Indonesia PMA: A Comprehensive Guide to Establishing a Foreign-Owned Company in Indonesia

Indonesia has been a hub for foreign investments due to its strategic location, abundant resources, and growing economy. In order to encourage foreign investment, the Indonesian government has created a specific type of company called a PMA, or Penanaman Modal Asing. In this article, we will discuss the ins and outs of Indonesia PMA, including the benefits, procedures, and requirements for establishing a foreign-owned company in Indonesia.

What is Indonesia PMA?

First and foremost, Indonesia PMA stands for Penanaman Modal Asing, which translates to Foreign Investment Company. This type of company is specifically designed for foreign investors who want to establish a business in Indonesia. It is regulated by the Indonesian Investment Coordinating Board, also known as BKPM, and is subject to the Indonesian Investment Law.

Benefits of Indonesia PMA

Establishing a PMA in Indonesia can provide numerous benefits for foreign investors. Some of these benefits include:1. 100% foreign ownership: Unlike other companies in Indonesia, foreign investors can have full ownership of a PMA.2. Legal certainty: PMA is regulated by the Indonesian Investment Coordinating Board, which provides legal certainty for foreign investors.3. Access to incentives: PMA can access various incentives provided by the government, such as tax allowances, import duty exemptions, and more.4. Flexibility: PMA can operate in various fields, from agriculture to telecommunications.

Procedures for Establishing Indonesia PMA

Establishing a PMA in Indonesia requires several procedures that investors must follow. Here are the steps:1. Obtain an Investment Registration Certificate from BKPM.2. Obtain a Deed of Establishment from a notary.3. Obtain a Tax Identification Number (NPWP) from the Directorate General of Taxes.4. Apply for a Business License (SIUP) from the local government.5. Apply for a Company Registration Certificate (TDP) from the local government.6. Obtain a Permanent Business License (IUT) from BKPM.

Requirements for Establishing Indonesia PMA

In addition to following the procedures above, there are also specific requirements that foreign investors must fulfill to establish a PMA in Indonesia. These requirements include:1. Minimum investment: Foreign investors must invest at least IDR 10 billion (approximately USD 700,000) in Indonesia.2. Business plan: Foreign investors must provide a detailed business plan that includes company objectives, product or service details, marketing strategy, and financial projections.3. Company structure: PMA must have at least one director and one commissioner, both of whom can be foreigners.4. Shareholders: PMA must have at least two shareholders, with at least 5% of the total shares owned by Indonesian citizens.


Establishing a foreign-owned company in Indonesia can be a profitable venture for foreign investors. PMA offers various benefits, including legal certainty, access to incentives, and flexibility. However, it also requires investors to follow specific procedures and requirements. By understanding the ins and outs of Indonesia PMA, foreign investors can establish a successful business in Indonesia.