Procedure for Establishing a Foreign Investment Company (PMA) That Soon-to-be Entrepreneurs Must Know
Indonesia is one of the countries that attract foreign investors to conduct business. However, for entrepreneurs wishing to establish a company with foreign capital or a Foreign Investment Limited Liability Company (PT PMA), there are a series of establishment procedures that must be fulfilled to ensure the business operates legally and in accordance with regulations.
From documentation to licensing, the following are the steps that must be carried out in the procedure for establishing a PMA in Indonesia.
Ensuring Completeness of Documents
Before applying for the establishment of a PT PMA, ensure that all required documents are complete. The main documents required include:
- Shareholders’ identification card (for Indonesian citizens) or passport (for foreign nationals)
- Shareholders’ Taxpayer Identification Number (NPWP)
- Deed of establishment of the company
- Business domicile certificate
- Cooperation agreement (if there is more than one investor)
- Residential address (abroad)
- Phone number
These documents must be prepared and adjusted in accordance with applicable provisions so that the registration process runs smoothly.
Meeting Investment and Capital Requirements
PT PMA is subject to specific provisions concerning investment and capital that must be met. These requirements include:
- A minimum capital of IDR 10 billion per business sector
- At least 25% of the capital must be paid up before the PT PMA can be registered
- The selected business sector must comply with the Negative Investment List (DNI), which regulates sectors open to foreign investment
Understanding these capital regulations will assist investors in preparing their business funding strategies.
PT PMA Must Have a Business Identification Number (NIB) and Other Business Licenses
The Business Identification Number (NIB) is a basic corporate identity issued through the OSS (Online Single Submission) system. This NIB serves as:
- Company Registration Certificate (TDP)
- Importer Identification Number (API), if the company engages in import activities
- Access to licenses to operate in Indonesia
In addition to the NIB, a PT PMA must also have business licenses appropriate to its field, such as an industrial license, environmental license, or other specific licenses depending on the business sector.
Completing Required Special Licenses
Certain types of business in Indonesia require additional licensing. For example:
- Businesses in the food and beverage sector require a BPOM license
- Property or construction businesses require a license from the Ministry of Public Works and Housing (PUPR)
- Financial-related businesses require a license from the Financial Services Authority (OJK)
Ensuring that all special licenses have been obtained will help avoid legal issues in the future.
Other Requirements: Principal License, Investment, and Capital Registration
In addition to the main documents and licenses, foreign investors must also obtain a principal license from the Indonesia Investment Coordinating Board (BKPM). This license signifies government acknowledgment of the foreign investment. The steps in the investment registration process include:
- Submitting a principal license application through OSS
- Presenting an investment plan and business feasibility
- Paying initial capital as required
- Registering capital ownership with the Ministry of Law and Human Rights
With the principal license approved, the PT PMA may proceed to the operational stage.
Licensing Procedure for PT PMA at BKPM
BKPM is the institution responsible for regulating foreign investment in Indonesia. The PT PMA licensing process through BKPM includes:
- Submission of the Deed of Establishment of PT PMA to a notary
- Registration with the Ministry of Law and Human Rights to obtain legal entity status
- Application for NIB through OSS
- Company tax and NPWP registration
- Application for business license according to the business field
Once all stages are completed, the PT PMA may officially commence operations and conduct business in its respective field.
The procedure for establishing a PMA in Indonesia requires compliance with document, capital, licensing requirements, and registration with BKPM and OSS. By understanding all these stages, investors can ensure that their business operates according to regulations and grows in the Indonesian market.
If you require assistance in the process of establishing a PMA, Elmar Consultant Business Indonesia is ready to assist at every stage of licensing and business legality. Contact us now for further consultation!
