Foreign Owned Company
A foreign-owned company in Indonesia is commonly referred to as a PT PMA – a Limited Liability company with foreign capital. It is a common and preferred company type or structure chosen by foreign businesses and investors, as it is designed to meet the legal requirements stipulated by the government.
Establish a PMA Company in Indonesia:
The Procedure:
✅ Step 1 – Approval of Company Name
It should consist of three words that are not vulgar or obscene.
✅ Step 2 – Deed of Incorporation
It should include an Article of Association, and a notary must be present.
✅ Step 3 – Approval of Legal Entity
After submission of Deed of Incorporation by the notary, the Ministry of Law and Human Rights will give approval.
✅ Step 4 – Registration of Tax ID (NPWP)
A valid NPWP is required for securing other company’s licenses, banking activities, and fulfilling tax obligations.
✅ Step 5 – Domicile Letter
Required to show the location of your business.
✅ Step 6 – Application of NIB
Alongside NIB, Business License(s) and Location Permit will also be granted one day following the registration via OSS.
✅ Step 7 – Application of Other Licenses
Depending on the business sector, additional licenses such as commercial license and tourism license may be required before operation.
Benefits of a PT PMA (Foreign-Owned Company):
✅ Ability To Employ Foreigners
A foreign-owned company can sponsor and issue work KITAS for its international employees. It can also sponsor business visas for business partners and clients arriving in Indonesia for a short stay.
✅ Own The Rights To Register Products
Register your products under your PT PMA to ease business operations in Indonesia, instead of relying on an Importer of Records.
✅ Own The Rights To Obtain License
With a PT PMA, your company will be able to apply for various business licenses to further diversify your business portfolio or investments.
Other Requirements Of Starting a PT PMA For 100% Foreign Ownership In Indonesia.
👉 Paid-Up Capital Amount
All PT PMA(s) are required to fulfill the minimum paid-up capital of IDR 10 billion. Shareholders of the company are required to sign off a Capital Statement Letter stating that the shareholders have sufficient funds to meet the required capital.
👉 The Structure Of A PT PMA
As outlined in Indonesia’s Company Law, a corporate structure of a PT PMA consists of Shareholders, Board of Commissioners, and Board of Directors.
A Shareholder as the namesake states owns the company – they could be individual or corporate shareholders. They have the highest authority when it comes to decision-making. They could be an individual, company, or foundation. The PT PMA will also require a minimum of 1 Commissioner and 1 Director.