If you are a foreigner who wants to own and run a business in Indonesia, the usual route is a PT PMA — a foreign investment company. It lets non-Indonesians hold shares directly and operate legally, but it comes with sector rules, capital expectations and a registration process that are worth understanding before you commit.
What a PT PMA is
PT PMA stands for Perseroan Terbatas Penanaman Modal Asing — a limited liability company with foreign investment. It is the standard legal vehicle through which a foreign individual or company can own a business in Indonesia, hire staff, sign contracts, open bank accounts and, in many cases, sponsor work and stay permits for foreign directors.
A PT PMA is a separate legal person from its owners, so shareholders' liability is generally limited to the capital they put in. It differs from a local company (a plain PT), which is reserved for Indonesian shareholders, and from a representative office, which can carry out market research and liaison work but generally cannot trade or earn revenue. If you intend to actually do business and generate income, the PT PMA is normally the structure you need.
The investment list and restricted sectors
Indonesia does not open every sector to full foreign ownership. The framework that governs this is commonly called the Positive Investment List, which sets out which business activities are open, which carry conditions, and which are closed or reserved for Indonesians or for partnerships with local players.
In practice, activities tend to fall into a few broad categories:
- Open — many sectors now allow up to full foreign ownership;
- Conditional — open only with a local partner, a minimum local shareholding, a special licence, or a partnership with small and medium enterprises;
- Reserved or closed — set aside for Indonesians, for the state, or prohibited entirely.
Each activity is identified by a business classification code (the KBLI), and your permitted ownership percentage, capital and licences flow from the codes you choose. Picking the wrong code, or assuming a sector is fully open when it is conditional, is one of the most common and expensive early mistakes. These lists are revised from time to time, so a sector that was restricted a few years ago may have opened, or the reverse — confirm the current position for your exact activity with a qualified local lawyer before you plan around it.
Capital expectations
A PT PMA is generally treated as a "large" investment, and that brings capital expectations that surprise many newcomers. As a rough guide, the benchmark often quoted has been a sizeable total planned investment per business line (frequently described as excluding land and buildings), with only a portion of that needing to be issued and paid-up capital. Specific figures are easy to find online, but they change and are applied differently across sectors, so it is safer to confirm the current number than to rely on one you have read.
It also helps to read these figures correctly. A total investment value is usually a plan you commit to over time, not cash you must transfer on day one, and the paid-up capital actually deposited is typically a smaller sum. The thresholds, how they apply per KBLI code, and how strictly they are enforced have shifted over the years and can vary by sector and region. Treat any amount you come across — here or elsewhere — as approximate and potentially out of date, and confirm the current requirement for your specific activity with a qualified adviser before you budget.
The setup steps
Once you have settled the activity, ownership split and capital, incorporation follows a fairly defined path. Broadly, the stages are:
- Confirm your business activities and KBLI codes, and check the foreign-ownership rules for each;
- Reserve a company name that meets the naming rules;
- Prepare the deed of establishment and articles of association before a notary, then obtain the relevant ministry's approval of the legal entity;
- Register through the online single submission system to obtain the business identification number (the NIB) and the relevant licences;
- Complete tax registration and obtain a company tax number;
- Open a corporate bank account and arrange the capital as required;
- Deal with any sector-specific or operational permits before you start trading.
You will usually need at least two shareholders, one or more directors and a commissioner, though the exact requirements can depend on your structure. A foreign director who wants to live and work in Indonesia should plan the immigration side — work and stay permits — alongside the incorporation, rather than treating it as an afterthought, because the two are linked.
How long it takes
With a clean file and the right documents, the core registration can move relatively quickly, but realistic timelines depend on your sector, the licences involved and how fast supporting paperwork and capital arrangements come together. Build in margin rather than assuming the fastest possible case.
Staying compliant after setup
Forming the company is the start, not the finish. A PT PMA typically carries ongoing obligations: regular tax filings, periodic investment activity reports to the investment authority, bookkeeping, and renewals of licences and any foreign-worker permits. Falling behind on reporting is a frequent cause of problems for new foreign owners, so it is worth setting up a reliable local accountant and a system for deadlines from the very first month.
Getting it right
A PT PMA is a well-trodden route, and many foreigners run businesses in Indonesia through one. But the details — which sectors are open, the capital you must commit, the codes you register under and the permits that follow — change over time and turn on your exact plans. Because the rules and figures move, treat this guide as general information only, and speak to a qualified Indonesian corporate lawyer (working with a local accountant) before you incorporate, so your structure fits both the current law and what you actually intend to do.