Indonesia has been home to emerging markets with various promising opportunities. Accordingly, one of the most favorable alternatives to legally do business as foreign investors is to setup PMA company in Indonesia.
Registering a foreign-owned company (PT PMA) grants foreign investors or businesses the same rights and duties as other local companies in this country. They can gain some benefits, such as using land, building on, taking part in local tenders, or sponsoring visas for foreign employees to live and work legally in the Indonesian territory.
This article tries to address several questions – how to set up a PMA company, what the registration requirements are, what is the minimum paid-up capital, and the procedures to establish a PMA company.
What is the requirement for PMA registration?
By definition, a PMA company is a limited liability company with foreign shareholders (foreign direct investment). Popular among foreign investors or businesses, it has a specific design that meets Indonesian legal requirements. If you want to register a PMA, the following are some requirements to meet.
The Minimum Capital
It is about the minimum investment plan and the minimum paid-up capital after the incorporation. We will separately discuss it further in the next subheading.
The structure of the PMA company in Indonesia must consist of the following:
A minimum of two shareholders, either individuals or other legal entities (corporate shareholders).
Commissioners and directors
A PMA company should at least have one commissioner and one director. A commissioner can be a non-resident of Indonesia who supervises the director(s). In charge of the company’s daily operations, one of the directors should at least be an Indonesian citizen who has an NPWP (tax card). After the incorporation, a foreign director can apply for a work permit.
Select your business location thoroughly before registering your PMA company as it closely relates to local permit approvals.
Make sure that your PMA company has a registered address under the rules of your business location. For example, in Jakarta, it should be in a building with an IMB (a building permit) that permits any operation of an office.
Having a virtual office offers several advantages – reducing your overhead costs, no need for building permits, and faster registration completion.
What is the minimum capital requirement for PMA Indonesia?
One of the essential factors to set up PMA company in Indonesia is the financial requirement as the minimum investment plan will cost about IDR 10 billion. Any foreign investor or business to establish a foreign-owned company in this country needs to pay a minimum paid-up capital of ten billion rupiahs (IDR 10 billion or about US$ 700, 000).
Also, there is a requirement for the company’s shareholders to sign off a Capital Statement Letter, affirming they have adequate funds to pay the minimum capital for opening PMA company. The prospective PMA has to deposit the minimum paid-up capital after the company’s establishment and the issuance of the bank account.
Procedures for Setting up a Foreign Company (PMA) in Indonesia
How to set up a PMA company in Indonesia? You need to complete the following processes before registering it.
1. Company Name
You need to decide on your company name and create at least two alternatives in case of non-approval.
2. Deed of Establishment
You need to draft and sign, as well as submit this legal document to The Ministry of Justice and Human Rights. This document will contain, among others, the company business address, company shareholders’ names (and personal information), commissioners and directors, paid-up capital, business classification, and business activities.
3. Tax Registration
Get your NPWP (Tax Identification Number) for your PMA company from the local tax office. Once you are registered as a Taxpayer, you have to obey or follow some compliances.
4. NIB (Identification Number to Operate)
A NIB is a distinctive number that will identify your PMA company profile in Indonesia. It also functions as an import license, NIK (Customs Identification Number), and business registration number. It also automatically registers your company under BPJS Kesehatan dan Ketenagakerjaan (Health and Social Security System).
5. Operational License or Commercial License
If there are no other requirements, you will get your operational license or commercial license along with the above NIB.
All the setup processes mostly go through the so-called OSS (One Single Submission) and may take about ten weeks (1 or 2 weeks for OSS registration without any additional licenses). In addition, you may need to open a company bank account upon incorporation.
If you want faster and easier procedures, it is recommendable to seek professional advice and assistance that come with dependable and transparent solutions. They will allow you to enjoy the primary benefits of establishing a PMA company – full ownership and control over your business operations (rights to register products, hire foreigners, and more).
So, are you ready to take the chance? Contact us and join other foreign investors and businesses who have made their marks in this country.
Not only that, InvestinAsia also provides Indonesian business visa services for you!
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