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PT PMA as a "Fictitious" Scheme for a KITAS

To live legally in Bali for years, some foreigners set up a company (PT PMA) and use it to obtain an investor KITAS, even though they never intended to run a business.

In reality, a PT PMA opened only for a KITAS can turn out to be far more expensive and complicated than it seems. Reports must be filed even if there is no business, the company faces sanctions if it does not invest, and the owner risks KITAS cancellation and deportation. You can live on the island on a long-term visa, without a company of your own.

Why opening a company does not solve the KITAS question

A PT PMA is an Indonesian company with foreign ownership. If a person genuinely plans to do business in Indonesia, they can open such a company and, if the requirements are met, obtain an investor KITAS — a permit for a long-term stay in the country.

But there is another scenario. A foreigner has no plans to do business and turns to an agent who offers to register a company and arrange a KITAS. The owner pays for the paperwork, but the company has no real activity. It exists only to obtain an immigration status.

Registering a company does not by itself give the right to an investor KITAS. You must meet the requirements for investment and for the size of your share in the company, and once the company is open, it has obligations to government authorities.

The capital was lowered, but the investor requirements remain

In October 2025, Indonesia lowered the minimum issued and paid-up capital of a PT PMA from 10 billion to 2.5 billion rupiah, about 150,000 US dollars (Article 26(10) of Permen Investasi/BKPM No. 5/2025). Because of this, it may seem that opening a PT PMA is now easier: just pay in the minimum amount, register the company, and get an investor KITAS.

But the company's minimum capital and the minimum investment are different conditions. The first was indeed lowered, while the second stayed the same.

Investment must exceed 10 billion rupiah (Article 26(2) of Permen Investasi/BKPM No. 5/2025). The company commits to investing this amount in the project and reports on it every quarter. As a rule, it is calculated separately for each five-digit KBLI code and each project location, excluding the value of land and buildings. KBLI is the code that defines a business's type of activity in Indonesia. For hotels, villas, and development projects, land and buildings are included in this amount.

In addition, for an E28A investor KITAS, the personal share in the company must be worth at least 10 billion rupiah. With a smaller share, a foreigner who serves as a director or commissioner will have to obtain a work KITAS. Its requirements are different: the company needs a foreign worker utilization plan (RPTKA) approved by the Ministry of Manpower, and it pays a mandatory DKP-TKA levy for each such worker.

Also, the paid-up capital cannot be freely withdrawn for 12 months. This money can only be used to buy assets, for construction, or for the business's operating expenses (Article 27 of Permen Investasi/BKPM No. 5/2025).

Therefore, a PT PMA with the minimum capital of 2.5 billion rupiah does not give the right to an investor KITAS.

A company with no activity still has to report

Even if a company conducts no commercial activity and makes no profit, it remains an active legal entity and must file reports regularly and bear the related costs.

Investment report (LKPM). It is filed once a quarter, no later than the 15th of the following month. If the company has not yet started operating, it must still report on the preparatory stage.

Annual corporate tax return. The SPT Tahunan Badan is filed by April 30, even if the company had no income.

Payroll tax and VAT reporting. The PPh 21 return is filed for the months in which salaries were paid, as well as for December. If the company is registered as a VAT payer (PKP), it also files a return for this tax every month — a nil return if there were no transactions (Article 171 of PMK No. 81/2024).

Company annual report. From June 1, 2026, it is filed through the government SABH system (Permenkum No. 49/2025): the document is approved by the general meeting of shareholders, and a notary formalizes the resolution and uploads it to the system within 30 days. From November 2026, a missed deadline exposes the company to a written warning, and if it still has not reported after 30 days, its access to SABH is blocked. Without it, the company cannot register a change of director or shareholders, or amendments to its articles of association.

