As a populous country, Indonesia offers an opportunity for many kinds of business sectors such as product and service. The industries are from mining to tourism. Therefore, setting up a PMA company in Indonesia may bring a big chance to gain great profit.
PT PMA allows the foreign entrepreneurs to conduct several activities such as:
(1) Starting a business in Indonesia as a legal entity with the same right and responsibilities as other local company or PT
(2) Joining and participating in all tender in Indonesia, and
(3) Applying for a business license so they can conduct direct business like import, construction, manufacture and industry, and other services.
What is PT?
PT or Perseroan Terbatas is a business corporation that has a legal entity owned by at least two people. In the PT, the shareholders do not have to lead the company because they can appoint another people. To establishing a PT, minimum capital and other terms and conditions are required.
For foreigners, PT or a limited liability company (LLC) is organized by foreign nationals and capitalized with external funds. To start an operation, the LLC must complete series of registration and incorporation process.
The Steps in Setting Up a PMA Company in Indonesia
The steps required for foreign direct investment as an LLC (PT PMA) are:
- Paying the bank for the clearance of the company name
- Notarizing the company deed and documents
- Applying for a deed approval at the Ministry of Law and Human Rights
- Obtaining the Building Management Domicile Certificate
- Applying for the Certificate of Company Domicile,
- Paying the non-tax state revenue fee
- Applying for permanent business trading license
- Obtaining company registration certificate
- Registering at the Ministry of Manpower by submitting a manpower report
- Applying for the social security, tax-payer registration number, VAT collection, and health care insurance.
PT PMA Organizational Structure
PT PMA must consist of minimum two shareholders, which can be individuals or companies, foreigners or Indonesians. To conduct corporation legal activities, there must be at least 1 director in PT PMA and 1 Commissioner whose task is supervising the company activities.
Shares Ownership Percentage
Shares in PT PMA can be owned up to 100% by foreign investors. The ownership percentage of PT PMA varies to the company business sector, and the range is from 0% to 100%. The portion is accordant to the Daftar Negative Investment (DNI) or Negative Investment List maintained by Indonesia Investment Coordinating Board (BKPM). In 2016, President Joko Widodo signed the renewal regulation of the DNI.
PT PMA Investment Plans
For the Investment Plan, investors must submit it to the BKPM before they incorporate a PT PMA in Indonesia. The Investment Plan is the PT PMA business plan after the investors get the approval to establish a company in Indonesia.
After the Investment Plan is realized, PT PMA is allowed to apply for Permanent Business License (Izin Usaha Tetap or IUP) after the particular period (1-5 years, depending on the business sector). BKPM sets the Investment Plan to be above IDR 10,000,000,000, which equates to approximately USD 1,000,000, depending on the exchange rates.
The Capital and License Requirements
The Minimum Capital Requirement for a PT PMA is IDR 10,000,000,000, which 25% is deposited as the paid-up capital. The License Requirement is specific to each industry sector. Some activities may require a certain license or technical recommendation.
In US dollar, the amount of cost involved may change because of the rates. Therefore, it is suggested to find out detailed information before moving to the next stages in setting up a PMA company in Indonesia.
HOW CAN SMART LEGAL CONSULTING HELP YOU?
SMART Legal Consulting is an Indonesian Corporate Legal Services firm. We assist investors in establishing their business in Indonesia through various forms of investment, including setting up Perseroan Terbatas (PT), both local PT and PT PMA. Our knowledge, experience, and connections makes us the law firm to be your legal partner in Jakarta, managing your investments in Indonesia.
If you have any questions about PT PMA or require further consultation and assistance, you can arrange a meeting with SMART Legal Consulting at: