Frequently Asked Questions: #investmentindonesia

The minimum capital requirements for a PMA (Penanaman Modal Asing) company in Indonesia are set by Ministry of Investment and Downstream Industry/BKPM Regulation No. 5 of 2025 (in force since October 2025):

• Total Investment Value: The minimum investment plan for a PMA company is more than IDR 10 billion (approximately USD 600,000) per 5-digit business classification (KBLI) per project location, excluding land and buildings.

• Issued and Paid-up Capital: The minimum issued and paid-up capital is IDR 2.5 billion per company — reduced from the IDR 10 billion that applied between 2021 and 2025.

• 12-Month Holding Requirement: The paid-up capital must be deposited into the company’s Indonesian bank account and remain there for at least 12 months after deposit.

• Joint Ventures: For joint ventures with Indonesian partners, the paid-up capital requirement applies to the company as a whole, with shares held in proportion to each party’s ownership percentage.

• Sector Exceptions: Some business activities calculate the investment value differently — for example, wholesale trade per 4-digit KBLI, and food and beverage services per 2-digit KBLI per location — and some sectors set higher thresholds. It’s essential to check the specific rules for your industry.

• Proof of Capital: Shareholders sign a capital statement, and the paid-up capital must be deposited in an Indonesian bank account under the company’s name.

• Gradual Investment: The IDR 10 billion investment plan is a commitment realized over time as the business develops — it does not need to be deposited up front. Realization is reported to the Ministry of Investment through periodic investment activity reports (LKPM).

• Capital Increases: Companies can start with the minimum required capital and increase it later as needed.

It’s important to note that these requirements may be subject to change, and certain business sectors or special economic zones might have different capital requirements. Always consult with a qualified professional or the relevant Indonesian authorities for the most up-to-date information regarding your specific business case.

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Yes, but far fewer than in the past. Foreign ownership conditions are set by the Positive Investment List (Presidential Regulation No. 10/2021, as amended by No. 49/2021), which in 2021 replaced the old Negative Investment List (DNI). The default is now openness: all business sectors are open to 100% foreign ownership unless specifically listed otherwise. Here are the main points to understand:

• The Positive Investment List categorizes business sectors into four main groups:

  • Fully open sectors: The default — open to 100% foreign ownership
  • Conditionally open sectors: Open to foreign investment with certain conditions, such as ownership caps or special licensing (e.g. postal services, domestic air transport)
  • Sectors reserved for, or requiring partnership with, cooperatives and micro, small and medium enterprises (MSMEs)
  • Closed sectors: Not open to any investment

• The closed list is short, covering activities such as:

  • Gambling and casinos
  • Cultivation of class-I narcotics
  • Capture of protected species and coral extraction
  • Chemical weapons production
  • New alcoholic-beverage manufacturing

• Many sectors that were restricted under the old DNI are now fully open — for example, restaurants, bars, spas and travel agencies can now be 100% foreign-owned

• Your business activities are defined by KBLI codes selected during registration in the OSS (Online Single Submission) system, which checks compliance with the Positive Investment List automatically

• Even in fully open sectors, there may be additional regulations or licensing requirements that affect foreign investors

• The list is periodically updated by the Indonesian government, so it’s crucial to check the most recent version when planning your investment

• It’s highly recommended to consult with legal experts or investment advisors familiar with the current regulations before proceeding with your investment plans

• The full list and detailed explanations can be found via the OSS system and the Ministry of Investment and Downstream Industry (BKPM) website, or through authorized investment consultants

Always verify the current status of your intended business sector under the Positive Investment List before proceeding with PMA company establishment to ensure compliance with Indonesian foreign investment regulations.

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Okusi Associates can provide comprehensive assistance in setting up a PMA (Penanaman Modal Asing) company in Indonesia through the following services:

• Investment Planning: Checking the Positive Investment List (Perpres 10/2021 jo. 49/2021) to confirm your business sector is open to foreign investment and advising on any ownership conditions.

• Document Preparation: Assisting with the preparation of required documents such as Articles of Incorporation, Deed of Establishment, and Investment Plan.

• Application Submission: Helping submit the investment registration through the OSS (Online Single Submission) system under the Ministry of Investment and Downstream Industry (BKPM).

• License and Permit Acquisition: Guiding you through obtaining necessary licenses and permits, including:

  • Business Identification Number (NIB)
  • Tax Identification Number (NPWP)
  • Risk-based business licenses via OSS

• Bank Account Setup: Assisting with opening a corporate bank account in Indonesia.

• Social Security Registration: Helping register your company and employees for BPJS (social security and health insurance).

• Ongoing Compliance Support: Providing services for:

  • Accounting and Tax Reporting
  • Payroll Management
  • Corporate Secretarial Services

• Work Permits and Visas: Assisting with obtaining ITAS/KITAS stay permits and RPTKA ratification (the work permit) for foreign employees; re-entry permission is included in the electronic ITAS.

• Professional Shareholder Services: Providing a professional shareholder as a temporary placeholder where Indonesian shareholding is required.

• Company Domicile Services: Providing virtual office services for company registration purposes.

