PT PMA is a foreign investment company that can be established in Indonesia by foreigners in Indonesia. For foreigners coming to Bali, the PT PMA is the unique type of company to establish a business in Indonesia.
PT PMA (foreign investment company)
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a limited liability company with a foreigner as a shareholder. It is the only way in Indonesia to conduct business activities and have commercial activities with properties.
A foreigner who wishes to invest in Bali needs to set up a company in order to obtain a business licence and have a commercial income. The Investment Law Number 25 of 2007 recognises the right of foreignern investors to establish a corporation in Indonesia.
Despite some wrong wording, a PT PMA is also a local PT as it is a legal Indonesian company. This PT has not to be confused with PT PMDN, which doesn’t authorise foreigners in the capital.
While the PT PMA is a legal entity, the company has limited activity based on the business activity (NIB) registered with the Indonesian authorities.
Who can establish a PT PMA?
The company can be registered by a minimum of two shareholders. The shareholders can be both individuals and legal entities.
Some activities are on a negative list, and only Indonesians are authorised to conduct these activities and or be directors of the company. For some types of business, the PT PMA is required to have a local partner, such as in construction and architecture. The negative list was updated by Regulation of Indonesia Number 20 of 2018.
The director of the company has to be an individual and is responsible for declaring the tax of the company. This director has to have a tax number called NPWP, which can be obtained as a director/ shareholder by applying for an investor KITAS or working ITAS.
Capital requirements of a PT PMA
The paid-up capital of a PT PMA is set at 10 000 000 000 IDR (10 billion). Despite the company law requiring the investor to deliver 25% of the capital, the BPKM require the investor to deliver at 100%.
The authorised capital of a PT PMA is also set at 10 000 000 000 IDR (10 billion) but can be increased with a general meeting of shareholders.
The capital of a PT PMA in Bali is also variable depending on the activity of the company. Some activities, such as logistics, mining or crypto companies, require a paid-up capital higher than 10 billion IDR.
Also read: How to Open a Representative Office in Bali
Registering a company in Indonesia has never been easier
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Reach out to the ILA team today to set up a free consultation or read more about the company registration process.
How to set up a PT PMA
The process of setting up a foreign-owned company in Bali takes a few days. However, the verification of the business licence to operate the company varies from a few days to a few weeks or even months, depending on the activity.
Requirements to set up a PT PMA
- 2 shareholders minimum: it is not mandatory to have a local person if the activity doesn’t require it
- Commercial address: the company needs to be registered with an address having an SLF in line with the business activity. Some businesses cannot be registered with a virtual office and need an office location
- Director and commissioner: the director of the company has to obtain an NPWP which can be obtained by applying for KITAS
- Accounting and Local Bank account: the company needs to register in its book its transactions
Steps to register a PT PMA in Bali
The process to register a PT PMA in Bali is easy and takes only a few days. Here are the steps to register a company in Bali.
- Provide the documents of the shareholders (passport and company document if the shareholder is another legal entity)
- Define a name for the company. The name should be at least 3 words. Some words are not accepted, such as company, limited liability, etc.
- Provide the address of the company
- Define the business activities (KBLI)
- Drafting the articles of association (Akta)
- The director and shareholders need to sign the articles of incorporation
- Registration of the company with AHU and the ministry
- Obtain the ministry approval
- Registration of the tax number (NPWP)
- Apply for the business licence and obtain the business registration number in OSS.
Legal documents of the PT PMA
The list of documents to obtain after the registration process varies on the activity of the company. However, some documents are at least similar to all types of business:
- Article of Association (AktA)
- Ministry Approval – SK Menkumkam / AHU
- NPWP Company (tax number)
- OSS Username and Password
- NIB and other licenses from OSS
Once the NIB is obtained, some activities need to verify their business activity in order to legally operate. If the status of the NIB is belum terverifikasi, other actions are necessary towards some ministry locally or nationally.
Common mistakes by opening a PT PMA
Setting up a PT PMA company in Bali is easy, but structuring the company can have some legal and tax implications. Unfortunately, some businesses are operating illegally without even knowing their situation, while other businesses could operate with more tax efficiency. It is important to think about the structure prior to the establishment and discuss it with a legal and tax consultant.
- Not optimising the shareholder structure
- Operating with the wrong business code (KBLI)
- Do not verify the NIB
- Do not report tax even if there is no income
Also read: How to Start a Company for Property Investment in Lombok
Obligations of the PT PMA
Opening a bank account
A PT PMA in Indonesia has some legal obligations that need to be considered. The director of the company has to take care of the following obligations. The company has to open a bank account in order to deliver the capital, receive the income and pay the expenses.
LKPM report and Tax
Each quarter, the company has to report its investment report to the BKPM, which is called LKPM. Additionally, the PT PMA has to provide a tax report annually, even if there is no income, and declare the withholding tax on a monthly basis if there are expenses in the company. Local and income taxes are reported on a monthly basis in Indonesia.
BPJS and Social Security
The company also has to Register 2 employees to BPJS and pay the contribution on a monthly basis.
Common misunderstanding
- A PT PMA doesn’t need a local person. Only some business activities require a local person
- Tax have to be declared even if there is no income
- Nominees are illegal in Indonesia, and using a nominee with a local PT is a risk, and no agreement can protect the foreigner.