Setting Up a PT PMA in Indonesia: Capital, KBLI and Documents

Setting up a PT PMA (penanaman modal asing, a foreign investment limited liability company) follows the requirements for an ordinary PT, plus three specific rules: the line of business must be open to foreign capital, the investment value must exceed Rp10 billion excluding land and buildings per business activity per location, and the issued and paid-up capital must be at least Rp2.5 billion. This paid-up capital figure has applied since Regulation of the Minister of Investment and Downstreaming/Head of BKPM No. 5 of 2025 (Peraturan Menteri Investasi dan Hilirisasi/Kepala BKPM Nomor 5 Tahun 2025), replacing the earlier rule that required Rp10 billion.

What a PT PMA is

Foreign investment must take the form of a limited liability company (perseroan terbatas, PT) under Indonesian law and domiciled in Indonesia (Article 5(2) of the Investment Law). As soon as any shares are owned by a foreign person or business entity, however small the portion, the PT is classified as a PMA (Article 23 Peraturan BKPM 5/2025).

Some consequences:

• A PT PMA is treated as a large business (Article 26(1)), so it cannot take up business activities reserved for micro and small businesses and cooperatives.
• Like any other PT, a PT PMA is established by at least two shareholders (Article 7 of the Company Law). Both may be foreign if the line of business is fully open.
• An individual investor's nationality is determined by the passport used at establishment; permanent residence in another country is not taken into account (Article 23(13)).

Lines of business and KBLI

The list of business lines for investment is currently set by Perpres 10/2021 (Presidential Regulation) as amended by Perpres 49/2021. In principle all lines of business are open, except those declared closed or reserved for the central government. Some lines of business carry specific requirements, for example a cap on foreign ownership, or are allocated to micro and small businesses and cooperatives. The government is preparing a replacement Perpres.

Each business activity is identified by a 5-digit KBLI code (Klasifikasi Baku Lapangan Usaha Indonesia, the Indonesian Standard Industrial Classification). Since Peraturan BPS 7/2025 (Statistics Indonesia Regulation), KBLI 2025 applies. The choice of code directly affects the foreign ownership cap, the licensing risk level, and how the investment value is calculated.

Investment value and paid-up capital of a PT PMA

Investment value and paid-up capital are two different things. The investment value is the planned total spending on the project, which may be funded from capital or other sources; paid-up capital is what the shareholders pay into the PT. The general rule of the Company Law still applies: at least 25 per cent of the authorised capital must be issued and paid up.

For a PT PMA already established, Article 395 contains transitional provisions, for example for a change of location or an extension of licences issued before this regulation. A reduction of paid-up capital does not happen automatically; if wanted, it goes through the capital reduction procedure discussed in amending a PT's articles of association.

How a PT PMA is set up

1. Check the line of business: the KBLI 2025 code, whether it is open to foreign investment, the risk level, and whether the location fits the spatial plan.
2. Prepare the foreign shareholders' documents, including legalisation or apostille and translation (see the documents section).
3. Reserve the name and sign the deed of establishment before a notary, in Indonesian. Foreign parties may attend in person or be represented by an attorney.
4. Legal entity approval through the AHU system (Directorate General of General Legal Administration), as for an ordinary PT; the process is in requirements and steps to establish a PT.
5. Registration in the OSS system (Online Single Submission) to obtain an NIB (business identification number) and licences according to risk level (PP 28/2025), including a self-declaration that the paid-up capital will not be moved for 12 months.
6. Pay in the capital to the PT's account; proof of payment is submitted electronically within 60 days at the latest from the date of the deed of establishment (Article 4 PP 8/2021).
7. Periodic obligations: the Laporan Kegiatan Penanaman Modal (LKPM, investment activity report) each quarter, no later than the 15th of the month after the quarter ends (Article 286), and work and stay permits for foreign directors or employees.

Prohibition on nominee arrangements

Article 33 of the Investment Law forbids investors from making an agreement or statement that shares in a PT are held for and on behalf of another person. Any such agreement is void by law. The shareholder structure must therefore reflect the true owners, and the beneficial owners are reported as they are.

Documents to prepare

Individual foreign shareholders

• a valid passport
• full address and, if any, an Indonesian NPWP (tax identification number)

Foreign corporate shareholders (Article 23(14))

• articles of association and proof of incorporation, legalised by the apostille authority of the home country or by an Indonesian mission
• a resolution of the competent body approving the investment and appointing a representative or attorney
• identification of the signatory, and beneficial owner details
• an Indonesian translation by a sworn translator

Indonesian shareholders

• KTP-el (electronic identity card) and NPWP, or the articles of association and approval decree if a legal entity

For the PT being established

• identification of the proposed directors and board of commissioners
• a power of attorney, if a foreign party does not attend in person, signed before a notary in their home country and then apostilled or legalised
• proof of address, proof of capital payment, and beneficial owner documents

Frequently asked questions