PT PMA Indonesia How to Set Up a Foreign-owned Company (PT PMA)

Introduction: Why Foreign Investors Choose the PT PMA Structure

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the principal legal vehicle through which foreign investors establish and operate a revenue-generating business in Indonesia. Whether you are a multinational expanding into Southeast Asia, a venture-backed founder launching an Indonesian subsidiary, or an in-house legal team evaluating market-entry structures, the PT PMA Indonesia framework is the gateway to lawful commercial activity from employing local and expatriate staff to invoicing customers and accessing government investment incentives.

Recent regulatory reform has materially altered the practical entry thresholds. BKPM Regulation No. 5/2025 reduced the commonly quoted paid-up capital benchmark from IDR 10 billion to IDR 2.5 billion for many PT PMA formations, although total investment commitment requirements and sector-specific exceptions continue to apply. At the same time, Government Regulation (PP) No. 28/2025 has refined the risk-based licensing framework implemented through Indonesia’s Online Single Submission (OSS) portal, changing timelines and documentary workflows for business licences.

This guide walks through every step required to set up a company in Indonesia as a foreign investor: eligibility requirements, the Positive Investment List, the OSS licensing pathway, capital deposit obligations, costs, timelines, and ongoing compliance. All regulatory claims cite primary government sources, listed in the Sources section at the foot of this page.

Quick Facts: PT PMA Indonesia at a Glance

Before engaging counsel or committing capital, investors should understand the foundational parameters of a PT PMA formation. The bullet points below capture the headline requirements.

• Entity type: Perseroan Terbatas Penanaman Modal Asing (PT PMA) a limited liability company with at least one foreign shareholder.
• Minimum shareholders: Two (individuals or legal entities); no requirement for an Indonesian (WNI) shareholder in sectors where the Positive Investment List permits 100 % foreign ownership.
• Paid-up capital benchmark: IDR 2.5 billion for many business activities under BKPM Regulation No. 5/2025 sector exceptions and total investment commitment thresholds remain relevant.
• Primary regulator: Ministry of Investment / BKPM for investment registration; OSS portal for business licences.
• Typical setup timeline: 4–10 weeks for straightforward corporate formations; 3–6+ months where multiple sector licences, environmental permits, or construction approvals apply.
• Key advantages: Limited liability for shareholders, ability to hire expatriates (IMTA/RPTKA), access to BKPM tax and customs incentives, and the right to earn revenue and repatriate profits.

Step-by-Step PT PMA Formation Process

Setting up a foreign company in Indonesia follows a regulated sequence. Each step has specific documentary requirements and a designated filing channel. The numbered process below reflects the current workflow under BKPM Regulation No. 5/2025 and the OSS risk-based assessment (RBA) regime introduced by PP No. 28/2025.

Step 1 Pre-Check Sector Eligibility Against the Positive Investment List

Identify every business activity you intend to carry out and map it to the correct five-digit KBLI code (Indonesia’s standard industrial classification). Cross-reference each code against the Positive Investment List (Perpres 10/2021) annexes and its amendment Perpres 49/2021 to confirm foreign ownership caps, priority-sector incentives, and any conditions or requirements attached to the activity. Verify KBLI codes using the official BPS KBLI conversion table. Mismatched KBLI codes are one of the most common causes of downstream OSS rejection.

Step 2 Name Reservation and Shareholder Structure

Reserve a company name through the Ministry of Law’s online system (AHU Online). Simultaneously finalise the shareholder structure: determine the ratio of foreign to domestic ownership required (if any) for your chosen KBLI, decide on authorised versus issued share capital, and agree the composition of the Board of Directors and Board of Commissioners. Avoid nominee arrangements they carry significant legal risk under Indonesian law and can render the company’s licences voidable.

Step 3 Draft and Notarise the Deed of Establishment

Engage an Indonesian notary (Notaris) to draft and notarise the Deed of Establishment (Akta Pendirian), including the Articles of Association. The deed must reflect the agreed capital structure, KBLI activities, board composition, and registered address. The notary submits the deed to the Ministry of Law for legal entity registration and obtains a Surat Keputusan (SK) confirming establishment.

Step 4 BKPM Investment Registration and Capital Planning

Prepare and file the investment registration with the Ministry of Investment / BKPM. This filing records the total investment plan the sum of paid-up capital, loan capital, and other investment outlays and triggers the capital monitoring framework. Ensure that the paid-up capital meets the IDR 2.5 billion benchmark (or the higher amount applicable to your sector) as stipulated under BKPM Regulation No. 5/2025, and that the total investment commitment is commercially coherent.

