Foreign investors can legally start a business in Indonesia. The only permitted commercial structure is a PT PMA (Perseroan Terbatas Penanaman Modal Asing), a foreign-owned limited liability company allowing up to 100% ownership in sectors open under Indonesia’s Positive Investment List. As of October 2025, BKPM Regulation No. 5 of 2025 cut the minimum paid-up capital from IDR 10 billion to IDR 2.5 billion (around USD 150,000) — the most significant reduction in foreign investment entry costs in years. There is also a hard deadline most investors do not know about: all businesses must update their KBLI classification codes to the 2025 system by 18 June 2026. New registrations start under KBLI 2025 from day one.
This guide covers the full process: choosing the right entity, understanding the new capital rules, registering step by step, getting your visa, and managing post-registration compliance. For a broader look at the foreign direct investment landscape in Indonesia, including sector priorities and FDI law, that resource covers the wider context in depth.
What the Law Actually Allows Foreign Business Owners
Indonesia’s investment framework changed substantially in 2021. The Omnibus Law on Job Creation (Law No. 11 of 2020) replaced the old Negative Investment List with a Positive Investment List through Presidential Regulation No. 10 of 2021. The old system defaulted to restriction. The new one defaults to openness: sectors are available to foreign investors unless specifically limited or closed.
More than 200 sectors are now open to 100% foreign ownership. Partial ownership caps (commonly 49% to 67%) still apply to certain sectors, and a smaller number of activities are closed entirely to foreign capital. What determines your ownership ceiling is not your nationality — it is your specific five-digit KBLI code, Indonesia’s national business classification system. Choosing the right KBLI code before you register is one of the most consequential decisions in the entire process, and one of the most common sources of costly mistakes.
Which Business Structure Is Right for You?
Most foreigners who want to run a commercial business in Indonesia register a PT PMA. Two other structures exist for specific situations worth understanding before you commit.
PT PMA (Foreign-Owned Limited Liability Company)
A PT PMA is the main vehicle for foreigners seeking equity ownership and full commercial operations. It can issue invoices, hire employees, hold contracts, own assets, and pay dividends. Ownership up to 100% is available in eligible sectors. For a detailed breakdown of what a PT PMA is and how it works — including corporate structure, legal basis, and shareholder arrangements — that full guide covers the entity from the ground up.
Representative Office (KPPA)
A representative office lets a foreign company establish a presence in Indonesia for market research, liaison, and business development, without generating revenue or signing commercial contracts. It works well for companies that want to test the market before committing to full incorporation. If this fits your situation, the process for setting up a representative office in Indonesia is covered in that guide.
PT Perorangan
A sole proprietorship option available only to Indonesian citizens. Foreign nationals cannot use this structure, regardless of residency status or time spent in Indonesia.
Also read: The Types of Companies and Business Entities in Indonesia
Key Requirements Before You Register
Four things need to be confirmed before you touch the registration system. Skipping these is the most consistent reason PT PMA registrations stall partway through. Running through the complete pre-launch checklist before filing prevents the kind of corrections that cost weeks.
A PT PMA requires at least two shareholders, either individuals or corporate entities. Both can be foreign. A single individual cannot hold a PT PMA alone unless a corporate entity serves as the second shareholder.
A Director and a Commissioner
The company must appoint at least one director and one commissioner. Both can be foreign nationals. The director runs day-to-day operations; the commissioner provides oversight. Foreign directors need an Investor KITAS or work KITAS to remain in Indonesia legally and act as authorized signatories on corporate bank accounts.
A Business Domicile Address
The company needs a registered business address in Indonesia. A virtual office is accepted for most business activities under OSS-RBA, provided the provider holds a valid Surat Keterangan Domisili Perusahaan (SKDP). Some regulated sectors require a physical office. Confirm the requirement for your specific KBLI code before choosing your address solution.
Also read: RDTR 2026 Guide: Indonesia Business Zoning Rules
Your KBLI Code
Every business activity in Indonesia corresponds to a five-digit KBLI code. Your code determines your foreign ownership ceiling, your licensing requirements, your investment plan threshold, and which sector-specific regulations apply. New registrations after 18 June 2026 must use the KBLI 2025 classification system. Pick a code that precisely describes your actual activity — not a broad category that loosely fits. The gap between a general code and a specific one can mean the difference between 100% ownership and a 49% cap.
