Elmar

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PMA Establishment

Foreign-Owned Companies (PT PMA) or Representative Offices are two of the most prevalent choices for entrepreneurs. Each offers advantages, but your plans for growing your business may dictate which one is best for you.

About-Us-PMA

PMA Establishment!

What is PMA?

Law No. 25/2007 defines PT PMA as an enterprise in which foreign investors, companies, or governments have a controlling interest within Indonesian territory. The PT PMA rules are legitimized by Company Law No. 40/2007. To be considered a foreign corporation, ownership of any percentage of the enterprise outside the country is acceptable.

 

On the other hand, foreign investment can be defined as an investment by which foreign investors carry on business within the territory of the Republic of Indonesia, either solely through foreign investment or in a joint venture with domestic investors, following Law No. 25/2007 concerning Capital Investment (the “Investment Law”).

 

It makes no difference whether the two shareholders are natural persons or corporations. There must be at least two foreign nationals, an overseas firm with an Indonesian stakeholder, and an Indonesian legal presence for PT PMA to exist.

Benefit PMA Establishment

The Permit to employ foreign workers in Indonesia can be sponsored and issued by a corporation with foreign ownership to foreign nationals working for the firm. As a bonus, it may provide business official approval to the destination country sponsorship for clients and partners who must visit Indonesia for a limited time.

Instead of using an Importer of Record, registering your items with your PT PMA will simplify your company operations in Indonesia.

Your firm may apply for a wide range of an agreement in which the rights holder grants permission to another party to use their rights and permits after you have a PT PMA, giving you more options for expanding your operations and diversifying your holdings.

Many international companies must import goods or materials from outside, necessitating import tax payment.

Consequently, if you own and operate a PT PMA in Indonesia, you may take advantage of the lower import tariffs afforded to PT PMAs by using the qualified tax benefits they provide. As a result of reduced tax rates, a PT PMA may save a significant amount of money and boost its bottom line.

Benefit PMA Establishment
What You Need to Know Before Starting a PMA

What You Need to Know Before Starting a PMA

Since the Negative Investment List in Indonesia is binding on foreign investors, familiarizing oneself with it is a prerequisite to doing business there. Although most industries in Indonesia are now open to 100% foreign investment, this document will give investors insight into the few that still limit the maximum percentage of foreign ownership.

Since the passing of Presidential Law No. 10 in 2021, the following industries have been banned:

  • Class I Drugs
  • Casino and/or gambling
  • Harvesting of certain fish species
  • Chemical weapons
  • Use and removal of natural coral reefs

One of the businesses that are only partly open is the Palm Oil industry. You’ll need a local investor to begin a business in this area.

Foreign investors can hold 100% of the stock in certain industries without needing to meet specialized criteria.

Benefits of Merger & Acquisition
Benefits of Merger & Acquisition
Benefits of Merger & Acquisition

The Process of Setting Up a Company in Indonesia

Here are the steps required to set up PMA:

Step 1

Submit an application for your proposed company name to the Ministry of Law and Human Rights for review. If your suggested name is not accepted, they will give you a choice of reasons why such as a similar name may already exist or may be deemed impolite in Indonesia.

Step 2

Start registering your investment with the Indonesia Investment Coordinating Board (BKPM). BKPM has the authority to accept, evaluate, and accept or reject your investment application and proposal.

Step 3

When BKPM is satisfied that an investment complies, they will issue an agreement in which the rights holder grants permission to another party to use their rights good for one year, with the option to renew for a further two years.

Step 4

After that, you’ll need to see a notary public and get your company’s Articles of Association (Akta Perusahaan) authenticated by the Ministry of Law and Human Rights.

Step 5

In addition, you will require a Certificate of Domicile, Tax Registration Number (NPWP), Company Identification Number (Nomor Izin Berusaha), and Ratification of Legal Entity (SK Kehakiman) (NIB).

Step 6

A commercial and tourist business agreement in which the rights holder grants permission to another party to use their rights, among others, may be necessary before a firm may open its doors to the public.

Nominee Service

Nominee Service

A nominee service, also known as nominee director or nominee shareholder service, is a legal arrangement where a person or a company is appointed as a nominee to hold certain assets or positions on behalf of another individual or entity. The nominee, in this case, acts as a representative or agent for the actual owner but does not have any real decision-making power or control over the assets or positions.

 

The appointment of a nominee director is legally recognized in Indonesia. However, it's important to note that the use of nominee directors in Indonesia, as in any jurisdiction, must be conducted in compliance with local laws and regulations.

 

It is crucial to conduct thorough due diligence and seek professional advice when selecting a nominee consultant. With over ten years of expertise, Elmar Consultant will help you make an informed decision based on your specific requirements, ensuring a reliable and compliant nominee arrangement.

Contact Us

Contact Us For Consultation

With over ten years of expertise, Elmar Consultant is the best choice if you need a business service to guide you through the process. We will guide you and help you set up the PMA. Get the finest advice possible as you make a wise investment in Indonesia. 

The success of your business is our top priority, and Elmar Consultant will get your company off to a great start.