{"id":16363,"date":"2025-09-08T15:09:14","date_gmt":"2025-09-08T08:09:14","guid":{"rendered":"https:\/\/investinasia.id\/blog\/?p=16363"},"modified":"2025-10-20T13:55:28","modified_gmt":"2025-10-20T06:55:28","slug":"what-is-considered-a-foreign-company-in-indonesia","status":"publish","type":"post","link":"https:\/\/investinasia.id\/blog\/what-is-considered-a-foreign-company-in-indonesia\/","title":{"rendered":"What Is Considered a Foreign Company in Indonesia?"},"content":{"rendered":"<p>In Indonesia, a company is classified as foreign-owned if foreign investors hold as little as 1% of its shares. This broad definition ensures that any participation of foreign capital, no matter how small, automatically subjects the entity to Indonesia\u2019s foreign investment regulations.<\/p>\n<h2>Legal Structure of Foreign Companies<\/h2>\n<figure id=\"attachment_15528\" aria-describedby=\"caption-attachment-15528\" style=\"width: 735px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"size-full wp-image-15528\" src=\"http:\/\/investinasia.id\/blog\/wp-content\/uploads\/2025\/06\/company-indonesia.webp\" alt=\"What Is Considered a Foreign Company in Indonesia?\" width=\"735\" height=\"490\" srcset=\"https:\/\/investinasia.id\/blog\/wp-content\/uploads\/2025\/06\/company-indonesia.webp 735w, https:\/\/investinasia.id\/blog\/wp-content\/uploads\/2025\/06\/company-indonesia-300x200.webp 300w\" sizes=\"(max-width: 735px) 100vw, 735px\" \/><figcaption id=\"caption-attachment-15528\" class=\"wp-caption-text\">What Is Considered a Foreign Company in Indonesia? (pexels.com)<\/figcaption><\/figure>\n<p>The primary vehicle for foreign investment is the <a href=\"https:\/\/investinasia.id\/blog\/what-is-a-pma-company\/\">PT PMA (Foreign Investment Limited Liability Company)<\/a>. Under Law No. 25\/2007 (Investment Law) and Law No. 40\/2007 (Company Law), any company with foreign shareholders must establish itself as a PT PMA. This entity is recognized as a limited liability company and allows foreign investors to operate legally within Indonesia.<\/p>\n<p><strong>Also read:<\/strong> <strong><a href=\"https:\/\/investinasia.id\/blog\/types-of-companies-in-indonesia\/\">The Types of Companies and Business Entities in Indonesia<\/a><\/strong><\/p>\n<h2>Capital Requirements<\/h2>\n<p>Foreign companies must meet minimum capital requirement that are more stringent than those for local companies.<\/p>\n<p><strong>Minimum investment plan<\/strong>: IDR 10 billion (\u2248 USD 700,000), excluding land and buildings.<\/p>\n<p><span style=\"font-size: 1rem;\">This requirement ensure that foreign companies contribute significantly to Indonesia\u2019s economy.<\/span><\/p>\n<p><strong>Also read:<\/strong> <strong><a href=\"https:\/\/investinasia.id\/blog\/the-minimum-capital-for-pma\/\">The Minimum Capital for Establishing PMA Company in Indonesia<\/a><\/strong><\/p>\n<h2>Industry Restrictions<\/h2>\n<p>The level of foreign ownership permitted is determined by the Investment List (previously known as the <a href=\"https:\/\/investinasia.id\/blog\/indonesia-negative-investment-list-dni\/\">Negative Investment List<\/a>). Business sectors fall into three categories:<\/p>\n<ul>\n<li><strong>Fully open<\/strong>: 100% foreign ownership permitted.<\/li>\n<li><strong>Partially open<\/strong>: capped foreign ownership (e.g., joint ventures).<\/li>\n<li><strong>Closed sectors<\/strong>: no foreign ownership allowed.<\/li>\n<\/ul>\n<p><strong>Also read:<\/strong> <strong><a href=\"https:\/\/investinasia.id\/blog\/what-fields-can-a-pma-company-operate-in-indonesia\/\">What Fields Can a PMA Company Operate in Indonesia?<\/a><\/strong><\/p>\n<h2>Alternative Foreign Business Entity<\/h2>\n<figure id=\"attachment_14245\" aria-describedby=\"caption-attachment-14245\" style=\"width: 735px\" class=\"wp-caption aligncenter\"><img decoding=\"async\" class=\"size-full wp-image-14245\" src=\"http:\/\/investinasia.id\/blog\/wp-content\/uploads\/2024\/12\/business-structure-in-indonesia.jpg\" alt=\"What Is Considered a Foreign Company in Indonesia? (source:pexels)\" width=\"735\" height=\"414\" srcset=\"https:\/\/investinasia.id\/blog\/wp-content\/uploads\/2024\/12\/business-structure-in-indonesia.jpg 735w, https:\/\/investinasia.id\/blog\/wp-content\/uploads\/2024\/12\/business-structure-in-indonesia-300x169.jpg 300w\" sizes=\"(max-width: 735px) 100vw, 735px\" \/><figcaption id=\"caption-attachment-14245\" class=\"wp-caption-text\">What Is Considered a Foreign Company in Indonesia? (source:pexels)<\/figcaption><\/figure>\n<p>Besides PT PMAs, foreign investors may choose Representative Offices (KPPA).<\/p>\n<p>These offices allow market research, promotion, and coordination but cannot engage in commercial transactions or generate revenue.