Key Takeaways<\/p>\n
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- A PT PMA can be registered under KBLI 64200 to legally function as a holding company for shares in other Indonesian entities, low-risk under OSS-RBA, but still bound by the same capital and shareholder rules as any PT PMA.<\/li>\n
- Holding shares in your own group’s companies does not require an OJK license. That license is only triggered if the entity actively manages securities or funds for third-party clients.<\/li>\n
- Dividends paid from an Indonesian subsidiary to an Indonesian parent PT are excluded from income tax entirely, with no reinvestment condition, under Article 4(3)(f) of the Income Tax Law. Tax is only triggered when the money is eventually paid out to a non-resident shareholder.<\/li>\n<\/ul>\n<\/div>\n
What Does “Holding Company” Actually Mean Under Indonesian Business Classification?<\/h2>\n
![\"Can](\"http:\/\/investinasia.id\/blog\/wp-content\/uploads\/2024\/12\/open-pt-company-in-indonesia-1200x800.jpg\")
Can a PT PMA Be Used as a Holding Company in Indonesia? (source:pexels)<\/figcaption><\/figure>\n Under Indonesia’s business classification system, a holding company<\/a> is registered specifically under KBLI 64200, a code covering entities whose main activity is owning and controlling the assets of a group of subsidiaries, without directly running the subsidiaries’ own operations. It can include advisory work around mergers and acquisitions for the group, but it is not supposed to provide operational services to companies outside that group. Under PP 28\/2025, the current risk-based licensing framework, this activity generally sits in a low-risk tier, meaning a Nomor Induk Berusaha (NIB) issued through OSS is usually sufficient without extra sector-specific permits, unless the holding company adds other higher-risk activities to its registration.<\/p>\n
Can a Foreign Investor Register a PT PMA That Only Holds Shares?<\/h2>\n
Yes, and this is where the misconception starts. Investors sometimes assume a pure holding entity should face lighter capital and structuring requirements than an operating company, since it has no staff, no office lease, and no revenue-generating activity of its own. That is not how it works. Indonesian Company Law No. 40 of 2007 requires at least two shareholders regardless of what the company does, and a PT PMA holding company is still bound by the standard capital rules under BKPM Regulation No. 5 of 2025: IDR 2.5 billion in paid-up capital<\/a>, deposited into an Indonesian bank account, alongside a total investment plan generally expected to exceed IDR 10 billion per KBLI code.<\/p>\n
That second figure is the part I’d flag rather than state as settled. The IDR 10 billion investment threshold is straightforward to apply to a manufacturer or a restaurant chain, activities with tangible investment plans, but I have not found authoritative guidance on how it is meant to be evaluated for an entity whose only “activity” is owning shares. In practice, this is usually resolved case by case with the notary and OSS filing, often by counting the value of the subsidiary shareholding itself toward the investment plan. Confirm this directly with BKPM or a licensed consultant before finalizing the structure, since I cannot verify a single official formula for it.<\/p>\n
I also was not able to confirm KBLI 64200’s exact status on the Positive Investment List, whether it is fully open to 100% foreign ownership or carries a specific condition. Sources agree it is a recognized, low-risk classification, but none stated its foreign equity ceiling explicitly. Check this against the current OSS system or with a licensed advisor before registering, rather than assuming full openness.<\/p>\n
\nNot Sure If a Holding PT PMA Fits Your Group Structure?<\/p>\n
InvestinAsia’s 380+ specialists can confirm KBLI 64200 eligibility, capital treatment, and shareholder structure against your specific case before you file anything with OSS.<\/p>\n
Discuss PT PMA Structuring<\/a><\/div>\n<\/div>\nor chat with our team on WhatsApp<\/a><\/div>\n<\/div>\nDo You Need an OJK License to Run a Holding Company in Indonesia?<\/h2>\n
Generally, no, and this is a common point of confusion. Indonesia’s Financial Services Authority (OJK) requires a license for a “Perusahaan Efek”, an entity acting as a broker-dealer, securities underwriter, or investment manager handling money or portfolios on behalf of third-party clients. A company that simply owns and controls shares in its own group of subsidiaries, without managing securities or funds for outside investors, falls outside that licensing requirement. The distinction that matters is whose money is being managed. If a holding company starts actively trading securities for clients, running a fund, or offering investment advisory services to people outside its own group, it crosses into OJK-regulated territory and needs the corresponding license. Holding your own subsidiaries’ shares does not.<\/p>\n
What’s the Tax Advantage of Holding Through a Domestic PT?<\/h2>\n
This is the part most explainers on Indonesian holding companies skip, and it is the strongest argument for a domestic holding layer in certain group structures. Under Article 4(3)(f) of the Income Tax Law, as amended by the Job Creation Law and Harmonization of Tax Regulations Law, dividends paid by one Indonesian company to another Indonesian corporate taxpayer are excluded from income tax entirely, no reinvestment requirement attached. This is different from the rule for dividends received by an individual (resident or not), where reinvestment conditions under PMK-18\/2021 do apply to unlock the exemption.<\/p>\n