Step 5 OSS Registration and Risk-Based Assessment (RBA) Submission

Register the PT PMA on the OSS portal and submit the Risk-Based Assessment (RBA). Under PP No. 28/2025, each KBLI activity is classified by risk level (low, medium-low, medium-high, or high). The RBA determines which licences are auto-issued and which require verification, inspection, or additional sector-ministry approval. Prepare the electronic RBA narrative, upload supporting documents (corporate deed, KBLI mapping, technical plans), and specify whether the company is in the installation or operational phase.

Step 6 Bank Account Opening and Paid-Up Capital Deposit

Open a corporate bank account in the PT PMA’s name at a licensed Indonesian bank and deposit the paid-up capital. The IDR 2.5 billion benchmark under BKPM Regulation No. 5/2025 represents the common minimum higher thresholds apply in regulated sectors such as banking, insurance, and mining. Retain the bank deposit confirmation slip; it is required for OSS and BKPM compliance reporting. Be aware of holding-period or escrow practices that lenders or regulators may impose in specific sectors.

Step 7 Obtain Business Licences via OSS

Based on the RBA classification, the OSS portal issues the applicable licences Izin Usaha (business licence), Izin Operasional (operational licence), or technical permits. Sector-specific activities (mining, telecommunications, fintech/PSE, healthcare, education) trigger additional approval from the relevant line ministry. Monitor the OSS dashboard for any corrective requests or additional documentary requirements. The OSS licensing process in Indonesia has been refined under PP No. 28/2025 to improve processing speed, but complex multi-licence formations can still span several months.

Step 8 Post-Incorporation Filings and Compliance Setup

Complete the mandatory post-incorporation registrations:

• Tax ID (NPWP): Register with the Directorate General of Taxes for corporate income tax and VAT.
• Social security: Enrol the company with BPJS Ketenagakerjaan and BPJS Kesehatan.
• Manpower registration: File with the local manpower office; obtain foreign worker permits (RPTKA/IMTA) if employing expatriates.
• LKPM reporting: Set up periodic investment activity reporting to BKPM via the OSS/LKPM module.

Document Checklist

Before instructing counsel, prepare the following:

• Shareholder identification: Passport copies (individuals) or certificates of incorporation and board resolutions (corporate shareholders).
• Proposed Articles of Association: Draft or term sheet reflecting capital, KBLI, governance.
• Business plan: Summary of activities, investment budget, staffing plan required for RBA narrative.
• KBLI codes: Confirmed five-digit codes for every intended activity.
• Proof of paid-up capital deposit: Bank confirmation letter or deposit slip.
• Technical permits: Any pre-existing environmental, health, or sector approvals (if applicable).

Common gating points and delays: KBLI mismatches between the deed and OSS, missing environmental impact assessments (AMDAL/UKL-UPL), incomplete RBA narratives, and delays in sector-ministry technical approvals.

PT PMA vs Representative Office vs Local PT Comparison Table

Foreign investors frequently ask how a PT PMA compares with other Indonesian market-entry structures. The table below highlights the key differences for high-intent decision-making.

Old vs New Paid-Up Capital Benchmark

Industry observers expect the reduced benchmark to accelerate PT PMA formations, particularly among technology start-ups and services-sector entrants. However, investors should note that the total investment commitment which includes loan capital and planned expenditure beyond the paid-up capital remains a regulatory reporting requirement and can trigger additional scrutiny if under-estimated.

Positive Investment List and Sector Ownership Caps

Indonesia’s Positive Investment List, enacted through Presidential Regulation (Perpres) No. 10/2021 and amended by Perpres 49/2021, replaced the former Negative Investment List (DNI). The new framework presumes that business sectors are open to investment including foreign investment unless expressly listed with conditions, requirements, or reserved-sector status in the annexes.

How to Read the Positive Investment List

The Positive Investment List annexes classify business activities into several categories:

• Priority sectors: Open to investment with fiscal incentives (tax holidays, customs facilities) the government actively encourages both domestic and foreign investment in these KBLI codes.
• Sectors open with requirements: Foreign ownership is permitted but may be capped at a specific percentage (e.g., 49 %, 67 %), or subject to conditions such as partnerships with cooperatives/SMEs, domestic processing obligations, or technology-transfer commitments.
• Sectors allocated to cooperatives and MSMEs: Reserved for micro, small, and medium enterprises; foreign investment is either prohibited or permitted only through partnership structures.
• Closed sectors: A narrow list of activities entirely closed to investment examples include certain alcoholic beverage manufacturing (Perpres 49/2021), gambling, and activities prohibited under specific legislation.

