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.
What is a 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)
Business Sectors of PMA
After knowing about PMA company meaning, now we’ll talk about it’s business sectors. When talking about PMA companies, there are many niches that they can get into, such as cuisine and fashion. However, to be more precise, a PMA company in Indonesia can engage with the following categories of business sectors:
In this category, foreigners can have 100% control of the company. As such, there are no specialized regulations to open the company. This category covers several niches such as cafes, bars, restaurants, football fields, swimming pools, sports centers, and tennis courts.
Open with a condition
While foreign companies in this category can invite international investors, their foundations are subject to specific regulations. For instance, the total number of shares of foreign capital in the company must abide by industry trends.
In this regard, foreign capital may have an average share of 49% or 51%, although some industries in this category can have a total foreign capital of 67% to 70%. The most common niches in this category are mining and energy companies, hotel franchises, and sports facilities.
In this category, foreigners are not allowed to have their private enterprise in this business category. The reason is that this category is the most politically sensitive sector out of the three, such as companies involved in strategic affairs and state security, such as weapons manufacturers.
While some degree of involvement of foreigners is allowed in the sector, ultimately only local Indonesians are allowed to have a say in determining the sector’s progression. Under the government’s regulations, this category also covers tour and travel companies since 2016.
Regulation for PMA Companies in Indonesia
Legally speaking, the act of establishing a PMA company in Indonesia is originally regulated based on Law No. 40/2007 regarding Limited Liability Companies (Company Law). When referring to the company’s definition in Indonesia, its definition (like we have mentioned above) is regulated under Law No. 25/2007 regarding Investment (New Investment Law).
However, in recent years, thanks to the initiatives of the President of Indonesia Joko Widodo, establishing PMA companies has been made easier thanks to the enactment of Presidential Regulation No. 10 of 2021 on the Investment Business Sector.
Requirements for PMA Companies in Indonesia
Now you know about what is PMA company. But, what exactly are the PT PMA requirements?
Before establishing their own PMA companies, foreigners need to prepare the following to make sure that their registration process is an easy one:
- Personal documents (ID cards/passports and a filled company registration form along with the required documents).
- Company address (for information on the Registered Company Domicile).
How to Establish a PMA?
Now, how can foreigners set up a PMA company in Indonesia? In doing so, foreigners can contact trusted Indonesian services that usually offer assistance for foreigners in establishing a PMA company in Indonesia.
As the demand for establishing more PMA companies only increases over the years, it is only natural that Indonesian business solutions are becoming more and more popular for foreigners intending to expand their business in the country.
Each trusted business solution in Indonesia is already experienced in helping foreigners to establish a PMA company in the country, so foreigners are expected to fully pay attention to the services provided by these business solutions to ensure the success of their business establishment.
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.
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.
Not only that, InvestinAsia also provides Indonesian business visa services for you.
So, what are you waiting for? Contact us now for further informations!