PMA Indonesia (Penanaman Modal Asing) or PT PMA (Perseroan Terbatas Penanaman Modal Asing) is another name for a Foreign Owned Company. This is a legal corporation formed by Indonesian law through which foreign investors might choose to conduct business in Indonesia in generating revenue or profit.
A PMA company is a legal organization that allows foreign investors to invest and conduct business in the country. It has the same rights and duties as any other Indonesian corporation. The company’s owners must be at least two—either an individual or a legal body such as an investment company or the government. At least one director and one commissioner are required in the organizational structure. PMA may also hire international staff if they have the necessary permits.
Why would someone want to set up a PMA firm in Indonesia?
Indonesia has several commercial sectors that are accessible to international investment, and as a result, the value of investments has been rising quickly during the past few years. Furthermore, the Indonesian government has improved the investment procedure easier for international investors by issuing Presidential Regulation No. 10 of 2021, which includes a Positive Investment List.
Before the Presidential Law, every foreign investor should be aware of how open, partially open, or completely closed the business sector is to outside investment. The industries are placed on the Negative Investment List (Daftar Negatif Investasi or DNI). If you perceive this as an opportunity and want to produce money and profit or engage in direct sales in Indonesia, you must form a PT PMA.
Business Sectors of PMA
A PMA company is a legal organization that allows foreign investors to invest and conduct business in the country. It has the same rights and duties as any other Indonesian corporation. The company’s owners must be at least two—either an individual or a legal entity such as an investment company or the government. At least one director and one commissioner are required in the organizational structure. PMA may also hire international staff if they have the necessary permits.
- Open sectors—business sectors in which foreigners can hold 100% of the company. There are no particular requirements for creating a new PMA or starting a franchise in this industry. This group includes at least seven economic sectors: restaurants, bars, cafés, sports centers, swimming pools, football fields, and tennis courts.
- Open with a condition—refers to industries where enterprises are open to international investment but subject to specific conditions. In Indonesia, what is a PMA firm frequently referred to as a sort of sector? The share of foreign capital in the firm is determined by the industry. The average share of foreign capital is 49% or 51%, with certain industries having maximum foreign capital of 70% or 67%. This encompasses the bulk of Indonesia’s commercial sectors, such as mining and energy, hotels, and other sports facilities.
- Close sectors are areas in which private enterprise is not permitted. The sectors are often associated with state security and strategic affairs. Furthermore, the government has the authority to decide which commercial areas are closed to foreigners but available to Indonesian nationals. Since 2016, this sector has included tour and travel as well as guide services.
You may be interested to read Get To Know Indonesia Visa Requirements
Who can establish PT PMA Company?
Foreign persons or organizations may form a PT PMA company, become shareholders, and hold up to 100% of the company’s equity. In contrast to PT PMDN, only local persons or businesses can hold 100% ownership.
In general, a PT PMA company must include at least:
- 1 Director; a foreigner can become a director in a PT PMA and obtain the KITAS (stay permits).
- 1 Commissioner; the commissioner may be a native or a foreigner. A commissioner’s primary responsibility is to supervise and monitor the work of the business’s directors and to guarantee that every activity initiated by the company is in order and in accordance with the company’s objectives.
- 2 shareholders; Every PMA company, whether a human or a legal entity, shall have at least two shareholders.
Regulation for PMA Company
The Investment Negative List will help you learn which company areas are now available for PMA. The President Regulation Number 44 of 2016 is the most recent regulation on the list. This rule specifies the status of certain economic sectors in terms of their openness to foreign finance.
Other Indonesian legislation pertaining to foreign-owned companies in Indonesia include the Capital Investment Law Number 25 of 2007 and the Head of Investment Coordinating Board Regulation Number 14 of 2015. These regulations will reveal “what is PMA company in Indonesia.” It will also be noted that the PMA firm needs get specific permits before beginning operations in Indonesia. Furthermore, a PT PMA must have a minimum of IDR10 billion, of which 25% must be paid before the company is registered with the Indonesian government.
HOW CAN EVISA BALI HELP YOU?
You should look for skilled and reputable attorneys or legal advisors for guidance and help in guaranteeing your legal compliance with investment legislation in order to ensure a smooth investment and business operation from a legal viewpoint while also focusing on building your business in Indonesia and reaching your revenue objective.
E-Visa Bali is your trusted consulting service from Bali, Indonesia. We provide quality services to complete all your needs as quickly and affordable as possible in accordance with Indonesian regulations.
Don’t hesitate to contact us too at +6287788 5000 99 or email us at [email protected] for more information.
