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PT PMA - All About The Foreign-Owned Companies in Indonesia

The document discusses regulations for foreign-owned companies (PT PMA) in Indonesia, including that a company is considered foreign-owned if foreigners own 1% or more of shares, there are limitations on maximum allowed foreign ownership percentages depending on the business, and setting up a PT PMA involves determining company details, registering for tax and with the OSS-RBA online system, and obtaining licenses.

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59 views3 pages

PT PMA - All About The Foreign-Owned Companies in Indonesia

The document discusses regulations for foreign-owned companies (PT PMA) in Indonesia, including that a company is considered foreign-owned if foreigners own 1% or more of shares, there are limitations on maximum allowed foreign ownership percentages depending on the business, and setting up a PT PMA involves determining company details, registering for tax and with the OSS-RBA online system, and obtaining licenses.

Uploaded by

rebond24jam
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PT PMA - All About the Foreign-Owned Companies

in Indonesia
For the past decade, Indonesia has become one of the most popular investment destinations.
In terms of foreign-owned businesses, Bali is especially under the spotlight of potential
shareholders.

PT PMA is the company regulating foreign investors activities. It is suitable for projects of any
size and investors do not face any limits in their inceptions. However before having discussed
peculiarities of the PT PMA license setting up, it is important to take a closer look at the Indonesia-
based ownership regulations.

Limitations for PT PMA


A company will be called as foreign owned company or PT PMA if one or all shareholders
are foreigners even if only 1% of shares owned by foreigners and 99% of other shares belong
to local investors, the company still be called PT. PMA.

All foreign investors should consider the main limitations that foreign ownership is
determined. For example, Indonesian legislation regulates the maximum allowed foreign
ownership.

According to the type of the project (business classification), the percentage of closed and open
investments together with asset allocation vary:
• Large number of businesses are allowed 100% of investments both for national and
foreign investors;
• Some businesses are allowed to have cooperation between foreign investors
and Indonesia’s micro small and medium enterprises.
• Some businesses are limited to foreign investments with specified
percentage (for example only 49% foreign investment is allowed in war
vehicle industry)
• Some businesses are only allowed for micro small and medium enterprises
in Indonesia.
• 10 businesses are closed for any investment.

Check the list of opened and restricted business fields in Investment Business Field
(BUPM/Bidang Usaha Penanaman Modal) before to start some investment plan. If there is no
limitation to the business classification you have chosen, any kind of shareholding is possible.

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How to Set Up a PT PMA - Detailed Guide for
Entrepreneurs
First of all, it is necessary to meet all existing requirements. The range of demands to foreign
investors and entrepreneurs is not too large. Here is a list of the major claims Indonesian
legislation base obtains:

1. Paid-up share capital. There is a minimum sum of the paid-up capital. It is 10 billion
rupiah. The sum can vary according to the Rupiah and Dollar exchange rate. The
foreign-owned project should obtain 10 billion of Rupiah or more.
3. Number of shareholders. Minimum two or more shareholders are required. There
are no other limitations to investors and other representatives of the overseas
company.
4. Company structure. It is important to determine who will be as a Director and
Commissioner.
5. Company legal address. You need to decide the legal address of the company but
if you do not have it, you can rent a virtual office as your company legal address.

As can be seen, the list of requirements is not very large. All the local demands and other
regional rules are well-understandable and necessary for fast registration of the foreign-owned
project.

The setting-up procedure can be passed even in a remote mode. You can start and succeed
with the establishment process online with the help of the special OSS-RBA program (Online
Single Submission-Risk Based Approach). Approximate time of waiting for establishment of the
company is around one week.

Algorithm of PT PMA Setting-Up


Our company can become your reliable assistant in the matter of the foreign-owned company
establishment. We are ready to describe you the algorithm of the whole procedure and help with
each of the establishment stages. There are five main steps to complete:

• Determining company name. You provide us some potential names for your company
and we will check the possibility of using the name.
• Determining business classification. In order to pass the first stage, we recommend
paying attention to the business classification. This is the main aspect at the starting of
the project. Our experts will help you to choose the right class and check the risk
category whether your business is low, middle or high risk.

Page 2 of 3
• Preparing location. If you want to create an Indonesia-based overseas company,
you have to make sure to have location address.
• Tax registration. We help you to register NPWP number (tax indentification
number) through online system.
• Registration in the OSS-RBA system. As we have mentioned before, the
registration of legal entities is available online. We fill up the online single
submission form based on your business data to get the NIB (Nomor Induk
Berusaha). The NIB number is a must for your project because it is used as the main
documentation for other purposes (it is your import license, business registry
number, etc.).
• License issuance:
a. If your business field is categorized low risk, NIB is a license to conduct business
activities.
b. If your business field is categorized middle-low risk, NIB and standard certificate
are license to conduct business activities.
c. If your business field is categorized middle-high risk, NIB and standard certificate
are license to conduct business activities after verified by related departments.
d. If your business field is categorized high risk, NIB and Izin (permit) are license to
conduct business activities after verified by related departments.

The process to get NIB number is very fast and takes no long time. For businesses that need
to do verification by related departments, the process will take times up to 3-6 month.

We are ready to consult you and your partners according to all the peculiarities of the
Indonesia- based investing campaign establishment. When you complete the PT PMA setting-
up process, you get all the range of opportunities (property purchases, staff recruitment, other
activities). Get complete consultancy to realize your plans overseas. If you want to ask some
questions right now, contact our advisory team. We will be pleased to assist you in your
business endeavors.

Page 3 of 3

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