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10 Facts About Setting Up a Foreign Company in Indonesia

There will be massive cooperation in economic sector—especially on e-commerce—between Indonesia and Singapore. It could be an impact of the success of local e-commerce companies in Indonesia; 41 Singaporean companies are going to invest there. Therefore, Singapore company setting up a foreign company in Indonesia is a good development in economic and diplomatic sectors of both countries.

Know the 10 facts on setting up a PT PMA before you start to invest

Know the 10 facts on setting up a PT PMA before you start to invest - 10 Facts About Setting Up a Foreign Company in Indonesia
Know the 10 facts on setting up a PT PMA before you start to invest – 10 Facts About Setting Up a Foreign Company in Indonesia – pixabay

Following the good news about Singapore company setting up a foreign company in Indonesia, there is no doubt that the other countries all around the world are also interested in investing in the archipelago country. So, before you consider establishing your own PT PMA here, kindly read the 10 facts regarding PT PMA establishment below.

  1. PT PMA can be established by entirely using the capital derived from foreign investors or joint ventures with the local businessmen. The following parties may be referred to as foreign investors and shall be entitled to establish PT PMA in Indonesia:
  • Foreign nationals
  • Overseas business entities
  • Foreign governments that invest their capital in Indonesia
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Setting Up a Foreign Company in Indonesia
Minister Ciobo also met with representatives of the Australia Indonesia Business Council, as well as young Australian entrepreneurs – Setting Up a Foreign Company in Indonesia – flickr
  1. One of the advantages of setting up a PT PMA is that a company can be a direct sponsor to apply for a business visa, IMTA (Permit to hiring foreign personnel), or KITAS (Limited Stay Permit Card) for foreign workers being assigned in Indonesia.
  2. A PT PMA can be established anywhere in Indonesia. However, the administration and application of the company establishment are still handled by BKPM (Investment Coordinating Board) located in Jakarta.
  3. It is essential to know whether the type of business field you are running can be wholly foreign-owned or not. It is regulated in the Presidential Regulation No. 44/2016 concerning the List of Closed and Open Business Fields on the Investment Negative List (DNI).
  4. There are about 20 types of closed business fields based on the DNI, such as cultivation of marijuana, gambling, fishing or possessing protected species, explosives, and coral exploitation as decoration materials.
  5. The minimum investment value assigned to each PT PMA is Rp10,000,000,000 (ten billion Rupiah), while the amount of paid-in-advance capital is 25% of the total investment value.
  6. Businesspeople or investors who wish to establish PT PMA in Indonesia must complete the following documents to be submitted to BKPM:
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Businesspeople or investors who wish to establish PT PMA in Indonesia must complete the following documents to be submitted to BKPM - 10 Facts About Setting Up a Foreign Company in Indonesia
Businesspeople or investors who wish to establish PT PMA in Indonesia must complete the following documents to be submitted to BKPM – 10 Facts About Setting Up a Foreign Company in Indonesia – bkpm
  • Copy of passport for foreign nationals.
  • Copy of Identity Card (KTP) and special Tax ID Number (NPWP) of an Indonesian citizen.
  • Copy of the Property Tax Certificate (PBB) of the place of business.
  • Certificate of Domicile from the manager of the building (especially if the office is located in one office building area).
  • Two sheets of a photograph of 3 × 4 size
  1. Having officially obtained the valid business license, a PT PMA has full authority such as facilities and waivers of import duties for machinery, import tax facility, and recommended visa for work (TA.01).
  2. A foreign investor may also set up a local nominee company with 100% Indonesian shareholders yet still under the foreign investor’s control.
  3. A representative office can also be established without minimum requested capital and can be 100% owned by the foreign investor, but with restricted business activities and no income.

Choose only the most reliable law firm to help you establish your PT PMA. One of them is company-registration.co.id.

Get more details on the procedure and the requirement of having a PT PMA done here.

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