Example KBLI Codes and Foreign Ownership Caps

Important: Always verify the exact five-digit KBLI code in the government’s official annexes before proceeding. KBLI codes were updated in 2025, and the BPS conversion table should be consulted to ensure the correct mapping. The Positive Investment List and KBLI sector table is a critical reference investors should work with local counsel to confirm that each intended business activity falls within the permitted foreign ownership limits before submitting the OSS registration.

OSS Licensing in Indonesia: RBA, Installation and Operational Licences

Since the introduction of OSS and the risk-based licensing framework under the Job Creation Law (and now refined by PP No. 28/2025), all PT PMA business licences are processed through the OSS portal. Understanding the OSS licensing workflow is essential for any foreign company setting up in Indonesia.

The Risk-Based Assessment (RBA) Framework

Every KBLI activity registered on OSS is assigned a risk classification:

• Low risk: Business Identification Number (NIB) serves as the sole licence no further approval needed.
• Medium-low risk: NIB plus a standard certificate; self-declared compliance may suffice.
• Medium-high risk: NIB plus a standard certificate and verification by the relevant sector ministry or local government agency.
• High risk: NIB plus a full licence requiring detailed inspection, technical assessment, and ministerial approval (e.g., environmental impact assessment, construction permits, health-sector clearances).

Installation vs Operational Phase

PT PMA companies typically progress through two phases on OSS. The installation phase covers construction, equipment procurement, and pre-operational setup the company holds an installation-phase licence that permits site preparation but not commercial operations. The operational phase begins once installation is complete and the company has obtained an operational / commercial licence (Izin Operasional or Izin Komersial). Sector-specific activities (mining, telecoms, fintech, healthcare) may involve additional technical licences issued by the line ministry before the operational licence is activated.

Practical Tips to Avoid RBA Rejection

• Pre-validate KBLI codes: Ensure the codes in the corporate deed match the codes entered on OSS exactly mismatches are the single most common cause of rejection.
• Prepare technical attachments early: If your KBLI triggers medium-high or high-risk classification, obtain environmental permits (AMDAL/UKL-UPL), building approvals, or sector-ministry letters before submitting the RBA.
• Align corporate documents: The registered address, capital structure, and shareholder data in the deed must match OSS inputs precisely.
• Budget for corrective cycles: Even well-prepared applications may receive clarification requests from the OSS system; factor 2–4 weeks of potential back-and-forth into your timeline.

For a detailed, step-by-step walkthrough, see the OSS licensing in Indonesia step-by-step RBA guide (forthcoming).

Costs and Typical Timelines for PT PMA Indonesia Formation

The total cost of establishing a PT PMA in Indonesia comprises three broad components: the statutory paid-up capital deposit, government fees, and professional service fees. The following ranges are indicative only investors should obtain a tailored quote from local counsel.

Capital Deposit

The paid-up capital deposit is the single largest outlay. Under BKPM Regulation No. 5/2025, the common benchmark is IDR 2.5 billion (approximately USD 155,000–160,000 at mid-2026 exchange rates). This amount must be deposited into the PT PMA’s Indonesian bank account and evidenced by a bank confirmation letter. Regulated sectors may impose significantly higher minimums banking, insurance, and certain natural-resource activities require capital deposits measured in hundreds of billions of rupiah.

Government Registration and OSS Fees

Digital OSS filings are generally free of charge or carry only nominal fees. However, specific sector licences (mining permits, frequency-spectrum allocations, pharmaceutical approvals) attract their own government-imposed fees, which vary widely. Notary fees for deed preparation and legalisation are regulated by the Indonesian Notary Association and typically range from IDR 5 million to IDR 25 million depending on complexity.

Professional Fees

Legal counsel, corporate secretarial support, and accounting/tax setup fees vary by firm tier and scope of work. As a rough guide:

• Basic formation (single KBLI, standard structure): USD 3,000–8,000 in professional fees.
• Mid-complexity (multiple KBLI codes, sector-specific licences): USD 8,000–20,000.
• Complex (regulated sectors, environmental permits, multi-location): USD 20,000+ scope and fee to be agreed with counsel.

All fee ranges above are example ranges only and should not be relied upon as quotations. Obtain a local quote for your specific formation.

Timeline Summary

Common causes of delay include KBLI mismatches, incomplete environmental assessments, RBA rework cycles, and slow sector-ministry technical approvals. A deeper analysis of capital deposit mechanics is available in the Minimum paid-up capital for PT PMA (deep dive) resource (forthcoming).

