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UPDATE 2020: Establish a Foreign Company (PT PMA) in Indonesia

Many sectors are open to Foreign Investment Companies, and for that many reasons, the investment value keeps rising rapidly in recent years. According to Indonesia’s large population as well as abundant natural resources, this country is considered as one of the most potential countries for a good deal.#establish a Foreign Company (PT PMA) in Indonesia.

Besides open wider sectors, simpler procedures for establishing a foreign company are now offered to attract many more investors. To find out any further information about PT PMA and how to establish
a Foreign Company (PT PMA) in Indonesia
, here are some simple guides for you.


What is PT PMA

Based on Law No. 25/2007, PT PMA is a business run or invested by foreign investors, companies, or governments in the territory of Indonesia. PT PMA regulation itself is under the authority of the Company Law No. 40/2007. The foreign company can be either 100% foreign-owned or partially foreign-owned.

Also based on Law No. 25/2007 regarding Capital Investment (the “Investment Law”), Foreign Investment is defined as an investment activity to perform business in the territory of the Republic of Indonesia by foreign investors, either through foreign investment entirely or joint venture with domestic investors.

Who Can Establish PT PMA

Whether it is individuals or legal entities, the two parties can be the shareholders. However, PT PMA must consist of at least two foreign individuals, the foreign company, Indonesian stakeholder, and Indonesian legal presence or more.

In addition, to protect small businesses, only large companies with a total investment above 10 billion Indonesian Rupiah are allowed to have foreign shareholders. Therefore, if a PT FMA wants to set up a foreign company, the investors have to pay up 2.5 billion Indonesian Rupiah (more or less than USD 200,000) as capital. Despite the requirements, there are some industries which are required by law to pay up the minimum capital higher than 2.5 billion Indonesian Rupiah, such as financial industries, logistics and freight forwarding, and 100% foreign-owned e-commerce companies.

What You Need to Know About PT PMA Establishment

It is necessary to set up a business plan and learn about the Negative Investment List (DNI) based on the President Regulation of Republic of Indonesia No. 39/2014. Through DNI, investors will be able to know which business sectors or line of businesses are open or restricted/closed to foreign investment in Indonesia. DNI comprises 3 (three) major sections, namely (1) Open Business Fields; (2) Closed Business Fields; and (3) Open Business Fields with Conditions.

PT PMA must involve at least two shareholders; individual or legal entities are both allowed. While for the business structure, it must have at least the general meeting of shareholders, the board of directors, and the board of commissioners.

To attract more foreign investment, the government has simplified its procedures and allowed some new sectors.

If you’re looking for a business service to help you out with the steps, we will give you the perfect assistance. Indoned Consultancy will lead and accompany you through the Foreign Company (PT FMA) establishment process. Make a great investment in Indonesia and let us give you the best guidance. Start your business right with Indoned Consultancy!

Stay tuned for updates from our official website to get the latest news during the pandemic period in Indonesia. We are always ready to provide you with the latest information or regulations that you might need to know about. Please don’t hesitate to send your question to our email info@indo-ned.com.

Source: https://izin.co.id/indonesia-business-tips/2020/07/01/complete-guide-to-establish-a-foreign-company-pt-pma-in-indonesia-2020/

Disclaimer:

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.

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