Both the company and the foreigner can be penalized

Fines and license revocation

LKPM violations. If a company misses two reporting periods in a row, a sanctions procedure begins against it. First, the company receives three consecutive warnings, followed by suspension of its activities together with an administrative fine. The final stage may be the revocation of its license and its business identification number (NIB). The company then loses access to the OSS system and cannot apply for new permits for at least a year (Articles 372–376 of Permen Investasi/BKPM No. 5/2025).

No growth in investment. If no growth in investment is shown in the LKPM for four reporting periods in a row, this may be grounds for sanctions, even if the company files its reports on time (Article 373(2) of Permen Investasi/BKPM No. 5/2025).

Fines for tax reporting. The fine for missing a monthly tax return is 100,000 rupiah, for VAT — 500,000 rupiah, and for the annual corporate return — 1 million rupiah (Article 7(1) of the law on general tax procedures, UU KUP).

The foreigner may be deported with an entry ban

If a foreigner with an investor KITAS conducts no real activity, the immigration service may treat this as misuse of their stay permit. In practice, administrative measures are applied more often: KITAS cancellation, deportation, and a ban on entering the country for up to 10 years, which can be extended. But the law also allows criminal penalties: under Article 122 of Law No. 6/2011 on Immigration, this carries up to 5 years of imprisonment and/or a fine of up to 200 million rupiah. This fine has applied since January 2, 2026, when Law No. 1/2026 aligned criminal sanctions with the new Criminal Code. The same article also penalizes anyone who instructed the foreigner to act this way or made it possible for them to do so.

Bali is tightening oversight of foreign-owned companies

According to data from Indonesia's investment authority BKPM, in 2025, 426 companies in Bali were found to show signs of violations, and 423 of them received administrative sanctions. The companies turned out to be fictitious, operated in sectors closed to foreign capital, lacked mandatory permits, or invested less than required. The authority singled out nominee owners as a separate problem.

In November 2024, BKPM revoked the NIB of foreign-owned companies that had not met the obligation to invest more than 10 billion rupiah. In early 2025, Indonesia's immigration service inspected 267 such companies and identified 312 foreigners sponsored by the problematic firms. Some of them were deported.

There are also criminal cases. In July 2026, in Tangerang, the case of ten foreigners was handed over to the prosecutor's office — nationals of Pakistan and Iraq suspected of obtaining investor permits through fictitious companies and forged documents. According to the investigation, they did not invest money in a business or conduct any business activity. They face up to 5 years of imprisonment and/or a fine of up to 200 million rupiah.

Since May 2026, the Bali government has closed access in the OSS system to PT PMA registration for 18 activity codes (KBLI). The governor also announced special attention to companies that use virtual offices.

Long-term visas for living in Bali

They do not require a company of your own — which means no corporate reporting and no company inspections. Which visa suits you depends on your income, savings, and age.

Visa type

Main conditions

E33G — for remote workers

Income of 60,000 US dollars a year or more and an employer outside Indonesia

Second Home E33

A deposit of 130,000 US dollars in an Indonesian state-owned bank or the purchase of a condominium or apartment worth 1 million US dollars or more

Retirement E33F/E33E

Age 55 or older and income of 3,000 US dollars a month or more; E33F requires a sponsor, E33E requires a deposit of 50,000 US dollars in an Indonesian state-owned bank

Golden Visa E28C

Investment of 350,000 US dollars or more in Indonesian government bonds, shares of Indonesian public companies, or mutual funds — a 5-year stay; 700,000 US dollars or more — a 10-year stay

If your business in Bali is real, a PT PMA is a good fit. You need to choose in advance a type of activity open to foreign capital, make the required investment, and set up accounting support.

What to do if a PT PMA has already been opened only for a KITAS

If the company is already registered but the business never started, its obligations remain, even if it stops reporting.

A company you no longer need can be officially liquidated, so that fines and reporting obligations stop accumulating. Together with the company, the basis for the investor KITAS also disappears, so you can stay on the island on one of the long-term visas.

Legal Indonesia specialists can help you open a PT PMA for a real business and take over its accounting, choose and arrange a long-term visa for living in Bali, or close a company you no longer need.

Get a consultation

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