Capital Requirements in 2026: What Changed and What Did Not
Capital requirements changed substantially in October 2025 under BKPM Regulation No. 5 of 2025. Many investors and their advisors are still operating on the old numbers, and that leads to planning errors. The key is understanding that two separate figures exist with two separate legal functions.
| Capital Type | Old Requirement | 2026 Requirement | Notes |
|---|---|---|---|
| Paid-Up Capital (Modal Disetor) | IDR 10 billion (~USD 600,000) | IDR 2.5 billion (~USD 150,000) | Cash or assets deposited into the company bank account |
| Total Investment Plan (Nilai Investasi) | IDR 10 billion per KBLI | IDR 10 billion per KBLI (unchanged) | Realized progressively over time; includes equipment, working capital, and project costs |
| Investor KITAS Threshold | IDR 10 billion in shares | IDR 10 billion in shares (unchanged) | Governed by immigration law, not BKPM. The capital reduction does not affect this threshold. |
What this means practically: you can now register a PT PMA and deposit IDR 2.5 billion as paid-up capital while declaring a total investment plan exceeding IDR 10 billion to be realized over time. Your upfront cash requirement is now decoupled from your long-term project commitment. That is a real improvement for early-stage investors. What did not change: if you plan to use an Investor KITAS to live legally in Indonesia, the eligibility threshold stays at IDR 10 billion in personal share ownership. Immigration rules and BKPM investment rules are governed by different laws and different agencies.
Step-by-Step: How to Register a PT PMA in Indonesia
Registration runs through Indonesia’s OSS-RBA (Online Single Submission, Risk-Based Approach) system. Most steps can be completed remotely. The dedicated guide on setting up a PT PMA in Indonesia includes full document lists and procedural detail. The sequence below is what every investor needs to follow.
Step 1: Confirm Your KBLI Code and Ownership Eligibility
Before drafting a single document, check the Positive Investment List to confirm your business activity’s KBLI code and the maximum foreign ownership percentage allowed. If your sector has partial restrictions, decide at this stage whether a joint venture makes sense or whether your classification needs rethinking. Getting this wrong means restarting from the beginning.
Step 2: Reserve Your Company Name
The company name must consist of at least three distinct words and cannot duplicate an existing registered name or trademark. Name reservation goes through the Ministry of Law and Human Rights (MoLHR) online system. If the name is rejected, you revise and resubmit. Both Indonesian and English names are generally accepted, depending on business type.
Check Company Name Regulation in Indonesia
Step 3: Prepare and Notarise the Deed of Establishment
A licensed Indonesian notary drafts and notarises the Deed of Establishment (Akta Pendirian), which includes the Articles of Association. This document defines the company’s name, domicile, business purpose, capital structure, and shareholder details. Shareholders sign in person or via power of attorney. The notarised deed must reach MoLHR for legal entity approval within 60 days of issuance.
Step 4: Obtain Legal Entity Approval from MoLHR
The Ministry of Law and Human Rights reviews the deed and issues a legal entity confirmation electronically. This formally establishes the company as a legal entity in Indonesia. Standard processing takes five to ten business days.
Step 5: Register Through OSS-RBA to Obtain Your NIB
With MoLHR approval, the company registers on Indonesia’s OSS-RBA platform (oss.go.id), managed by BKPM. The system issues a NIB (Nomor Induk Berusaha) — a single business identification number that doubles as your trade license, importer registration, and customs access in most cases. The NIB is the central document in Indonesia’s licensing ecosystem and the practical proof that your company is operational.
Step 6: Obtain Sector-Specific Licenses
Depending on your KBLI code, you may need additional operational permits from sectoral ministries or local government. Low-risk activities may require nothing beyond the NIB. Medium-risk activities require a Standard Certificate (Sertifikat Standar). High-risk activities need a full Izin (business permit) from the relevant authority. OSS-RBA assigns the risk classification based on your KBLI code at registration.
Step 7: Register for a Tax ID (NPWP)
Every PT PMA must register for an NPWP (Nomor Pokok Wajib Pajak) with the Directorate General of Taxes. Without one, you cannot open a corporate bank account, properly obtain your NIB, or file mandatory tax returns. The NPWP registration process for a PT PMA typically takes one to three business days once documents are ready. Under Indonesia’s Coretax system, NPWP registration now links directly to your OSS company data.
