PT PMA Setup Guide: Establishing Your Foreign-Owned Company in Indonesia

Updated October 2026 · 10-minute read

Indonesia is Southeast Asia's largest economy and home to more than 270 million consumers. If you're a foreign investor who wants to trade, hire and invoice here in your own name, there is one vehicle built for the job: the PT PMA. This guide explains what it is, what it costs to capitalise under the rules introduced in late 2025, and exactly how to set one up. (Still weighing the market itself? Start with why you should invest in Indonesia.)

What is a PT PMA?

PT PMA stands for Perseroan Terbatas Penanaman Modal Asing — a limited liability company with foreign investment. Any Indonesian limited company (PT) with at least one foreign shareholder, however small the stake, is classed as a PT PMA and falls under foreign investment rules administered by the Ministry of Investment and Downstream Industry / BKPM.

For foreigners, it is the only structure that allows full commercial operations in Indonesia: signing contracts, issuing invoices, employing staff, importing goods and sponsoring work permits. The alternatives each have real limits:

If you'd rather not build everything from scratch, a PT PMA can also be the vehicle for partnering with an established local operator. See our joint venture partnership opportunity for how that can work.

Capital requirements after BKPM Regulation 5/2025

The biggest change in years came on 2 October 2025, when BKPM Regulation No. 5 of 2025 took effect. It cut the minimum paid-up capital for a PT PMA from IDR 10 billion to IDR 2.5 billion — a 75% reduction in the cash you must deposit up front.

It's important not to confuse the two headline numbers:

• Paid-up capital (IDR 2.5 billion) is cash actually deposited into the company when it's established. It's a per-company figure, not per business activity.
• Investment value (more than IDR 10 billion) is your investment plan — what you commit to invest over time in each business line and location. It hasn't changed. Your progress toward it is tracked through quarterly investment reports (LKPM), and the regulation doesn't set a hard deadline for reaching it.

Already have a PT PMA capitalised at IDR 10 billion? Existing companies can apply to amend their capital structure under the new rules, but reducing capital is a formal process with tax and creditor implications. Many advisers recommend keeping your current structure unless you have a clear reason to change it.

Check your business activity (KBLI) first

Before anything else, identify your KBLI codes — Indonesia's 5-digit business classification. Everything flows from them: whether foreigners may invest, how much foreign ownership is allowed, your risk level, and which licences you'll need.

Indonesia uses a Positive Investment List (Presidential Regulation 10/2021, as amended by 49/2021). Most sectors are now fully open to 100% foreign ownership. The remainder fall into a few groups:

• Open: 100% foreign ownership allowed (most services, IT, manufacturing, consulting, hospitality).
• Open with conditions: foreign ownership is capped or requires a local partner or special licence.
• Reserved: set aside for cooperatives and micro, small and medium enterprises.
• Closed: a short list of activities closed to all private investment.

Each KBLI is also assigned a risk level under the risk-based licensing system (OSS-RBA): low, medium-low, medium-high or high. Low-risk activities need only the NIB; higher-risk activities require additional standard certificates or permits before you can operate.

Shareholders, directors and commissioners

Under Indonesia's Company Law, every PT PMA needs:

• At least two shareholders — individuals or companies, foreign or Indonesian. A single foreign owner usually holds the second share through another person or a related entity.
• At least one director (Direksi) who manages day-to-day operations. Foreigners can be directors, but certain roles — notably human resources director — are reserved for Indonesian citizens.
• At least one commissioner (Dewan Komisaris) who supervises the board of directors. Foreigners may serve.
• A registered address in Indonesia, in a zone permitted for your business activity. Many companies start with a virtual or serviced office where permitted.

Foreign shareholders who also serve as directors or commissioners can obtain an investor KITAS (limited stay permit) sponsored by the company, subject to immigration requirements.

Step-by-step setup process

1. Confirm KBLI codes and ownership limits

   Check each activity against the Positive Investment List and its risk level. Settle the shareholding split, capital amount and investment plan.

2. Prepare documents

   Passport copies for individual shareholders, directors and commissioners; for corporate shareholders, the articles of association and certificate of incorporation (usually legalised or apostilled and translated); plus the company address and contact details.

3. Reserve the company name

   Your notary checks and reserves the name with the Ministry of Law (AHU system). Names must be in Indonesian, consist of at least three words and not duplicate an existing company.

4. Sign the deed of establishment

   An Indonesian notary drafts the deed and articles of association, covering shareholders, capital, KBLI codes and management. It can often be signed by proxy, so you don't need to be in Indonesia.

5. Obtain Ministry of Law approval (SK)

   The notary submits the deed through AHU and the Ministry issues its decree, giving the company legal-entity status.

6. Register the tax ID (NPWP)

   The company is registered with the tax office and receives its tax identification number.

7. Get your Business Identification Number (NIB) via OSS

   The NIB is issued through the Online Single Submission (OSS-RBA) system. It acts as your company registration, importer ID and customs access, and is the base licence for all others.

8. Open a bank account and deposit capital

   Open a corporate account with an Indonesian bank and deposit the paid-up capital. Bank onboarding runs on its own timeline and often requires directors to verify identity.

9. Secure sector-specific licences

   For medium- and high-risk activities, complete the standard certificates or operational permits required for your KBLI before you start operating.

10. Hire and register

    Register employees with BPJS (health and employment social security), apply for work permits and KITAS for foreign staff, and set up payroll tax.

How long does it take?

With complete documents, the legal incorporation steps (deed, Ministry of Law approval, NPWP and NIB) are typically completed in around two weeks. Allow four to eight weeks in total to be fully operational once you add bank account opening, capital deposit and any sector licences. High-risk or regulated sectors (financial services, healthcare, telecoms) can take considerably longer because they need approval from the sector regulator as well.

Ongoing compliance after setup

Registration is the start, not the finish. A PT PMA has recurring obligations, and authorities have become much stricter about enforcing them:

• LKPM (Investment Activity Report) — filed quarterly through OSS for each business activity and location, even if you have no revenue yet. Late or missing reports can lead to warnings and suspension of your NIB, and reports showing no investment realisation over several consecutive quarters can trigger automatic sanctions.
• Tax filings — monthly withholding and VAT returns (where applicable) plus the annual corporate income tax return. The standard corporate tax rate is 22%.
• Employment obligations — BPJS contributions, payroll tax, company regulations once you reach the headcount threshold, and foreign worker permits (including the expatriate placement plan).
• Corporate housekeeping — annual general meeting of shareholders, updated beneficial ownership information, and notarial amendments whenever you change shareholders, directors, capital, address or KBLI codes.

Common mistakes to avoid

• Using a nominee. Putting shares in an Indonesian friend's name to avoid the PT PMA rules gives you no legal protection, and such agreements are void under Indonesian law.
• Picking the wrong KBLI. Operating outside your registered activities can invalidate licences and cause problems with tax, customs and immigration.
• Treating paid-up capital as a formality. Under the new rules the money has to genuinely sit in, or be spent by, the company — and that's traceable through LKPM.
• Forgetting LKPM. It's the most common reason dormant or small PT PMAs run into trouble.
• Assuming IDR 2.5 billion applies everywhere. Check sector-specific capital rules before you sign the deed.

Frequently asked questions

This article is general information, current as of October 2026, and is not legal or tax advice. Indonesian investment regulations change frequently and sector rules vary — confirm your specific situation with a licensed notary or legal adviser before incorporating.