Set up a new company in Indonesia
To be able to sell goods or services and doing business in Indonesia, foreign investors can set up a new company in the form of PT-PMA.
PMA companies in Indonesia must take the form of a limited liability
establishment (PT). Other business forms, such as CV and UD, are reserved for
Indonesians only. Any
company owning any percentage of foreign shareholding is
a PMA company. 100% foreign-owned PMA companies are possible in many cases, but
some sectors require a proportion of Indonesian shareholding, as determined
within the Negative List of Investment (DNI).
What is PMA company
A PMA company is a limited liability company established under Law No 40 of 2007 on Limited Liability Companies (Company Law). A PMA company may be a joint venture company established by a foreign investor and an Indonesian partner or (where 100% foreign shareholding is permitted) a wholly foreign-owned company.
For foreign investors, a PMA is the only form permitted under the Foreign Investment Law. However, foreigners may have a presence other than through a direct investment, and this is discussed later in this Chapter.
Company Law & Investment Regulation
A PMA Company consists of a board of directors and a board of commissioners,
each of which is appointed by a general meeting of shareholders.
The roles, rights, responsibilities and liabilities of the directors and commissioners are regulated under Law No. 40 of 2007 on Limited Liability Companies (Company Law) and the articles of association of the PMA Company.
The Company Law provides that a PMA Company must have:
- Generally, a minimum of one director and one commissioner, with no maximum number and
- A minimum of two shareholders at all times.
The directors are responsible for the day-to-day management of the PMA Company in the interests of the PMA Company and in accordance with its purposes and objectives.
Foreign nationals may serve as directors or commissioners of a PMA Company, but a person cannot have the concurrent role of director and commissioner in the same PMA Company.
The commissioners are responsible for supervising the directors, again in the interests of the PMA Company and in accordance with its purposes and objectives.
How to set up a new PMA company in Indonesia?
To conduct business activities and set up a new PMA company in Indonesia, the investor should obtain foreign investment approval (Principal License/Izin Prinsip) from BKPM.
A PMA company must be established in the form of PT (limited liability company) and domiciled in the territory of the Republic of Indonesia. PMA company must be formed with the Deed of Establishment as the articles of association of the company by a Public Notary. The process of establishing a new PMA company can be submitted to the Public Notary after the investment principle licenses issued by BKPM.
Before a formal application to establish a PMA company is lodged with the BKPM, an investor should confirm that the proposed line of business of the company is open for foreign investment by reviewing the current negative list and any applicable investment guidelines issued by the BKPM. It is also important to make preliminary inquiries at the BKPM to ascertain that there are no objections to the proposed line of business and to ascertain whether there are any official or unofficial policies or practices that may be relevant to the application. Also, in the case of a joint investment by a foreign investor and an Indonesian partner, a joint venture agreement should be negotiated to decide upon the terms of the joint venture.
What should you know before setting up a companies in Indonesia?
What are the basic requirements to establish a PMA company?
The basic requirements and facts are as below:
To establish the PT-PMA is required at least 2 (two) people as the founder of the company.
- Anyone (a local or a foreign person) can register a new Indonesian PT PMA company.
- 100% foreign-owned PMA companies are possible in many cases
- Minimum paidup capital of US$300,000
- Minimum of 2 shareholders
- Minimum of 1 director and 1 commissioner
- Directors and all foreign expert must have a visa and working permits
- Must have a local registered address in the commercial building
The professional fee to set up a new Indonesian PT PMA company
The processing time 35 working days
Our package includes;
Foreign investment permits (Principal license), Incorporation of PT-PMA, Company registration and other permits, Sworn English Translations of all important company documents provided