As investment climate grows positively in Indonesia, business opportunity is also wide open, not only for local businessmen, but also for foreign businessmen. In order to doing business in Indonesia, indeed foreigner has to comply with certain legal obligations, one of which is stipulated in Company Law No.40 of 2007. To cope with this regulation, it will be better for foreign investor to consult with expert in order to meet the requirement on how to register and establish company in Indonesia .
Great news for Foreigners who want to establish company in Indonesia, the company law allow foreigner to invest directly in Indonesia as company share holder in the PT. PMA. PT PMA itself means Foreign Direct Investment Limited Liability Company, so it is different from other indirect form of foreign investments, such as opening up a Representative Office (Kantor Perwakilan Perusahaan Asing or KPPA) and conducting financing arrangements with Local PT.
So what is the benefit of investment through PT. PMA ? First, PMA allowed foreign investor to have immediate and direct control once the company has been established. The other benefit is that PT. PMA can sponsor foreign shareholders, directors, and commissioners registered under the company to work in Indonesia by obtaining work permit (IMTA), business visa (Multiple Business Visa, Single Business Visa), and also the stay permit (KITAS). Regards to Ownership, it’s also allowed for foreigner to have 100% ownership, as long as it’s not included in the Negative Investment List.
“It's allowed for foreign investor to have up to 100% ownership as long as it's not included in the Negative Investment List.”
Then how much is the minimum capital requirement to establish PT. PMA? The Indonesia Investment Coordinating Board (known as BKPM) regulates that foreign investors must invest in PT PMA above IDR 10 billion for each business sector the PT PMA is planning to enter. Such investment can be sourced from the investors’ paid-up capital, and foreign and domestic loans.
The minimum paid-up capital of PT PMA itself is IDR2,5 billion, which must be paid to the company account after the company is established and has registered for a bank account in an Indonesian bank.
Foreign investors are given from 1-5 years to fully invest IDR 10 billion in PT PMA, depending on what business sector they are in.
Here are the document needed to establish PT PMA in Indonesia (with the estimated time):
Additional licenses and/or documents might be required for specific sectors. Accordingly, legal advice should be sought before engaging in any investment activity. Besides above documents, the shareholders should also present the deed of establishment which needs to be legalized by a public notary.
FUTHER MORE, HERE IS PROCEDURE OF ESTABLISHMENT
The standard procedure for the establishment of PT PMA is as follows:
|NO||PROCEDURE||INSTITUTION||APPROX. LEAD TIME*|
|01.||Booking and Approval of Company Name||Ministry of Law and Human Rights||2 Days|
|02.||Applying for Principle License (Temporary)||Indonesia Investment Coordinating Board (BKPM)||14 Days**|
|03.||Drafting the Articles of Association (Akta Anggaran Dasar)||Public Notary||5 Days|
|04.||Obtaining Legalization as Legal Entity (Deed of Establishment and Approval from Ministry of Law & Human Rights/MOLHR)||Ministry of Law and Human Rights||3 Days|
|05.||Obtaining Certificate of Domicile (SKDP)||District Government||7 Days|
|06.||Registering for Taxpayer Registration Number (NPWP) and Letter of Tax Registration (SKT)||Tax Office||7 Days|
|07.||Obtaining Company Registration Certificate (TDP)||Administrative City/ Regency Government||14 Days|