How to Register a Foreign Company (PT PMA) in Indonesia: Seamless Path to Entry the Market

Indonesia, Southeast Asia’s largest economy, continues to attract foreign direct investment (FDI) with its vast market, abundant resources, and growing middle class. According to BKPM in 2024, Indonesia secured over USD 50 billion in FDI, with the digital economy, renewable energy, and manufacturing leading the way. To enter the Indonesian market legally and securely, establishing a Foreign-Owned Limited Liability Company (PT PMA) is the most recognized vehicle.

This guide provides a comprehensive, step-by-step explanation of how to register a PT PMA in 2025, with insights tailored to foreign investors and legal advisors.

What Is a PT PMA?

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a limited liability company with foreign ownership, governed by Investment Law No. 25/2007. It is the standard vehicle for foreigners to legally conduct business activities, hire employees, and generate profit in Indonesia.

Key Requirements for Establishing a PT PMA

1. Minimum Capital Requirement

To be classified as a foreign company, the minimum total investment must be IDR 10 billion (approximately USD 650,000), with at least IDR 10 billion as paid-up capital as stated in Perka BKPM no 4 year 2021. This requirement ensures the government attracts serious, long-term investors.

2. Allowed Business Sectors

Indonesia’s Positive Investment List determines which sectors are open to foreign ownership, partially restricted, or closed. Investors must ensure their intended business activity is not on the restricted list under the recent regulation, Presidential Regulation No. 49 year 2021.

3. Legal Company Structure

A PT PMA must have:

• A minimum of two shareholders, which can be individuals or legal entities
• At least one director and one commissioner. We strongly recommend having at least one local Director for ease of obtaining NPWP and only 1 foreign Director with a valid ITAS/ITAP.
• A local registered office address to receive legal documents and comply with domicile requirements.

Step-by-Step Process to Register a PT PMA in Indonesia

1. Prepare the Deed of Establishment

A public notary drafts the Articles of Association (AOA), defining the company’s structure, capital, operations, and company name reservation. The deed is submitted electronically and legalized by the Ministry of Law and Human Rights, giving the entity legal standing. 

2. Obtain NPWP (Tax ID) via Coretax

Secure NPWP through the Coretax web platform, as it is an essential precursor to obtaining your NIB.

3. Obtain Business Identification Number (NIB) via OSS

The Online Single Submission (OSS) system generates an NIB, which acts as the company’s official ID. It also functions as a general business license and, if applicable, an import-export permit.

4. Apply for Sectoral Licenses

Depending on your business activity, you may need licenses from other ministries (e.g., BPOM for food/cosmetics, Ministry of Health, or Ministry of Trade). The OSS platform will route your application to the correct authority based on your risk profile and KBLI classification.

5. Open a Corporate Bank Account

You can open a company bank account with a licensed Indonesian bank after all the company documents have been obtained. This account will be used to inject capital and process business transactions.

6. Inject Capital and Submit Investment Activity Report

Investors must show proof of capital injection, either via transfer or notarial statement, and submit an Investment Activity Report (LKPM) to BKPM regularly to maintain compliance.

Timeline of PT PMA Registration

Common Pitfalls to Avoid

Even though the registration process appears streamlined, foreign investors—especially first-timers—often fall into avoidable traps:

1. Entering a Sector That Is Restricted to Foreigners

Not all business sectors are open to foreign investment. Many fail to check the Positive Investment List thoroughly and end up with rejected applications or forced restructuring.

2. Using an Ineligible Office Address

Virtual offices or co-working spaces are sometimes not recognized by the local government (Pemda) for domicile letters, which are mandatory for license processing. Ensure your business address complies with local zoning and building regulations. Especially in Jakarta, no domicile letter is required. The eligible location depends on the zoning, and as long as the zoning is feasible for business and office, it is fine.

3. Delaying Capital Injection

Delays in injecting the paid-up capital post-formation can influence the annual tax return to the tax office.

4. Ignoring Employment and Immigration Obligations

Many foreign founders are unaware that they cannot simply work under a shareholder role. A separate work permit depends on the role and position, as well as a stay permit (KITAS/KITAP) is required for operational involvement. The same applies to hiring expatriates.

5. Assuming OSS Approval Equals Full Compliance

NIB issuance is not the end of the compliance process. Additional sectoral licenses, tax registration, and periodic reporting are still mandatory. Lack of follow-through can lead to legal and operational issues.

Is PT PMA the Right Vehicle for You?

For foreign investors seeking long-term presence, full control, and credibility in Indonesia, the PT PMA remains the most reliable and legally recognized structure. While the OSS system has made entry faster, compliance remains complex and requires careful attention.

It’s highly recommended to consult with local legal and regulatory experts, such as Business Hub Asia, to ensure your market entry strategy aligns with Indonesia’s evolving business climate.