In practical terms: if a foreign investor owns several Indonesian PT PMA operating companies through one Indonesian PT holding company, dividends flowing from each operating subsidiary up to that domestic holding company are not taxed at all at that step. Tax only becomes relevant when the holding company eventually distributes profit out to its actual foreign shareholder, at which point the standard non-resident withholding tax applies, 20% by default or a reduced treaty rate if the shareholder qualifies under one. In other words, a domestic holding layer does not eliminate withholding tax on ultimate profit repatriation to a foreign owner, but it does let a group consolidate and reposition profit across multiple Indonesian subsidiaries without a tax cost at each intermediate step, something a direct multi-entity ownership structure without a domestic holding layer cannot do.<\/p>\n
\nNotes from InvestinAsia Consultants<\/p>\n
Investors often assume the domestic dividend exemption is automatic and requires no paperwork. It generally does not require reinvestment for a corporate recipient, but the distributing company still needs to record the payment correctly and the receiving PT still needs to reflect it properly in its own tax return. “No reinvestment required” is not the same as “no reporting required.”<\/p>\n<\/div>\n
\nStructuring Dividend Flow Across Multiple Indonesian Subsidiaries?<\/p>\n
Our tax compliance team, active in Jakarta and Bali, can confirm how the domestic dividend exemption applies to your group and document it correctly with the DGT.<\/p>\n
View Tax Compliance Services<\/a><\/div>\n<\/div>\nor chat with our team on WhatsApp<\/a><\/div>\n<\/div>\nOnshore Holding vs. Offshore Holding: When Does Each One Make Sense?<\/h2>\n
A domestic PT holding company and an offshore holding company<\/a> (typically Singapore) solve different problems, and larger groups sometimes use both together rather than choosing one. A domestic holding PT is the better fit for consolidating multiple Indonesian operating subsidiaries under one Indonesian umbrella, since it captures the Article 4(3) dividend exemption at each intermediate step and keeps the whole structure inside Indonesian jurisdiction with no beneficial ownership or treaty-shopping scrutiny to manage. It does not, on its own, reduce the withholding tax rate on profit eventually paid out to a foreign individual or foreign company. That is what a Singapore holding layer is for, since it can access the Indonesia-Singapore tax treaty’s<\/a> reduced dividend withholding rate on that final leg of the payment.<\/p>\n
A group running three Indonesian operating subsidiaries under one domestic PT holding company, which is in turn owned by a Singapore entity, is a common combination for larger investors: the domestic layer consolidates profit across subsidiaries tax-free, and the offshore layer reduces the rate on the final distribution to the ultimate foreign owner. For a single PT PMA with no plans to add further Indonesian subsidiaries, a holding layer of either kind is usually unnecessary complexity rather than a saving.<\/p>\n
Frequently Asked Questions<\/h2>\n
Does a holding PT PMA need its own office and staff in Indonesia?<\/h3>\n
There is no specific staffing minimum stated in the regulations I reviewed for a domestic holding company, unlike the substance expectations placed on offshore treaty-claiming entities. That said, a registered address and basic operational presence are still needed to satisfy standard PT PMA administrative requirements such as banking and licensing.<\/p>\n
Can one PT PMA hold shares in another PT PMA?<\/h3>\n
Yes, an Indonesian company, including a PT PMA registered as a holding entity, can be a shareholder in another PT PMA, subject to the target company’s own foreign ownership rules under the Positive Investment List.<\/p>\n
Is the domestic dividend tax exemption automatic, or do I need to apply for it?<\/h3>\n
For a domestic corporate recipient, the exclusion from income tax applies without a reinvestment requirement, but this is my understanding based on the Income Tax Law provisions and related guidance, not a substitute for confirming your specific filing treatment with a tax professional or the DGT directly.<\/p>\n
Does using a holding company reduce the total capital I need to invest?<\/h3>\n
No. Each PT PMA in the chain, the holding company and each operating subsidiary, generally needs to meet its own paid-up capital and investment plan requirements separately. A holding layer adds a structure; it does not consolidate or reduce the underlying capital obligations.<\/p>\n
<\/p>\n
References<\/strong><\/p>\n
1.<\/strong> Direktorat Jenderal Pajak (DJP). Mau Dividen Bebas Pajak? Segera Lakukan Ini! Retrieved from
\nhttps:\/\/www.pajak.go.id\/en\/node\/65753<\/p>\n2.<\/strong> DDTC News. (2025). Dividen DN dan LN yang Diterima WP Badan Dikecualikan dari Objek PPh. Retrieved from
\nhttps:\/\/news.ddtc.co.id\/berita\/nasional\/1810055\/dividen-dn-dan-ln-yang-diterima-wp-badan-dikecualikan-dari-objek-pph<\/p>\n3.<\/strong> Otoritas Jasa Keuangan (OJK). Perusahaan Efek. Retrieved from
\nhttps:\/\/sikapiuangmu.ojk.go.id\/FrontEnd\/CMS\/Article\/10453<\/p>\n<\/p>\n