In order to establish PMA Companies in Indonesia, investors are required to deposit paid-up capital pursuant to the prevailing laws and regulations. Learn more regarding the minimum amount of paid-up capital required to set up PMA Companies, and how to deposit them.
To directly invest in Indonesia in the form of PMA Company, foreign investors must comply with the prevailing foreign investment regulations and requirements, including the requirements regulated by Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”).
Generally, the minimum paid-up capital of a PMA Company is regulated pursuant to the Head of BKPM Regulation Number 14 of 2015 (“BKPM Regulation No. 14/2015”), which regulates generally for the minimum amount of paid-up capital in a PMA Company IDR 2,500,000,000 (two billion and five hundred million rupiah) or its equal in USD.
Due to its nature of business, a PMA Company is required to deposit a higher amount of minimum capital. Some of the more significant examples include PMA Company in the following business sectors:
- Electronic Trade Transaction Providers, requiring minimum paid-up capital of IDR100,000,000,000 (one hundred billion Rupiah) for 100% foreign investment;
- Venture Capital, requiring minimum paid-up capital of IDR50,000,000,000 (fifty billion Rupiah);
- Financing Services, requiring minimum paid-up capital of IDR100,000,000,000 (one hundred billion Rupiah).
Therefore, you are suggested to verify the Presidential Regulation of Republic of Indonesia Number 44 of 2016 (“Negative Investment List”) to determining the composition of shareholders and the capital requirement.
CONNECTION BETWEEN PAID-UP CAPITAL AND INVESTMENT AMOUNT
Pursuant to Law No. 20 of 2008, PMA Company is required have equity above IDR 10,000,000,000 (ten billion Rupiah) or more (subject to business activities) when they want to obtain the Permanent Business Licenses (Izin Usaha Tetap/IUT).
To prove that such equity exists, the PMA Company can deposit it all as paid-up capital, or submit a financial balance sheet to BKPM detailing the total equity, which can be sourced from paid-up capital and other forms of capital.
For example, a PMA Company invested IDR11,000,000,000 (eleven billion Rupiah). The minimum paid-up capital of PMA Company is IDR2,500,000,000 (two billion and five hundred million rupiah) which are deposited after the company is established and has a bank account. Therefore, the rest of investment, IDR8,500,000,000 (eight billion and five hundred million rupiah) is sourced from the capital in the form of assets (tangible or intangible).
HOW CAN SMART CONSULTING HELP YOU?
To ensure a smooth investment and business operation from the legal perspective, but also still focus on establishing your business in Indonesia and reach your revenue target, it is advised for you to find capable and trusted lawyers or legal consultants for advice and assistance in ensuring your legal compliance with investment regulation.
SMART Consulting is an Indonesian Corporate Legal Services firm. SMART has worked and assisted with foreign investors in establishing PMA Companies in Indonesia with 100% success rate, including assisting them in preparing for BKPM Presentations, and we also assist in providing advisory services for the investors in regards to their business sectors from a legal perspective.
Contact Us Now to get your legal solution for your business goals, and still comply with the prevailing laws and regulations.