PT PMA process

Investment in Indonesia is regulated by Law Number 25 of 2007 concerning Investment. According to this law, PMA refers to the activity of investing capital to conduct business in the territory of the Republic of Indonesia, carried out by foreign investors, either fully using foreign capital or in partnership with domestic investors (Article 1 of Law Number 25 of 2007 concerning Investment).

Penanam Modal Asing (PMA), has several advantages, including its long-term nature and significant contributions to technology transfer and management skill exchange. Additionally, it plays a crucial role in creating new employment opportunities, which is particularly vital for developing countries given the limited capacity of the government to generate employment opportunities.

Criteria for establishing a PMA :

1. A minimum investment plan of IDR 10 Billion is required for each business sector.
2. Ensure 100% paid-up capital, with a minimum threshold of IDR 10 Billion.
3. A minimum of 2 shareholders, comprising 1 director and 1 commissioner.
4. While some business sectors allow full foreign ownership, certain sectors have restrictions outlined in the Indonesian Negative Investment List.
5. Selection of a physical business address necessitates the preparation of documentation. Obtain local permissions to operate in the chosen location.

Documents required to establish PMA :

1. A color scan of the ID page from your passport is required (valid for a minimum of 18 months).
2. A scan of the ID Card (KTP) and Tax ID card (NPWP – Nomor Pokok Wajib Pajak) is necessary if the Director or Commissioner is Indonesian.
3. The company’s legal documents are required if the shareholder is a legal entity, and the scanned ID page of the Director’s Passport must remain valid for a minimum of 18 months.
4. Copy of the Land Certificate.
5. Copy of the Land & Building Tax for the latest year.
6. Copy of the Land/House/Building Lease agreement if the office space is leased.
7. Copy of the ID Card of the Land/House/Building Owner.
8. Drawing of the Building Permit (IMB) indicating the office or shop function.