If you have decided to expand your business and profit from the huge Indonesian market, you will need help navigating the rules on how to register a company in Indonesia. MAM Corporate Solutions can help you to set a Direct Foreign Investment Company (PT PMA) in Indonesia.
Restrictions on foreign investors and available alternatives
If you are foreign investor, you can establish Foreign Direct Investment Company known as PT PMA or just a Representative Office. However, according to the rules of business in Indonesia, several business sectors are closed for foreign investors. Negative Investment List issued by Government of Indonesia provides details about what business sectors are either partially closed or fully closed for foreign investors. You can download the Latest Negative Investment List. Consequently, foreign investors must form a local PT company to start a business in that sector which has restrictions for foreign investors in Indonesia. Foreign investors can form Local PT company through Local nominee shareholder. Read more about local nominee company here.
Indonesia has enormous business opportunities for foreign investors and its citizens. In order to start and carry out a profitable business in Indonesia, foreigners must first incorporate a Direct Foreign Investment Company (PT PMA).
Advantages of setting up PT PMA
- It gives foreign investors complete control over the path of the company.
- There are no restrictions on where a PMA can function in Indonesia.
- It lowers the risk in finding a suitable local partner.
Steps for setting up a PT PMA
Here are the steps needed to establish a Direct Foreign Investment Company:
|No.||Description||Administrating body||Duration (working days)|
|1||Approval of company name from the department of Law and Human Rights||The Ministry of Law & Human Rights||1|
|2||Deed of Establishment (containing Articles of Association) legalized by Public Notary||Public Notary||7|
|3||Legalization of the legal entity status of the Direct Foreign Investment Company(PT PMA) by the Minister of Law and Human Rights||The Ministry of Law & Human Rights||3|
|4||Domicile letter of company (Not needed if company is incorporated in Jakarta)||Landlord of the office building and Local Council||3|
|5||Tax Identification Number (NPWP) and tax payer registration certificate (SKT) from the tax office||Tax office||3|
|6||Business Identification Number through Online Single Submission (OSS) system||Provincial Government||3|
Investment plan for PT PMA
According to new regulations, foreign investors must invest more than 10 billion rupiah (approximately equal to $750,000) as their capital with the minimum paid-up capital amount is 25% which is 2.5 billion rupiah (approximately equal to $170,000). Investment can be either cash or net assets, for example, machinery. After the company has been established, and has a bank account, paid-up capital shall be paid (stated by notary letter).
How MAM Corporate Solutions can help?
Process of registering Direct Foreign Investment Company (PT PMA) in Indonesia is very detailed and challenging. Additionally, surrounding countries, for example the ASEAN countries are continuously altering and updating rules for business engagement. Thus, the need to have professionals and specialists in Indonesia is vital to your success. MAM Corporate Solutions’ experts help companies to steer through local regulations and understand the customs of business in Indonesia.
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