Company Registration in Indonesia
Indonesia, with its massive consumer base and strategic location, offers immense opportunities for foreign investors. The most common legal entity for foreign investors is the PT PMA (Perseroan Terbatas Penanaman Modal Asing), which allows foreign ownership.
What is PT PMA?
PT PMA stands for "Limited Liability Company with Foreign Direct Investment". It is the only legal entity in Indonesia that allows foreign nationals or foreign companies to own shares. Depending on the business sector, foreign ownership can be up to 100%.
Key features of PT PMA:
- Foreign Ownership: Allows up to 100% foreign ownership in many sectors (subject to the Negative Investment List).
- Legal Entity: It is a separate legal entity with limited liability.
- Business Activities: Can conduct full business operations, including sales and revenue generation.
- Sponsorship: Can sponsor work visas (KITAS) for foreign employees.
Benefits of Registering a PT PMA in Indonesia
- Full Control: Foreign investors can have full control over their business operations.
- Work Permits: Easier to obtain work permits (KITAS) for foreign directors and employees.
- Import Duties: Potential for lower import duties on machinery and raw materials.
- Property Ownership: Can own property under the "Right to Use" (Hak Pakai) and "Right to Build" (Hak Guna Bangunan) titles.
- Market Access: Direct access to the largest economy in Southeast Asia.
Requirements for PT PMA Registration
- Shareholders: Minimum of two shareholders (can be individuals or corporate entities).
- Directors & Commissioners: Minimum one Director and one Commissioner. At least one Director should ideally be a resident (though not strictly mandatory for incorporation, it helps with tax and bank account opening).
- Capital Requirement: The minimum authorized capital is typically IDR 10 billion (approx. USD 700,000), with at least 25% paid up. Note: This high capital requirement is a key consideration for foreign investors.
- Registered Address: A physical office address in a commercial zone (virtual offices are allowed in some areas).
Documents Required
- For Individual Shareholders: Copy of Passport (valid for at least 18 months).
- For Corporate Shareholders: Copy of Articles of Association, Certificate of Incorporation, and Board Resolution from the parent company.
- Office Address Proof: Lease agreement and domicile letter from the building management or local authority.
- Proposed Company Name: 3 options for the company name (must be in Indonesian language if owned by Indonesian citizens, but PT PMA can use English names in practice, though regulations encourage Indonesian).
Registration Process
- Name Approval: Submit proposed company names to the Ministry of Law and Human Rights.
- Deed of Incorporation: Sign the Deed of Incorporation before a Notary Public.
- Ministry Approval: Obtain approval of the Deed from the Ministry of Law and Human Rights (SK Kemenkumham).
- Tax Registration: Obtain the Taxpayer Identification Number (NPWP).
- NIB Registration: Register via the Online Single Submission (OSS) system to get the Business Identification Number (NIB).
- Bank Account Opening: Open a corporate bank account in Indonesia.