Practical Checklist and Downloadable Template

Use the checklist below to prepare your documents before engaging legal counsel. Having these materials ready at the outset can save weeks in the formation process.

• Shareholder identification: Certified passport copies (individuals); certificate of incorporation, good standing, and board resolution authorising the investment (corporate shareholders).
• Proposed Articles of Association: Term sheet or draft covering capital structure, KBLI activities, board composition, profit-distribution mechanism.
• Business plan / investment summary: Description of activities, estimated revenue, staffing plan, total investment commitment breakdown (paid-up capital + loan capital + other outlays).
• KBLI codes: Confirmed five-digit codes for every intended activity, verified against the BPS conversion table.
• Registered address evidence: Lease agreement or domicile letter for the PT PMA’s Indonesian office.
• Technical permits (if applicable): Environmental assessments, construction permits, health-sector clearances, or other pre-existing approvals.
• Bank account details: Identify a target bank for the corporate account and capital deposit.

A downloadable template pack comprising an incorporation checklist, sample Articles/AKTA checklist, and KBLI mapping worksheet is available for download. Note that all templates require local adaptation and review by qualified Indonesian counsel before use.

Local Risks and Ongoing Compliance for PT PMA Indonesia

Establishing the PT PMA is only the beginning. Foreign-owned companies in Indonesia face a continuous compliance burden that, if neglected, can result in licence suspension, fines, or forced dissolution. Key areas of ongoing risk include:

• Employment and foreign worker permits: Expatriate employees require RPTKA approval and IMTA permits; ratios of foreign-to-local staff are monitored, and training/transfer-of-knowledge obligations apply.
• Tax compliance: Corporate income tax (currently 22 %), VAT registration and filing, transfer pricing documentation, and withholding tax obligations must be managed from the date of incorporation.
• LKPM investment reporting: PT PMA companies must file periodic investment activity reports via the OSS/LKPM module failure to file can trigger licence review.
• Sector-specific inspections: Regulated sectors (finance/crypto, telecoms, energy, healthcare) are subject to ongoing oversight by line ministries and agencies such as OJK, Bank Indonesia, and the Ministry of Health.
• PSE registration: Companies operating electronic systems may need to register as a Penyelenggara Sistem Elektronik (PSE) with the Ministry of Communication and Digital Affairs.

Early engagement of local counsel and licence specialists is strongly recommended particularly for navigating RBA corrections, sector-specific permit renewals, and evolving regulatory requirements under the OSS framework. For a comprehensive overview, see the Corporate administration and ongoing compliance (Indonesia) resource (forthcoming).

Supporting Resources and Next Steps

The regulatory framework for PT PMA Indonesia continues to evolve. Investors and their advisers should monitor BKPM circulars, OSS system updates, and amendments to the Positive Investment List to ensure ongoing compliance and to capture new incentive opportunities.

Related resources that complement this guide:

• PT PMA vs representative office (comparison) a detailed side-by-side analysis of structures, tax treatment, and employment implications (forthcoming).
• Minimum paid-up capital for PT PMA (deep dive) explaining the difference between issued capital, paid-up capital, and total investment commitment (forthcoming).
• OSS licensing in Indonesia step-by-step RBA guide detailed walkthrough with common rejection reasons and template RBA narratives (forthcoming).
• Positive Investment List and KBLI sector table a machine-readable, downloadable table of KBLI codes with foreign ownership caps (forthcoming).
• Corporate administration and ongoing compliance (Indonesia) post-incorporation requirements including tax, manpower, LKPM, and PSE (forthcoming).

All regulatory thresholds, timelines, and process descriptions in this guide are based on the laws and regulations in force as of the date of last review. Given the pace of reform in Indonesia’s investment licensing regime, investors should always verify current requirements with qualified local counsel before committing capital or filing applications.

Sources

• Peraturan Menteri Investasi / Kepala BKPM No. 5 Tahun 2025 paid-up capital benchmarks and BKPM procedural guidance for PT PMA formation.
• Peraturan Presiden No. 10 Tahun 2021 Positive Investment List framework and sector annexes.
• Peraturan Presiden No. 49 Tahun 2021 amendment to Perpres 10/2021, including closed-sector designations.
• OSS (Online Single Submission) Official Guidance OSS registration process, RBA guidance, and licence types.
• Peraturan Pemerintah No. 28 Tahun 2025 risk-based licensing regime and OSS integration.
• BPS KBLI Conversion Table (2020–2025) official KBLI code mapping and classification reference.
• BKPM Previous Investment Regulation Guidance historical reference for the former IDR 10 billion paid-up capital benchmark.