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Expanding Market Entry in Indonesia with PT PMA

PT PMA Indonesia

Indonesia offers a promising investment landscape for foreign businesses. For international investors, establishing a Foreign Investment Limited Liability Company (Perseroan Terbatas Penanaman Modal Asing/PT PMA) can provide opportunities in various sectors. However, complying with the foreign ownership rules, capital requirements, and operational procedures can be challenging without suitable local expertise.

Putranto Alliance provides comprehensive guidance for foreign investors to establish and manage a PT PMA in Indonesia, ensuring a smooth process.

Key Challenges

Foreign investors may face several challenges when establishing a PT PMA in Indonesia:

  1. Foreign Ownership Rules: Foreign ownership of shares in Indonesia is guided by the Priority Business Field List (Daftar Bidang Usaha Prioritas), established under President Regulation (Peraturan Presiden/PP) Number 49 Year 2021 concerning Amendments to Presidential Regulation Number 10 of 2021 concerning Investment Business Sectors. The list identifies priority sectors eligible for investment incentives and sets limits on foreign ownership in certain industries.
  2. Choosing the Right Business Classification (Klasifikasi Baku Lapangan Usaha Indonesia/KBLI): The KBLI determines allowed business activities, licensing requirements, and foreign ownership limits. Selecting incorrect KBLI can block permits, restrict future activities, or increase ongoing compliance burdens.
  3. Minimum Capital and Investment Requirements: A PT PMA is expected to meet a minimum total investment of IDR 10 billion per KBLI, excluding land and buildings. The typical paid-up capital at incorporation is IDR 2.5 billion. Failure to comply with the minimum capital can delay NIB or subsequent licensing in the Online Single Submission Risk Based Approach (OSS RBA) system. The OSS RBA system ties to the business KBLI, capital plan, and sector permits, making it essential for a smooth setup.
  4. Common Establishment Mistakes: Investors often make errors in company structuring, business classification selection, capital allocation, licensing, and compliance documentation. These mistakes can result in regulatory penalties, delays, or loss of business opportunities.

Representative Office vs. PT PMA

When entering the Indonesian market, selecting the appropriate business structure is a crucial decision that impacts operational flexibility, regulatory compliance, and long-term growth. Foreign investors can choose between a Representative Office, other limited-purpose entities, or a full PT PMA (Foreign Investment Company), depending on their objectives and the scope of their operations.

A Representative Office is limited to liaison, marketing, and feasibility studies, and is not authorized to generate revenue.

On the contrary, a PT PMA allows full operational activities but requires compliance with investment and ownership regulations.

How Putranto Alliance Supports PT PMA Establishment

  1. Incorporation & OSS RBA Management: We map your structure correctly, prepare the deed and corporate documents, and execute all submissions in OSS RBA to secure your NIB and core licenses. With complete documents and a clear KBLI, most incorporations are completed in about 3–6 weeks (sector-dependent). We manage each step and remove blockers that usually cause delays.
  2. Foreign Ownership Structuring: We align your shareholding with the latest Priority Business Fields and KBLI-based limits to avoid rejection or forced restructuring. The team reviews business filings to eliminate common blockers, such as incorrect KBLI codes, incomplete data, or missing sectoral documents, that may trigger OSS RBA errors and resubmissions.
  3. Capital Planning & Evidence: We advise the minimum total investment (IDR 10B per KBLI, excluding land/buildings) and incorporation (IDR 2.5B typical paid-up capital).
  4. Post-Incorporation Compliance: We manage the future reporting after the NIB is issued:
    1. LKPM reporting setup to BKPM (cadence, data points, who files).
    2. Tax registrations (NPWP, PKP if VAT-registered).
    3. Social Security (Badan Penyelenggara Jaminan Sosial/BPJS) for employee, such as Medical (BPJS Kesehatan) and Manpower (BPJS Ketenagakerjaan).
    4. Ongoing license maintenance and change notifications in OSS RBA (address, shareholding, KBLI updates).

Why Choosing Putranto Alliance

At Putranto Alliance, our expertise in Indonesian corporate law, investment regulations, and tax compliance ensures foreign investors can focus on business growth without being hindered by regulatory complexities.

  1. International best practices with deep local execution.
  2. Seamless compliance with BKPM, OSS RBA, the Ministry of Law, and sectoral authorities.
  3. Tailored solutions for ownership limits, capital requirements, KBLI strategy, and post-incorporation compliance.

Avoid costly delays and rejected business registration applications.

Contact Putranto Alliance today to secure your PT PMA in Indonesia with confidence from day one.

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