Opportunity with PMA in Indonesia is growing every year. Factually, Indonesia is one of the fastest-growing developing countries and the largest economy in South East Asia. With their large population and high demand from the people, opportunities arise. The government pours budget into building highways and transnational ways to connect the suburban areas to larger cities. This, in turn, increases opportunity with PMA for foreign investors.
Existing Opportunity with PMA in Indonesia
The current economy and the climbing demand have created a lot of potential business opportunities. These potential business opportunities give birth to the rise of startup companies in the market. Most of these startup companies occupy the digital marketing and service industries that heavily rely on technology.
This makes technology-based industries a lucrative option for PMA to invests in Indonesia. Some foreign-owned companies have experienced success in the country using a large marketing budget, smart business model, and application of IoT. Through these ingredients of success, they are able to reach a wide audience and create memorable branding in the public.
Other industries need to rely on other things like technical skills, technology in machinery, and experience in the field to create success. Said industries are like oil and gas constructions, tanker construction, railway construction, locomotive construction, textile industry, etc. For those industries, most local companies in Indonesia does not have the expertise needed to fulfil the job well. By participating in the industry, foreign companies can fill in the holes that local companies cannot. The need for this cooperation drives the government to allow partial ownership over certain industries.
The reason for this partial ownership is to give local companies the opportunity to work in the field. The government tries to prevent foreign companies to dominate the industry. With their experience and more advanced technology and skills, it is likely that without restrictions local companies do not have a chance to participate in the industry.
Business Opportunity with PMA in Indonesia
The government recently introduces Omnibus Law which heavily indicates that they encourage foreign investment in the country. The government made incentives on labour and taxes to make it easier for foreign companies to operate in the country. Foreign companies are now able to have protection against labour. It is the perfect time to get into Indonesia’s market and expand the business.
For starters, foreign companies must first set up a PT PMA or foreign direct investment company. Without a PMA, foreign companies cannot operate in the country. Foreign companies can enjoy the benefits of the opportunity with PMA in Indonesia with proper legality.
One of the benefits of becoming a PMA is the ability to do business transactions in the country. If a foreign company establishes itself as a representative company in Indonesia, it is limited to marketing activity only. They will miss the opportunity with PMA.
Through having PMA, the company can get involved with key strategic projects. These projects are usually large scale with a big risk big yield characteristic. Some examples of these key strategic projects are oil tanker construction, telecom infrastructure, etc.
More reads: Understanding PT PMA Ownership in Indonesia
Safer Business Option
The other benefit of PT PMA is the security of foreign company owners. Depending on the business, certain industries allow the company to have full ownership of PT PMA. Finding a local business partner may be difficult. If there is no trust between business partners, it will not work.
Businesses require trust between shareholders and partners to make it work. If the local partner is untrustable, it is sometimes better for foreign investors to control their own company. Through having full ownership, the foreign shareholders can protect their business and position in the company.
Contact MESO if you are interested in setting up PT PMA or a foreign investment company in Jakarta. Plus, get your very own fully furnished serviced or private office and virtual office at MESO. Visit us on our website or send us an e-mail for more information.
