Key Takeaways:
- PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign-owned limited liability company in Indonesia, legally established under Law No. 25 of 2007 on Investment and regulated by the Indonesia Investment Coordinating Board (BKPM).
- This company type allows foreign investors to conduct business and generate revenue directly in Indonesia, rather than through local subsidiaries.
- A PT PMA can be fully or partially foreign-owned, depending on the business sector. In open sectors, foreign investors may hold up to 100% ownership, while other sectors impose specific shareholding limits to maintain local participation.
Thanks to Indonesia’s growing population, abundant resources, eagerness to accept foreign companies to set up shop, and steadily easier regulations to open up a business, foreign companies all over the world are becoming keener to set up what is essentially known as a PMA company in Indonesia.
However, before setting up this kind of company, foreigners need to know what is PMA meaning in business, the intricacies and regulations of founding one in the country.
Also read: How to Check Company Details in Indonesia: A Complete Guide
What is a PT PMA Company in Indonesia?
So, what is the meaning of a PMA company? To put it simply, a PMA company in Indonesia means a Foreign-Owned Company (Perusahaan Milik Asing). Also known as PT PMA (Perseroan Terbatas Penanaman Modal Asing), this company is allowed to operate in Indonesia based on a legal basis as dictated by Indonesian law.
Through this company, foreign investors in Indonesia can choose to gain profit or revenue directly from the PMA company instead of through their subsidiaries in the country. (read the details about PMA Company advantages)
Also read: The Types of Companies in Indonesia: A Complete Guide
Why PT PMA Exists
The Indonesian government introduced the PT PMA structure to attract foreign capital, promote economic growth, and ensure regulatory transparency for overseas investors.
With Indonesia’s expanding population, abundant resources, and investment-friendly regulations, the PT PMA has become the main vehicle for foreigners seeking to establish a legal and compliant business presence in the country.
Business Sectors of PMA
The sectors available for PT PMA companies are defined in the Positive Investment List (Presidential Regulation No. 10 of 2021). These are divided into three main categories:
Open Sectors
Foreign investors can own 100% of company shares.
Common industries include:
- Food and beverage businesses (restaurants, cafés, bars)
- Sports and leisure facilities (football fields, gyms, tennis courts)
- Entertainment and recreation centers
Open with Conditions
These sectors are open to foreign investors but subject to ownership limitations.
Foreign shareholding is typically restricted to 49%–70%, depending on the industry.
Examples include:
- Mining and energy companies
- Hotel franchises and hospitality ventures
- Infrastructure and logistics operations
Closed Sectors
Certain strategic sectors are restricted from foreign ownership to protect national security or cultural interests.
Examples include:
- Defense industries (e.g., weapons or explosives manufacturing)
- Public transportation operations
- Tour and travel agencies (since 2016 regulations)
Also read: 7 Reasons and Advantages for Starting a Business in Indonesia
Legal Regulations Governing PT PMA Companies
PT PMA establishment and operation are guided by several key regulations:
| Regulation | Description |
|---|---|
| Law No. 25 of 2007 | Governs domestic and foreign investment principles in Indonesia. |
| Law No. 40 of 2007 | Defines Limited Liability Companies (PT) structure and requirements. |
| Presidential Regulation No. 10 of 2021 | Specifies the sectors open or restricted for foreign investment (Positive Investment List). |
| BKPM Guidelines | Detail licensing, shareholding, and operational compliance for PT PMA entities. |
Recent reforms under President Joko Widodo’s administration have simplified the investment process through Online Single Submission (OSS), allowing faster digital company registration and licensing.
Also read: What is Perseroan Terbatas (PT) in Indonesia?
Advantages of a PT PMA Company
Below are some of the advantages of establishing a PT PMA for foreign investors:
- Direct Ownership: Foreign investors can legally own up to 100% of shares in open sectors.
- Profit Repatriation: Investors can transfer profits abroad in compliance with Indonesian regulations.
- Business Credibility: Recognized as a legitimate legal entity under Indonesian corporate law.
- Access to Local Market: Enables participation in Indonesia’s domestic and export markets.
- Legal Protection: Operates under Indonesia’s transparent investment and tax systems.
Key Differences Between PT PMA and Local PT
| Criteria | PT PMA | PT Local |
|---|---|---|
| Ownership | Foreign (partial or full) | 100% Indonesian |
| Regulation | Law No. 25/2007 & BKPM oversight | Law No. 40/2007 |
| Capital Requirement | ≥ IDR 10 billion | Lower (as defined by local regulation) |
| Profit Repatriation | Allowed under law | Domestic only |
| Eligible Investors | Foreign individuals/entities | Indonesian citizens/entities |
Requirements for Establishing a PT PMA
Before establishing a PT PMA in Indonesia, foreign investors must prepare the following:
Minimum Investment Capital
At least IDR 10 billion (approximately USD 700,000) in total investment. A portion of this capital must be deposited into the company’s bank account once incorporation is approved.
A minimum of two shareholders (either individuals or legal entities). The company must also appoint a Director and a Commissioner.
Registered Business Address
A legitimate business domicile in Indonesia is required for registration.
Legal Documentation
- Valid passport or ID copies of shareholders
- Company deed of establishment (Akta Pendirian)
- Capital Statement Letter
- Tax Identification Number (NPWP)
Also read: PMA (Foreign Company) Taxation in Indonesia
How to Establish a PT PMA in Indonesia
Foreign investors can establish a PT PMA by following these steps:
Business Consultation & Name Reservation
Identify the appropriate business classification (KBLI code) and reserve a company name.
Legal Documentation & Capital Statement
Draft the company deed and capital verification documents with a local notary.
BKPM Submission & OSS Registration
Apply for approval through the Online Single Submission (OSS) system, managed by BKPM.
Tax Registration & Licensing
Obtain a Tax Identification Number (NPWP) and business operational licenses.
Bank Account & Capital Deposit
Deposit the required initial investment into the PT PMA’s corporate account.
Also read: How to Set Up PMA Company in Indonesia: Guide for Foreigner
While establishing a PMA company in Indonesia is becoming easier than before, foreigners are still expected to fully abide by the regulations to make the process a success. That’s where InvestInAsia comes in. With decades of experience in assisting foreign individuals and companies, InvestInAsia has been a trusted solution in the industry.
Check out our complete services for Indonesia PT PMA Company Registration.
Not only that, we also also provides PT PMA+KITAS Special Package for you.
So, what are you waiting for? Contact us now for further informations!
Other Things about PMA Companies in Indonesia
What are the capital requirements for PMA?
When trying to establish a PMA company, foreigners need to have at least prepared over IDR 10 billion (USD 700,000) as Indonesian PMA’s minimum capital amount for incorporating the company. The first investment from this total amount of capital needs to be transferred to the established PMA’s bank account once the registration process is completed and the Capital Statement Letter is issued.
Who can establish PT PMA?
Equally important is having a minimum of two shareholders that include a CEO and a Commissioner from individuals or legal entities. A PMA company can only be stated as a legal company when they already have a minimum of two shareholders during the establishment of the company.
Also read: How to Register a Company in Indonesia: Guide for Foreigner
Summary
A PT PMA in Indonesia is a foreign-owned limited liability company designed to enable overseas investors to legally operate and generate income in the country.
It is governed by Law No. 25/2007, regulated by BKPM, and structured to ensure compliance, transparency, and equal opportunity in the investment process.
With simplified registration via the OSS system and an expanding list of open sectors, establishing a PT PMA has become the most effective way for foreign businesses to participate in Indonesia’s fast-growing economy.
