Foreign INVESTMENT COMPANY PMA (Penanaman Modal Asing)
Over the past decade, Indonesia has become one of the most popular investment destinations. Bali is at the center of attention of potential investors.
PT PMA is the main license that regulates the activities of foreign investors. PT PMA is suitable for projects of any size, and investors do not face any restrictions in their endeavors.
WHAT IS CONSIDERED A FOREIGN COMPANY?
Any organization that is invested by foreign investors (even with 1% of shares owned by foreigners) is considered foreign. Indonesian regulations allow foreign direct investment under the PT PMA license.
However, if you only want to represent a foreign company in Indonesia and will not receive any income from local activities, you can create a representative office instead.
RESTRICTIONS FOR A FOREIGN COMPANY
Indonesian law regulates the maximum allowable share of foreign capital owned by a company, depending on the activity of the company. In some enterprises, 100% participation of foreign capital is allowed, in some not over 10%. The list of restrictions is contained in the document DNI (Negative Investment List).
HOW DO I REGISTER A PT PMA IN INDONESIA?
The authorized capital of 2.5 billion Indonesian rupiah or more is required.
At least 2 shareholders are required.
At least one resident of Indonesia must be listed in the company’s directory.
The registered address of the company.
STEPS IN THE PT PMA REGISTRATION PROCESS
- Choosing the right business classification to get the maximum allowed percentage of ownership;
- Selecting an office, getting the company’s address (Domicile Letter);
- Getting the NPWP tax number from the Tax Office;
- Getting the NIB business registration number (Nomor Induk Berusaha);
- Obtaining commercial licenses.
Some projects require additional documentation and permits, which affects the cost.