Step 8: Open a Corporate Bank Account and Deposit Paid-Up Capital
Once the company has its NIB, NPWP, and MoLHR approval, it can open a corporate bank account at an Indonesian bank. The IDR 2.5 billion paid-up capital deposits after the account is opened. Foreign directors acting as account signatories need a valid KITAS — which means immigration status and banking readiness must be coordinated. Bank account processing typically runs one to four weeks depending on the institution and document completeness.
Getting stuck in the registration process?
InvestinAsia’s team of 380+ legal and business experts handles PT PMA registration end to end — KBLI confirmation, notary coordination, OSS filing, NIB issuance — so your entry is clean from the start.
Visa and Stay Permit: How to Live and Work Legally in Indonesia
Registering a company and legally residing in Indonesia are separate processes. Many foreign founders complete PT PMA registration from overseas and apply for a stay permit only when they are ready to be on the ground. Here are the main options.
Investor KITAS
The Investor KITAS (Kartu Izin Tinggal Terbatas) is the most common stay permit for foreign shareholders and directors of a PT PMA. It grants a two-year limited stay permit with multiple entry rights and immediate work authorization within the company. The eligibility threshold is at least IDR 1 billion in personal share ownership, with total company capital exceeding IDR 10 billion. This immigration threshold is set by the Directorate General of Immigration and was not changed by BKPM Regulation No. 5/2025. The paid-up capital reduction does not lower the KITAS eligibility bar. Full details on Investor KITAS requirements and the application process are in that dedicated guide.
Work KITAS (IMTA + KITAS)
Foreign nationals employed by the PT PMA in a director or key management role need a work permit (IMTA) and a work-based KITAS. The PT PMA as employer must first obtain an RPTKA (Foreign Worker Utilization Plan) from the Ministry of Manpower before the KITAS application can proceed.
Business Visa (B211A)
Before registering the company or while the KITAS application is in process, a B211A multiple-entry business visa lets you conduct business activities legally in Indonesia for up to 60 days per entry. Not a long-term work authorization, but the correct visa for early-stage market entry activities.
Post-Registration Compliance: What Comes After the NIB
Plenty of first-time investors treat the NIB as the finish line. It is not. A PT PMA has ongoing compliance obligations — and under the 2025 BKPM regulation, enforcement has teeth.
LKPM Reporting
Every PT PMA must submit quarterly LKPM (Laporan Kegiatan Penanaman Modal) reports to BKPM through the OSS portal, documenting investment realization against the declared investment plan. Under BKPM Regulation No. 5/2025, BKPM now actively monitors non-reporting companies. Consistent failure to file can result in business license revocation. Companies registered before October 2025 that assumed the old enforcement environment still applies are finding out that it does not.
Annual Tax Obligations
The PT PMA must file annual corporate income tax returns (SPT Tahunan) with the Directorate General of Taxes. Monthly obligations include VAT reporting for registered VAT entities and withholding tax submissions. Payroll tax must be withheld and remitted monthly for all employees, local and foreign.
Annual General Meeting (RUPS)
Indonesian company law requires at least one Annual General Meeting per year, within six months of the financial year end. Resolutions and attendance must be documented in minutes. A notary must be present if the meeting involves structural company changes.
BPJS Registration for Employees
Companies employing staff in Indonesia must register all employees with BPJS Ketenagakerjaan (employment social security) and BPJS Kesehatan (health coverage). This applies to both Indonesian nationals and foreigners on a work KITAS. Both employer and employee contribute monthly.
Compliance deadlines are easy to miss. Missed ones are expensive.
InvestinAsia handles LKPM filing, NPWP setup, BPJS registration, and quarterly reporting for PT PMA companies — with 18+ years of experience navigating Indonesian compliance.
Mistakes That Delay Registrations (and How to Avoid Them)
These are not edge cases. They appear in a large share of PT PMA applications that stall, each adding weeks or months to the timeline.
Picking a KBLI Code That Is Too Broad
Using a general industry category instead of the precise five-digit code for your activity is the most consistent source of problems. OSS-RBA checks KBLI codes against the Positive Investment List automatically — mismatches stall the application. With KBLI 2025 now active for new registrations, using old 2020 codes creates the same friction. Verify your exact code against the current 2025 list before filing anything.
