PT PMA Requirements: A Guide for Foreign Investors Entering Indonesia

What Is a PT PMA?

PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the standard corporate vehicle for foreign investment in Indonesia. It is a limited liability company with at least partial foreign ownership, governed by Law No. 40 of 2007 on Limited Liability Companies and regulated under the investment framework administered by the Indonesian Investment Coordinating Board (BKPI). Foreign investors who wish to operate commercially in Indonesia — as opposed to through a representative office or liaison office, which are more limited in function — are generally required to establish a PT PMA.

Minimum Capital Requirements

The general minimum investment requirement for a PT PMA is IDR 10 billion (approximately USD 620,000 at current exchange rates) per business line. This is the total investment commitment, not the paid-up capital, which has a lower minimum threshold. The paid-up capital requirement is IDR 2.5 billion, which must be deposited into the company's bank account and evidenced for regulatory purposes.

These are the general minimums. Sector-specific regulations frequently impose higher thresholds — particularly in financial services, healthcare, and infrastructure sectors. Some sectors also require the investment to be fully paid up at the time of incorporation rather than over time.

Shareholder and Director Requirements

A PT PMA must have at least two shareholders, at least one of whom may be a foreign legal entity or individual. There is no requirement for an Indonesian co-shareholder in most sectors — though the applicable foreign ownership cap under the Positive Investment List determines the maximum percentage that can be held by foreign parties.

The board of directors (Direksi) must include at least one director. At least one member of the Board of Commissioners (Dewan Komisaris) is required. There is no nationality requirement for directors or commissioners at the company law level, though certain regulated sectors impose local nationality requirements on key positions. Directors who are foreign nationals working in Indonesia must obtain a Working Permit (KITAS/Izin Tinggal Terbatas) issued through the immigration authority.

The Incorporation Process

Incorporation of a PT PMA follows a sequential process. The Articles of Association are drafted and executed before a licensed Indonesian notary, who submits the deed to the Ministry of Law and Human Rights (Kemenkumham) for legal entity status approval. Once legal entity status is obtained, the company registers through the OSS system to obtain its Business Identification Number (NIB) and applicable initial licenses.

For PT PMA specifically, the process includes investment realization reporting to BKPI at regular intervals. Failure to submit realization reports is a compliance violation that can affect the company's good standing and its ability to renew licenses or obtain additional permits.

The full incorporation timeline — from notarial deed execution through to NIB issuance and receipt of the first operating license — typically ranges from 4 to 8 weeks for straightforward cases, and longer for regulated sectors requiring sector authority approval before the OSS license becomes effective.

Representative Office vs. PT PMA

Foreign companies sometimes consider a Representative Office (Kantor Perwakilan Perusahaan Asing, KPPA) as an alternative to full PT PMA incorporation, particularly for initial market exploration. A representative office may conduct market research, liaise with local partners, and promote the parent company's products or services, but may not conduct direct commercial transactions, invoice Indonesian customers, or generate revenue in Indonesia. If the intended activity includes any form of direct business operation, the representative office structure is insufficient and a PT PMA is required.