What Is a PT PMA and Why You Need One for Business in Indonesia
As Indonesia continues to grow economically, more and more foreign investors are curious about how to get involved in the business landscape here. If you’re one of them, then opening a PT PMA (Penanaman Modal Asing) or effectively, a foreign owned company, is the way to do it. Whether you're planning to open a restaurant, run a digital agency, invest in property or something else, let’s explore what a PT PMA is and why you need one.
Setting up a PT PMA is an important step for foreigners to conduct business legally in Indonesia.
A PT PMA is Indonesia's framework for foreign investment, and is designed to allow overseas individuals and companies to operate legally within the country. PT LOCAL companies are reserved for Indonesian citizens, whereas PT PMAs enable foreign ownership ranging from 1% to 99%.
What does PT/PMA stand for?
PT (Perseroan Terbatas): Limited Liability Company
PMA (Penanaman Modal Asing): Foreign Investment
Why You Need a PT PMA in 2025
Legal legitimacy and protection are the two main reasons why a PT PMA is essential if you want to conduct any kind of business in Indonesia. Without one, you risk facing potential deportation, having no legal protection for your business activities, and any contracts you sign could effectively be void. This means your investments won't be protected, leaving you vulnerable to all kinds of risks.
With a PT PMA, you can:
Generate and receive income legally in Indonesia
Hire Indonesian employees
Enter into valid contracts
Issue official invoices and receipts
Access corporate banking services
Asset Protection and Ownership Benefits
Through a PT PMA, you gain significant rights, including the ability to obtain property rights (HGB title) for land and buildings, purchase and register vehicles under the company name, and protect your business assets under Indonesian law. These rights are particularly crucial for businesses that require physical presence or significant investments. Having a HGB title also allows you the ability to renew your leasehold rights for up to 80 years, and pass them onto your children (as long as they are over age 18) by naming them as one of the shareholders of the company. If you’re looking to own land long-term in Indonesia, having a PT PMA is the best way to do so.
HGB can only be owned by Indonesian citizens (WNI) and legal entities established in Indonesia, including PT PMA.
Immigration Benefits and Long-term Security
One of the most valuable aspects of a PT PMA is the immigration benefits it provides. Having a PT PMA enables you to obtain a KITAS permit, as well as sponsor your family members to get Family KITAS in Indonesia. This means that you and your family can live in Indonesia long term.
For those looking for more permanent residency, it’s a real plus, as those who stay in the same position and KITAS for 5 years are then eligible to apply for a long-term visa, known as a KITAP. Alongside this, having your KITAS will mean you can get access to social security through Indonesia’s healthcare system, known as BPJS, as well as priority access at the airport, discounts in many businesses and the ability to get a driving license.
What Do You Need to Set Up a PT PMA?
Your PT PMA will need to be set up by a professional, but these are the requirements for eligibility:
Corporate Structure Requirements:
Minimum capital investment of IDR 10 billion (approximately $650,000 USD)
At least two shareholders (individuals or corporate entities)
Appointed director and commissioner (must be different individuals)
Valid business address
Clear business classification (KBLI) codes
What Happens If You Do Business Without a PT PMA
Whilst some foreigners attempt to conduct business in Indonesia through unofficial means, such as operating under tourist visas or using nominee arrangements, we strongly recommend not doing so. Such approaches can lead to severe consequences including deportation, blacklisting, and even a complete loss of business assets. Without a PT PMA, you have no legal protection for your business interests and cannot access proper banking and financial services, which in the long run will make your life stressful and your business inefficient.
All business entities involving foreign investment must be in the form of a PT PMA (Foreign Investment Limited Liability Company) in accordance with Law No. 25 of 2007 on Investment.
Something To Consider - Industry Regulations:
Indonesia has different regulations regarding foreign ownership according to the sector your business operates in. For example:
Fully Open Sectors (100% foreign ownership permitted):
Restaurant and food services
Most retail operations
Most type of corporate consulting
Sectors with Ownership Restrictions:
Construction (requiring partial local ownership)
Transportation services
Media and broadcasting
Medical & aesthetic clinics, including beauty salons
Financial Framework and Compliance
Operating through a PT PMA provides a clear financial structure and compliance framework. This includes access to both local and international banking services, the ability to receive international payments legally, and options for profit repatriation through proper channels. Additionally, the PT PMA structure offers protection against personal liability, separating your business assets from personal ones.
Is Doing Business in Indonesia Still a Good Idea?
As Indonesia continues to modernize its business environment, PT PMAs are becoming increasingly streamlined through digital integration and government initiatives supporting foreign investment. While some of the requirements remain strict, the opportunities for business expansion across various sectors are still growing.
How To Set Up Your PT PMA:
Establishing a PT PMA typically involves three main phases:
Phase 1 (2-5 business days):
Company registration, documentation preparation and notary processes
Phase 2 (1-6 business days):
Government registration and business licensing through the Online Single Submission (OSS) system
Phase 3:
Final setup including bank account opening and operational permits
The Main Reason? Securing Your Future:
Although meeting the requirements and opening your PT PMA requires patience and a substantial investment, it provides an avenue to secure your future and a safe foundation for doing business in one of Asia’s most dynamic markets. Whatever you do, make sure you protect yourself and your investments from day one so that you can have the peace of mind to scale your business and thrive here without stress.
If you need further assistance, don’t hesitate to reach out to us here at Bali Solve. As Bali’s premier business consulting and visa agency, and have helped countless successful business owners with opening their PT PMAs. Let us guide you every step of the way with our A-Z services in all areas related to business. Drop in to our Pererenan office or make an appointment with one of our expert business consultants via Whatsapp to start making your business idea a reality today.
Written by Team Bali Solve
09 March 2025