Treating the Two Capital Figures as One
The IDR 2.5 billion paid-up capital (what you deposit) and the IDR 10 billion total investment plan (what you commit to spend over time) are different figures with different legal functions. Treating them as the same number produces incorrect capital declarations in the Deed of Establishment, which then requires a notarial amendment to fix — and amendments take time.
Assuming the Capital Reduction Lowers the KITAS Threshold
BKPM Regulation No. 5/2025 changed the paid-up capital requirement. It did not change the immigration rules for Investor KITAS eligibility. Investors who structured their share ownership around the new lower capital number and planned their visa on that basis may find they no longer meet the IDR 10 billion personal share ownership threshold required by the Directorate General of Immigration. Two different agencies, two different laws.
Ignoring LKPM After Incorporation
PT PMA companies file LKPM reports quarterly. Under the 2025 BKPM regulation, enforcement is stricter than it was before. Set up a compliance calendar before you file your first report. LKPM is not a bureaucratic formality — it is a quarterly legal obligation with a business license revocation consequence for repeat failures.
How Long Does the Full Process Take?
For a well-prepared applicant with all documents ready and no sector-specific license complications, PT PMA registration takes around four to six weeks from name reservation to NIB issuance. Sector-specific licenses add time depending on the ministry and risk classification. Bank account opening adds one to four weeks. An Investor KITAS application typically takes three to six weeks after the company is registered and capitalized.
The main delay factors are document gaps, KBLI mismatches caught at the OSS stage, and varying bank timelines for verifying foreign directors. All three are avoidable with proper preparation before you start.
Compliance deadlines are easy to miss. Missed ones are expensive.
InvestinAsia handles LKPM filing, NPWP setup, BPJS registration, and quarterly reporting for PT PMA companies — with 18+ years of experience navigating Indonesian compliance.
Frequently Asked Questions
Can a single foreign individual start a PT PMA alone?
No. A PT PMA requires at least two shareholders. Both can be foreign individuals, or one can be a corporate entity. A single individual cannot be the only shareholder.
Does the capital reduction to IDR 2.5 billion mean the total investment requirement also changed?
No. The minimum paid-up capital dropped to IDR 2.5 billion under BKPM Regulation No. 5/2025. The total investment plan requirement — more than IDR 10 billion per five-digit KBLI code — stayed the same. These are two separate figures with different legal definitions and different functions.
Can a foreigner register a PT PMA without living in Indonesia?
Yes. Registration can be completed entirely remotely through OSS, with a local notary and authorized representative handling filings on your behalf. However, foreign directors acting as signatories for corporate bank accounts need a valid KITAS at the time of account opening. Some investors appoint an Indonesian director for banking purposes while managing the business from overseas.
Can I use a virtual office as my PT PMA’s business address?
For most business activities, yes. A virtual office is accepted under OSS-RBA as a PT PMA domicile address, provided the provider holds a valid SKDP. Regulated sectors — financial services, healthcare, and certain manufacturing activities — require a physical premises verified by the relevant sectoral authority. Check the requirement for your specific KBLI code before committing to an address solution.
What happens if I operate commercially before the PT PMA is registered?
Operating commercial business activities without a valid NIB and applicable sector license exposes you to administrative penalties and potential forced business closure under Law No. 6 of 2023. This applies equally to informal arrangements through nominees, which are prohibited under Indonesian law and unenforceable in Indonesian courts.
How do I check whether my sector allows 100% foreign ownership?
Cross-reference your five-digit KBLI code against the Positive Investment List (Presidential Regulation No. 10 of 2021, as amended by Presidential Regulation No. 49 of 2021). If your code does not appear in the restricted or closed sector lists, 100% ownership is available. OSS-RBA also validates ownership eligibility during registration based on your KBLI code selection.
References
1. BKPM Regulation No. 5 of 2025 (Peraturan Menteri Investasi dan Hilirisasi / Kepala BKPM Nomor 5 Tahun 2025)
https://oss.go.id
2. Presidential Regulation No. 10 of 2021 on the Positive Investment List, as amended by Presidential Regulation No. 49 of 2021
https://jdih.setneg.go.id
3. Law No. 6 of 2023 on the Stipulation of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation
https://peraturan.bpk.go.id
4. Government Regulation No. 28 of 2025 on Risk-Based Business Licensing
https://oss.go.id
5. OSS-RBA — Indonesia’s investment and licensing portal
https://oss.go.id
