Indonesia continues to attract global investors due to its vast market and strategic location. For foreigners looking to tap into this growing economy, establishing a Foreign-Invested Company (PT PMA) offers a viable legal framework. This article explains why Indonesia is a magnet for foreign capital, what a PT PMA is, and the main requirements for setting up a foreign company in Indonesia.
Why Indonesia is an Attractive Destination for Foreign Investment
Indonesia’s appeal lies in its strategic location between Asia and Australia, making it a key hub for international trade. The country has over 270 million people, forming one of the largest consumer markets in Southeast Asia. This demographic, paired with a growing middle class, creates high demand for goods and services.
Natural resources also play a major role. Indonesia offers vast reserves in mining, agriculture, and energy, presenting endless opportunities for resource-based industries.
Moreover, Indonesia is a member of ASEAN, providing investors with easy access to regional markets. The government supports investment through simplified regulations, fiscal incentives, and infrastructure development, especially in Special Economic Zones. This pro-investment stance continues to improve the ease of doing business.
What is a PT PMA (Foreign-Invested Company)?
A PT PMA is a limited liability company in Indonesia that has partial or full foreign ownership. According to Indonesian law, foreign investors can establish a business either on their own or in partnership with local investors.
This company structure allows foreigners to operate legally in Indonesia, either through full ownership or joint ventures. PT PMAs are suitable for various industries, though certain sectors may require specific ownership limits based on Indonesia’s Positive Investment List.
Read More: Understanding PT PMA: The Ideal Legal Entity for Foreign Businesses in Indonesia
Key Requirements for Establishing a Foreign Company in Indonesia
To set up a PT PMA, foreign investors must meet specific legal and financial requirements:
- Company Structure: The business must take the form of a limited liability company (PT).
- Shareholders: A minimum of two shareholders is required. These can be individuals or legal entities, and at least one must be a foreign party.
- Minimum Investment: The PT PMA must commit to an investment value of at least IDR 10 billion (excluding land and buildings).
- Paid-Up Capital: The paid-up capital must also be at least IDR 10 billion and should be in place within one year of receiving the business license.
- Share Ownership: Shareholding is calculated based on the nominal share value. Each shareholder must hold at least IDR 10 million in nominal shares.
- Business Sector Eligibility: Investors must verify that the intended business activity is listed in the Positive Investment List and open to foreign investment.
Required Documentation:
- Deed of Establishment notarized by an Indonesian notary
- Approval from the Ministry of Law and Human Rights
- Business Identification Number (NIB)
- Company Tax ID (NPWP)
- Proof of a legal business address
- Environmental permits, if applicable
Licensing Platform:
- All business licensing must be submitted via the Online Single Submission (OSS) system.
Read More: Is PT PMA the right way to invest in Indonesia and Bali?
Let Seven Stones Indonesia Help You Establish Your Business
Setting up a foreign company in Indonesia requires local knowledge and legal precision. Navigating regulations, permits, and capital requirements can be overwhelming without professional guidance.
Our team at Seven Stones Indonesia specializes in assisting foreign investors with PT PMA setup, licensing, and compliance. We provide tailored solutions to ensure your investment journey in Indonesia is smooth and compliant.
Let us help you turn opportunities into success. Contact Seven Stones Indonesia today to get started on establishing your foreign company in Indonesia.
Source: kontrakhukum.com, aseanbriefing.com
Image: Getty Images
