Indonesia continues to be one of the most attractive countries in Southeast Asia for foreign investors. With its rapidly growing market, abundant resources, and government support for business expansion, Indonesia presents a promising landscape for global investment. One of the most common legal entities for foreign-owned businesses in Indonesia is the PT PMA, or Foreign Investment Limited Liability Company. This article will walk you through what a PT PMA is and how to establish one smoothly in Indonesia.
What is a PT PMA?
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a limited liability company established under Indonesian law that allows foreign ownership. It can be 100% foreign-owned or formed through a partnership with local investors. The main objective of foreign investment in Indonesia is to help boost the national economy and create job opportunities for the local workforce. Through foreign direct investment, the country can accelerate economic development and stimulate innovation across various industries.
What is a Foreign Investment Limited Liability Company (PT PMA)?
A PT Penanaman Modal Asing (PT PMA) is a limited liability company established under Indonesian law that involves foreign capital. Foreign investment refers to the activity of placing capital within the territory of the Republic of Indonesia to start and operate a business. This capital may come entirely from foreign investors or in partnership with local investors.
The objective of foreign investment in Indonesia is to improve the welfare of society and serve as a source of funding to accelerate the country’s economic growth. By encouraging foreign investment, Indonesia also aims to create more job opportunities through the emergence of new businesses.
Procedures for Establishing a PT PMA in Indonesia
Many foreign investors are still unsure about how to begin investing in Indonesia. Below is a step-by-step guide on how to set up a Foreign Investment Company (PT PMA) in the country:
1. Fulfill the Requirements
Before setting up a PT PMA, ensure that your company has all the necessary documents in place. These include the Deed of Establishment, the Ministry of Law and Human Rights’ decree on the legal status of the company, the company’s Tax Identification Number (NPWP), Business Identification Number (NIB), and other business licenses. In addition, a minimum total investment and paid-up capital of IDR 11 billion is required, excluding land and building costs.
2. Submit a Licensing Application
You’ll need to apply for business licenses for your PT PMA through the Indonesia Investment Coordinating Board (BKPM). It is highly recommended to consult or work with professionals who are experienced in handling such applications. Properly filling out the forms and ensuring all documents are accurate will help you avoid delays in the process. With expert assistance, your application has a higher chance of approval.
3. Prepare the Required Documents
This step is essential to ensure your application process runs smoothly. Whether you’re applying online or offline, make sure all required documents are complete.
There are several categories of documents you must prepare, such as legal documents for your business entity (e.g., Deed of Establishment, NPWP) and legal documents related to your business location (e.g., land ownership certificate, lease agreement, or purchase agreement).
4. Document Verification
All submitted documents will go through a verification process. If any documents are incomplete, the authorities will notify you and return the documents for completion. The verification process typically takes about one week from the date of document submission.
5. Verification Result
After verification, there are two possible outcomes: your application may be approved or rejected. If approved, you will receive your business license within two working days after the verification results are issued. If the application is rejected, you will receive an official rejection letter stating that your application did not meet the required criteria.
6. Investment Activity Report (LKPM)
The Investment Activity Report (LKPM) is a periodic report detailing the progress of your investment activities, including any challenges encountered during implementation. This report must be carefully prepared in accordance with the applicable regulations.
Check www.meso.co.id to find out more about our services, or live chat with our agent through our WhatsApp account at +62812-1315-4189.
