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What is FDI?
PT Penanaman Modal Asing or PMA, is a limited liability company established under Indonesian law in which there is an investment or use of foreign capital either fully using foreign capital or in partnership with domestic investors.
Why Establish a PT PMA in Indonesia?
Wide and Growing Market
With a population of more than 270 million, Indonesia boasts one of the largest consumer markets in the world, providing great opportunities for business growth.
Stable Economic Growth
Indonesia has the largest economy in Southeast Asia with a stable growth rate, creating a favorable environment for long-term investment.
Investment Incentives and Ease of Business
The Indonesian government provides various incentives and facilities for foreign investors, including tax exemptions and easy licensing, which makes the investment process easier and more attractive.
Competitive Labor
Indonesia offers an abundant and low-cost labor force, as well as skilled workers in various industrial sectors, enabling better operational cost efficiency.
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What are the requirements for establishing a PT PMA?
Foreign Direct Investment must be a PT
PMA must be a limited liability company (“PT”) based on Indonesian law and domiciled in Indonesia.
Can only conduct large business activities
Foreign investors can only conduct business activities in large businesses. Thus, foreign investors are not allowed to conduct business activities in micro, small, and medium enterprises in Indonesia.
Investment Capital Greater than IDR 10 Billion
Foreign investors must meet the investment value requirement, which is greater than IDR10 billion excluding the value of land and buildings per 5-digit KBLI business field per project location.
Minimum Paid-up Capital of IDR 10 Billion
For PMA, the minimum capital requirement is that the issued/deposited capital must be at least Rp10 billion.
FAQ about PT PMA Establishment
How is a PT PMA different from a Representative Office?
Foreign Investment (PMA) is an investment activity to conduct business in the territory of the Republic of Indonesia carried out by foreign investors, both those who use foreign capital entirely or in partnership with domestic investors.
Foreign Representative Office (KPPA) is an office headed by an individual Indonesian citizen or foreign citizen appointed by a foreign company or a combination of foreign companies abroad as its representative in Indonesia.
Can FDI Own 100 Percent Shares?
Yes, a PT PMA can be established with a maximum foreign shareholding of 100 percent or with joint ownership between foreign and local investors.
Can I Change from a Regular PT to a PMA PT?
Yes, if a foreign entity becomes a shareholder in a PT that is already operating, the PT is obliged to change its articles of association and its status to become a PT PMA through the Online Single Submission (OSS) platform.
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