Indonesia company formation for non-residents

Why investors set up a PT PMA

Indonesia is the largest economy in Southeast Asia by population and output. A PT PMA is the standard vehicle for foreign investors who want to trade, manufacture or provide services there.

It is an operating company, not a holding vehicle. The capital rules, quarterly investment reports and sector permits assume you plan real activity in Indonesia.

Capital must be real. The paid-up amount goes into the company's Indonesian bank account and is checked in the investment reports that follow.

Foreign ownership and the Positive Investment List

The Positive Investment List, set by Presidential Regulation 10 of 2021 as amended by Regulation 49 of 2021, decides how much of a business foreigners can own. Most sectors are fully open. A short list is closed to all investment, some activities are reserved for Indonesian micro and small businesses or cooperatives, and some carry a foreign ownership cap.

Each activity is identified by a KBLI code, the Indonesian standard industrial classification. Getting the code right matters, because licences, capital and ownership limits follow it.

Nominee share arrangements are void under Article 33 of the Investment Law. If an activity is restricted, the answer is a compliant structure, such as a local partner holding real shares, not a side agreement.

• Open sectors: up to 100% foreign ownership
• Capped sectors: foreign shareholding limited to a set percentage
• Reserved sectors: for Indonesian micro and small businesses or cooperatives
• Closed sectors: not open to investment

Capital and investment thresholds

BKPM Regulation 5 of 2025 lowered the minimum paid-up capital for a PT PMA to IDR 2,500,000,000 from 2 October 2025. Before that date it was IDR 10,000,000,000.

The investment value test did not change. Your plan must still exceed IDR 10,000,000,000 per KBLI code at each project location, excluding land and buildings. Some sectors set their own higher thresholds, and paid-up capital may not be withdrawn or moved out of the company during its first 12 months (confirm with your specialist).

How set-up works

We confirm your KBLI codes and ownership limits first. Then an Indonesian notary drafts the deed of establishment, which the Ministry of Law approves.

The company then registers on the Online Single Submission (OSS) system. Government Regulation 28 of 2025 now governs this risk-based licensing, replacing GR 5 of 2021. OSS issues the Business Identification Number (NIB) and the company receives its tax ID (NPWP).

Low-risk activities can start with the NIB. Medium and high-risk activities also need standard certificates or permits, which take longer. The whole standard set-up usually takes 3–6 weeks after KYC approval.

Each business line has a KBLI code, and each code carries a risk level, an ownership limit and a licensing path. Choose too few codes and the company cannot legally do part of its work. Choose too many and the investment value test multiplies, because it applies per code and per location.

The office address must suit the activity under local zoning rules. Some activities need a physical office or site, while others can use a serviced office. We check the address against your codes before the deed is signed, because changing it later means amending the deed and the OSS records.

Shareholders, directors, commissioners and foreign staff

A PT PMA needs at least two shareholders, which can be individuals or companies. It has a two-tier board: at least one director who runs the company and at least one commissioner who supervises.

Company Law sets no residence rule for directors or commissioners. A foreigner who lives and works in Indonesia as a director needs a work permit and a stay permit (KITAS).

A foreign national who will work in Indonesia needs an approved foreign worker utilisation plan (RPTKA) from the Ministry of Manpower and a limited stay permit (KITAS) from immigration. The company pays a monthly compensation fund charge for each foreign worker.

Foreign shareholders and directors who stay abroad and only sign documents do not need these permits. Once someone lives in Indonesia and works for the company, the permits must be in place before they start.

Directors of a PT PMA are personally liable if they act in bad faith or cause losses through negligence, and commissioners share liability for failed supervision. Choose people who understand the business and will read what they sign.

Tax, audit and reporting

Corporate income tax is 22%. The company collects VAT on most sales, withholds tax on salaries and many payments, and files monthly returns. The annual corporate return is due within four months after the end of the tax year.

Company Law requires audited financial statements when assets or turnover reach IDR 50,000,000,000, or when the company raises public funds or issues debt. Every PT PMA files an LKPM investment report through OSS each quarter, and missing it can lead to sanctions on the business licence.

Dividends paid to foreign shareholders are subject to withholding tax, which a tax treaty may reduce (confirm with your specialist). Transactions with a foreign parent or sister company must be priced at arm's length and documented.

What OCC handles and what it costs

Our Indonesia package starts at US$2,799 for year 1 with the standard government and notary fees included, and US$1,342 from year 2. It covers the sector check, notarial deed, Ministry of Law approval, OSS registration and tax ID.

Sector permits, work and stay permits, monthly tax and LKPM filing are quoted separately. OCC is licensed in Hong Kong as a trust or company service provider (TCSP TC001305) and works through Indonesian notaries and licensed consultants where local law requires them. Banks decide on accounts; we introduce you and prepare the application.