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What is a PMA Company in Indonesia?

What is a PMA Company in ID

A PMA (Penanaman Modal Asing) or PT PMA (Perseroan Terbatas Penanaman Modal Asing) is known as a Foreign Owned Company in Indonesia. This is a type of legal entity in which foreigners can choose to conduct commercial activities in Indonesia established under the Indonesia Law. 

In PT PMA, foreign investors can be registered as shareholders in the form of legal entities and individuals. 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. However, foreign investors are obliged to the Negative Investment List in Indonesia for certain business classifications where it lists down the maximum percentage a foreigner can hold ownership. The Negative Investment List is regularly updated by the Indonesia Investment Coordinating Board (BKPM). 

 

Characteristics of PMA Company 

Directors, Commissioners and Shareholders 

By reference to the Indonesian Company Law, every PMA must consist of at least: 

  • 1 director; 
  • 1 commissioner; and  
  • 2 shareholders (they can be either an individual or a legal entity, but at least one of the shareholders must be a foreign individual) 

 

Directors 

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. 

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. 

 

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 amount of 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 capital requirement is 25% from IDR 10 billion.

 

The 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. 

Foreign investors who wish to incorporate a PMA company in Indonesia must take into account of the Negative Investment List on things such as: 

 

Shares 

  • Shares of PMA can be owned up to 100% by the foreign investors, but according to the Negative Investment List, ownership of the PMA shares is classified based on the business field and it is varies from 0% to 100%. 

 

Registered office address 

  • The registered office address must be in situated in a business or commercial area. In accordance to the Indonesian regulation, apartment or residential area can’t be used as an office address. The areas of business where a person can start a PT PMA is subject to the Negative Investment List 

 

Licenses 

  • Specific license might be necessary for each specific sector. Some business activities require specific business licenses before the company run its business while others may start their business immediately after incorporation.

 

 

Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.

Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia

Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.

 

How we can help you:

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Step 1- Listen to your Business plan and Relocation needs.

Step 2- Analysis your Tax Planning

Step 3- Recommend the most suited type of Company Incorporation, Open Bank account and Work Visa

Step 4- Arrange for your Spouse and Children Visa

Step 5- Assist as your company to hire staffs and handle all HR matters

Step 6- Every financial year end, we assist you with your yearly OSS Finanical and Tax Compliance

Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.

Get in Touch with Us Today.

 

Paul Hype Page

Website: https://www.paulhypepage.co.id

Posted on February 27, 2019 at 12:07 pm
Categories: Foreign Owned Company (PMA)

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