PMA Company in Indonesia: A Comprehensive Guide for Foreign Investors
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Published on October 21, 2025 · 5 min read · by Ilham Budiman

pma company indonesia

Penanaman Modal Asing (PMA) also known as a Foreign Direct Investment (FDI) Company, is a legal business entity established under Indonesian law that allows foreign individuals or entities to invest and operate a business in the country.

A PMA Company is regulated by the Ministry of Investment and Downstream Industry (BKPM), as stipulated in Undang-Undang Nomor 25 Tahun 2007 tentang Penanaman Modal (Law on Investment).

The PMA structure is the primary gateway for foreign investors who want to run a business in Indonesia with foreign ownership of more than 49%.

However, certain industries may have ownership restrictions under the Positive Investment List (Daftar Positif Investasi), which specifies sectors open to foreign investment and their ownership limits.

A PMA Company offers several advantages, including the ability to operate commercially throughout Indonesia, issue work permits (KITAS) for foreign employees, open corporate bank accounts, and participate in government projects.

Then, how do you set up a PMA company in Indonesia? Check out the guide below!

How to Establish a PMA Company in Indonesia

1. Determine Business Classification and Ownership Structure

Unsplash/Amina Atar

Before initiating the registration process, investors must identify the business classification according to the Indonesian Standard Industrial Classification (KBLI) and review the Positive Investment List to ensure the sector is open to foreign ownership.

Depending on the sector, foreign investors may be allowed up to 100% ownership or be required to form a joint venture with a local partner.

A PMA company must have at minimum:

Two shareholders (individuals or legal entities)
One director
One commissioner

2. Reserve a Company Name

Investors must choose a unique company name in compliance with the Ministry of Law and Human Rights regulations.

The name should consist of at least three words, avoid prohibited terms, and not resemble existing company names.

You can reserve the company name through the government’s official online system at ahu.go.id/sabh/perseroan/pesannama.

3. Obtain a Deed of Establishment

In this step, you can obtain the Deed of Establishment that is prepared and signed before a notary public in Indonesia. The Deed of Establishment sets out the company’s articles of association, ownership structure, and business objectives.

Once signed, the deed must be submitted to the Ministry of Law and Human Rights for approval.

4. Register with the OSS System

To facilitate business operations, Indonesia has implemented the OSS (Online Single Submission) system, which streamlines the licensing process by allowing companies to apply for and manage all required permits online.

Through OSS, investors can obtain:

Business Identification Number (Nomor Induk Berusaha/NIB)
Business licenses relevant to the chosen industry
Operational permits (if required)

5. Secure Additional Sectoral Licenses

Unsplash/Mina Rad

Certain industries, such as mining, oil and gas, healthcare, and education, require specific sectoral licenses in addition to the standard business licenses.

In the property sector, additional permits are often required based on the project type, such as residential, commercial, or industrial developments.

These may include land-use permits, building permits (IMB/PBG), and environmental impact assessments (AMDAL) issued by local governments.

These licenses must be obtained from the relevant ministries or regulatory authorities before the company can commence operations.

6. Register for Tax Identification Number (NPWP)

A PMA Company in Indonesia must register for a corporate Tax Identification Number (NPWP) at the local tax office.

This number is essential for fulfilling tax obligations and conducting official financial transactions in Indonesia.

7. Open a Corporate Bank Account

Once the company has its legal documentation, it can open a corporate bank account in Indonesia.

This account can be used for business transactions, capital injection, and operational expenses.

8. Report Investment Realization to BKPM

After the company starts operations, it must submit periodic investment activity reports (LKPM) to BKPM to ensure compliance with investment regulations.

Failure to report may result in administrative sanctions or suspension of licenses.

Capital Requirements for Establishing a PMA Company in Indonesia

Unsplash/Radission US

When setting up a Penanaman Modal Asing (PT PMA) company in Indonesia, the government requires a minimum authorized capital of IDR10 billion (approximately USD650.000), as stipulated by the Ministry of Investment and Downstream Industry (BKPM).

Out of this amount, at least 25% must be issued and paid-up before the company’s incorporation is completed.

The paid-up capital can be in the form of cash or assets, and proof of payment must be documented in the company’s deed of establishment.

This capital requirement applies to most industries, although certain business sectors may have higher or lower thresholds depending on specific regulations.

Therefore, it is crucial to verify the applicable capital requirements based on your intended business activities before starting the incorporation process.