<\/p>\n<p><strong>Also read:<\/strong> <strong><a href=\"https:\/\/investinasia.id\/blog\/activities-allowed-for-foreign-representative-offices-indonesia\/\">Business Activities Allowed for Foreign Representative Offices in Indonesia<\/a><\/strong><\/p>\n<h2>Compliance and Licensing<\/h2>\n<p>All foreign-owned businesses must register with the <a href=\"https:\/\/investinasia.id\/blog\/what-is-bkpm-indonesia\/\">Indonesian Investment Coordinating Board (BKPM)<\/a> and obtain licenses through the <a href=\"https:\/\/investinasia.id\/blog\/what-is-oss-in-indonesia\/\">Online Single Submission (OSS) system<\/a>. Companies must adhere to capital, ownership, and industry-specific regulations.<\/p>\n<p><strong>Also read: <a href=\"https:\/\/investinasia.id\/blog\/risks-of-running-a-business-in-indonesia-without-the-right-permits\/\">What Happens If You Operate a Business in Indonesia Without a Proper License?<\/a><\/strong><\/p>\n<h2>Why This Matters for Investors<\/h2>\n<p>For international investors, understanding what qualifies as a foreign company in Indonesia is crucial. Even small-scale foreign participation triggers regulatory requirements, making proper structuring essential to avoid compliance risks and business interruptions.<\/p>\n<h2>Smooth Path to Market Entry<\/h2>\n<p>Navigating Indonesia\u2019s regulations can be complex. This is where professional support makes a difference.<\/p>\n<p>InvestinAsia will assist you with <strong><a href=\"https:\/\/investinasia.id\/services\/pma-registration\">PT PMA registration services<\/a><\/strong> that meet legal requirements and support long-term growth. For companies exploring opportunities without direct commercial operations, We also provides <strong><a href=\"https:\/\/investinasia.id\/services\/representative-office\">Representative Office setup services<\/a><\/strong> tailored to market research and liaison activities.<\/p>\n<p>You can also enjoy <strong><a href=\"https:\/\/investinasia.id\/services\/pt-pma-kitas\">special package prices for PT PMA and KITAS services<\/a><\/strong>.<\/p>\n<p>With expert guidance, investors can enter Indonesia\u2019s market with clarity and confidence.<\/p>\n<p>Ready to start your business and investment in Indonesia? <strong><a href=\"https:\/\/wa.me\/6281295665565?text=Hello!%20I%20have%20a%20question%20about%20https:\/\/investinasia.id\/,%20I%20know%20from%20Google%20(SEO)\" target=\"_blank\" rel=\"noopener\">Chat with us now for FREE consultation!<\/a><\/strong><\/p>\n<p>&nbsp;<\/p>\n<h2>FAQs<\/h2>\n<h3><strong>What qualifies as a foreign company in Indonesia?<\/strong><\/h3>\n<p>Any business with foreign shareholding, even at 1%, falls under the category of foreign-owned companies.<\/p>\n<h3><strong>What is a PT PMA?<\/strong><\/h3>\n<p>A PT PMA (Foreign Investment Limited Liability Company) is the legal structure required for foreign-owned companies in Indonesia.<\/p>\n<h3><strong>Can a foreign company be 100% foreign-owned?<\/strong><\/h3>\n<p>Full foreign ownership is only possible in industries completely open to foreign investment under the Investment List. Check the details here: <a href=\"https:\/\/investinasia.id\/blog\/can-a-foreigner-own-of-a-business-in-indonesia\/\">Can a Foreigner Own 100% of a Business in Indonesia?<\/a><\/p>\n<h3><strong>What is the minimum capital for a PT PMA?<\/strong><\/h3>\n<p>The required minimum investment commitment is IDR 10 billion.<\/p>\n<h3><strong>Can a representative office earn revenue?<\/strong><\/h3>\n<p>No, representative offices are limited to research, promotion, and coordination, not commercial transactions.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In Indonesia, a company is classified as foreign-owned if foreign investors hold as little as 1% of its shares. This broad definition ensures that any participation of foreign capital, no &hellip; <\/p>\n","protected":false},"author":1,"featured_media":16364,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[15],"tags":[77],"class_list":["post-16363","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-investment","tag-legal-reviewed"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Is Considered a Foreign Company in Indonesia? | InvestinAsia<\/title>\n<meta name=\"description\" content=\"Learn what qualifies as a foreign company in Indonesia, PT PMA rules, capital requirements, and representative office options.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/investinasia.id\/blog\/what-is-considered-a-foreign-company-in-indonesia\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is Considered a Foreign Company in Indonesia? | InvestinAsia\" \/>\n<meta property=\"og:description\" content=\"Learn what qualifies as a foreign company in Indonesia, PT PMA rules, capital requirements, and representative office options.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/investinasia.id\/blog\/what-is-considered-a-foreign-company-in-indonesia\/\" \/>\n<meta property=\"og:site_name\" content=\"Blog - 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