT PMA Company in Indonesia is fairly straightforward, although there are many institutions that you will need to get documents.
Here is a summarised version of the procedure:
| Procedure | Institution |
|---|---|
| Approval of company name (should consist of 3 words) |
|
| Review, Revision, and Approval of Principle License as their temporary license |
|
| Article of Association (AKTA) |
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| Legalized of Legal Entity (Deed of Establishment/ SK Kehakiman) |
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| Certificate of Domicile |
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| Taxpayer Registration Number (NPWP) and letter of registered tax (SKT) |
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| Company Registration Certificate (TDP) |
|
What’s After Incorporation of PT PMA Company in Indonesia?
After registering your company with the authorities, the next step for foreign investors is to apply for your work visa and in parallel, apply for any business licenses if needed. It is also recommended that every company in Indonesia opens a corporate bank account to manage its finances.
FAQs
This section discusses the incorporation of a foreign investment limited liability company in Indonesia, known as Perseroan Terbatas Penanaman Modal Asing (abbreviated PT PMA). It is the legal entity through which a foreign investor can conduct commercial activities in Indonesia.
The registration is done via the Online Single Submission (OSS) system.
PMA Indonesia (Penanaman Modal Asing) or PT PMA (Perseroan Terbatas Penanaman Modal Asing) is also known as a Foreign Owned Company. This is a form of legal entity created under the Indonesian Law in which foreign investors can choose to conduct business in Indonesia to generate revenues or profit.
Perseroan Terbatas, PT is the abbreviation of Perseroan Terbatas, a limited liability company whose capital is divided into shares and the responsibility of shareholders based on the number of shares that he or she has. Fortunately, since the beginning of 2016, the procedure of establishing a PT company has been continuously simplified.
