Foreign Investment Company in Indonesia has existed since the 1950s. In regards to investment, the Indonesian government has regulated it in Law No. 25 of 2007. It discusses all matters relating to investment, including the procedures for the establishment of a foreign investment company. Basically, there is no significant difference between the establishment of foreign investment company and local company. The most fundamental difference between the two lies in the shareholders and the amount of their capital.
Things to Consider before Setting up PT. PMA (Foreign Owned Company)
Here are some points that must be considered by the investors before applying for the establishment of PT. PMA to BKPM (Investment Coordinating Board of Indonesia):
- Type of business
Firstly, you must know what type of business can be wholly owned by a foreign investor. This matter has been regulated in Presidential Regulation no. 44 of 2016 concerning the List of Closed Business Fields and Opened Business Fields with Requirements in the Field of Investment or commonly referred to as Investment Negative List (DNI).
- Investment Value
The minimum investment value assigned to PT. PMA is Rp10 Billion, while the amount of the Issued and Paid-in Capital is 25% of the total investment value.
- Office Address
Founder of PT. PMA is required to include the exact address of the company’s physical office, not the virtual office.
Certainly, there are several steps that must be passed so that a company can operate legally in Indonesia:
- Submitting Temporary Permit
The first step is to apply for a temporary permit. This is done to find out whether the business field run by the company is open to foreign investors.
- Registering Investment at BKPM
The next is to apply for investment registration at BKPM. The documents that must be attached by the applicant are:
- Certificate from Embassy of investor’s origin country in Indonesia.
- Photocopy of passport.
- Company’s articles of association in English.
- Photocopy of Company Establishment Deed.
- Photocopy of NPWP (Tax ID number).
- Original authorized power of attorney and signed by company directors.
If the documents are complete and Investment Permit has been issued by BKPM, the next step is to apply the PT. PMA Principle Permit (Izin Prinsip).
How to Apply a Principle Permit for PT. PMA
Investors who want to establish PT. PMA in Indonesia should complete the following documents which are then submitted to BKPM:
- Photocopy of passport for a foreign citizen.
- Photocopy of Identity Card (KTP) and NPWP of an Indonesian citizen.
- Photocopy of Land and Building Tax Letter of business place.
- Photocopy of the contractual letter (included if the office is occupied with a contract status).
- Certificate of Domicile from the manager of the building (only included if the office is located in one office building area).
- Pas photo of a person in charge of the business, size 3 × 4 as much as 2 sheets.
Because the stages are relatively long and complicated, it’s advisable to consult with a company engaged in business licensing. In this case, Company Registration Co. ID can be the right choice for you. Experienced for more than 15 years, this company makes document processing easier and faster.