Establishing a PMA company in Indonesia offers significant opportunities, but it’s also a process filled with legal and regulatory pitfalls. Many foreign investors underestimate the complexity and make avoidable mistakes that lead to delays, penalties, or even license revocation. Understanding these mistakes upfront—and knowing how to avoid them—can save both time and money.
Insufficient Capital Planning
The most common error is underestimating Indonesia’s capital requirements. A PT PMA requires a minimum investment of IDR 10 billion per KBLI code. Investors who commit less risk tax penalties and restrictions on hiring foreign staff. Treating capital as frozen assets is another misconception—it can be used for operations, but must be properly realized and reported.
Also read: The Minimum Capital for Establishing PMA Company in Indonesia
KBLI Code Missteps
Selecting the wrong KBLI code leads to rejected NIB applications or mismatched licenses. Outdated or unrelated codes can cause unnecessary audits, while ignoring ownership restrictions can leave investors stuck with activities not open to full foreign ownership. Because the OSS system assigns obligations based on KBLI, accuracy here is critical.
Also read: Step-by-Step Guide to Register Your PT PMA in Indonesia 100% Remotely with InvestinAsia
Risky Nominee Arrangements
Nominee shareholder setups are often marketed as shortcuts, but they are illegal under Indonesian law. Courts refuse to enforce nominee agreements, and the government’s 2025 Operation Wira Waspada targeted companies with such arrangements, leading to hundreds of license revocations.
Work Permit and Visa Compliance
Foreign ownership does not grant automatic work rights. Without RPTKA, IMTA, or the right type of KITAS, foreign directors may face deportation or fines. Investor KITAS also requires a minimum IDR 10 billion shareholding, a detail often overlooked by new entrants.
Address and Office Issues
Not all industries can legally use a virtual office. Businesses in medium-high to high-risk categories need physical premises for technical verification. Failure to update business addresses in the OSS system or obtain proper domicile letters can result in blacklisting.
Also read: The Role of Virtual Offices in Speeding Up PMA Registration in Indonesia
Tax and Reporting Neglect
Tax obligations begin from day one, even if the company has no revenue. Missing monthly VAT or withholding reports, skipping annual returns, or failing to enroll employees in BPJS social security are red flags that lead to penalties and audits.
Also read: PMA (Foreign Company) Taxation in Indonesia: Complete Guide
Choosing Weak Service Providers
Many investors are lured by cheap service providers who cut corners. Missing power of attorney, incomplete incorporation, and poor regulatory updates can jeopardize the company’s legal standing. In Indonesia’s evolving business environment, professional guidance is non-negotiable.
Also read: From Paperwork to Profit: How InvestinAsia Simplifies the PT PMA Incorporation Journey
How InvestinAsia Helps You Avoid These Pitfalls
InvestinAsia specializes in Indonesia PMA registration and compliance services tailored for foreign investors. Our team ensures:
- Correct KBLI selection aligned with your real activities.
- Full compliance with capital, licensing, and tax obligations.
- Legally secure structures without risky nominee arrangements.
- Professional handling of visas, KITAS, and work permits.
- Comprehensive support from incorporation to ongoing compliance.
With transparent pricing, realistic timelines, and practical solutions like eligible virtual office setups, InvestinAsia bridges the gap between regulatory complexity and smooth market entry.
If you’re planning to establish a company in Indonesia, partnering with InvestinAsia means avoiding costly missteps and building on a solid legal foundation.
You can also enjoy special package prices for PT PMA and KITAS services.
Contact us now for a FREE consultation and start your investment journey with confidence.
FAQs
What is the minimum capital for a PT PMA in Indonesia?
The minimum requirement is IDR 10 billion, excluding land and building, applied per KBLI code.
No. Nominee arrangements are illegal and unenforceable in Indonesia.
Do I need a physical office?
It depends on your KBLI classification. Medium to high-risk businesses typically require physical premises.
When do tax obligations start?
Immediately after incorporation, even if your company has no revenue.
How long does PMA registration take with InvestinAsia?
On average, around 18 working days for basic incorporation, depending on your sector.