• Post-Establishment Support: Offering ongoing assistance with:

  • Legal and regulatory compliance
  • License renewals
  • HR consultancy
  • Business expansion strategies
  • Product registration
  • Intellectual property protection

By leveraging Okusi Associates’ expertise, you can navigate the complex process of establishing and operating a PMA company in Indonesia more efficiently, ensuring compliance with local regulations and optimizing your business operations.

#PMAcompany   #companyEstablishment   #investmentIndonesia   #businessRegistration   #workPermitRequirements   #corporateServices  

Setting up a business in Indonesia offers several benefits for foreign investors:

• Large and Growing Market: Indonesia is the largest economy in Southeast Asia with a population of over 270 million, providing access to a vast consumer base.

• Strategic Location: Positioned at the crossroads of the Pacific and Indian Oceans, Indonesia offers excellent access to other Asian markets.

• Rich Natural Resources: The country is abundant in natural resources, including oil, gas, minerals, and agricultural products.

• Young Workforce: Indonesia has a large, young, and increasingly skilled workforce, providing a valuable talent pool for businesses.

• Improving Infrastructure: Ongoing infrastructure development is enhancing connectivity and logistics across the archipelago.

• Economic Stability: Indonesia has maintained relatively stable economic growth over the past decades.

• Government Incentives: The government offers various incentives for foreign investors, including tax holidays and allowances in certain sectors.

• Digital Economy Growth: Rapid adoption of digital technologies is creating new business opportunities, especially in e-commerce and fintech.

• Tourism Potential: Indonesia’s diverse culture and natural beauty make it a prime destination for tourism-related businesses.

• ASEAN Membership: As part of ASEAN, Indonesia provides access to a broader regional market through various free trade agreements.

• Improving Ease of Doing Business: Recent reforms have aimed at simplifying business processes and reducing bureaucracy.

• Cultural Diversity: The country’s cultural richness can be leveraged for various business opportunities, from creative industries to niche markets.

Before proceeding with any investment plans, it’s crucial to consult the Positive Investment List (Perpres 10/2021 jo. 49/2021) to confirm the conditions applying to your intended business activity — most sectors are now fully open to foreign investment, though a small number remain closed, conditional, or reserved for partnership with MSMEs.

#investmentIndonesia   #businessFriendlyEnvironment   #growingMiddleClass   #diversifiedEconomy   #FDIcompany  

No. Shareholding in an Indonesian company carries no obligation to hold any Indonesian visa or stay permit. A foreigner may own shares in a PT PMA while living permanently in Australia, Singapore or anywhere else, visiting Indonesia (if at all) on ordinary visit visas.

An investor KITAS exists for the opposite case: a shareholder who wants to live in Indonesia on the strength of their investment. It is a right, not a duty. The company must still meet its own obligations — capital, licensing, tax and LKPM reporting — but these attach to the company, not to the shareholder’s immigration status.

Points that matter for the passive-shareholder structure:

• Directors are different. A director who actually manages the company from within Indonesia needs proper status and work authorisation. A foreign director who genuinely remains abroad and exercises the role remotely is a common arrangement, but the company then needs practical management on the ground — which is where a resident director, or properly-scoped local management, comes in.
• Signing and banking. Bank account opening, tax administration (Coretax access) and various filings are far simpler with someone locally authorised. Powers of attorney solve some of this; they do not solve all of it.
• Visits. Attending shareholder meetings or inspecting your investment falls within business-visit activities — no work permit needed.

So a small spa or villa company can lawfully have a foreign passive owner abroad and a local partner running operations, with no KITAS anywhere in the structure. What that structure cannot do is dodge the company-level capital and licensing requirements, which apply regardless of where the shareholders sleep.

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Both, at different moments — and the distinction causes more confusion than any other part of PMA establishment.

At licensing (OSS/NIB stage): the paid-up capital of IDR 2.5 billion is evidenced by a self-declaration (pernyataan mandiri) stored electronically with the business identification number. No bank statement is demanded at this point. The declaration commits the company not to move the capital out of its account for twelve months — with exceptions for asset purchases, construction and normal operations, which is to say the money may be used, just not repatriated.

Under company law: at least 25% of authorised capital must be issued and fully paid, with valid proof of deposit filed electronically with the Ministry of Law within 60 days of the deed of establishment. This is a hard deadline with real evidence attached — the money must actually arrive in the company’s account.

The investment plan (more than IDR 10 billion per KBLI per location, excluding land and buildings) is a commitment realised over time and reported through quarterly LKPM filings — it is not a deposit at all.

So the accurate summary: the IDR 2.5 billion is real money that must be deposited and evidenced within the company-law deadline; the IDR 10 billion-plus is a spending commitment, not a transfer. Any adviser telling you the whole thing is “just a declaration” is describing the licensing screen, not the law.

Full analysis in our guide: PMA capital requirements.

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Several routes allow older foreigners to live in Indonesia long-term, each with different financial requirements and rights:

• Silver-hair visa, 5 years (E33E) — for retirees aged 55+, self-guaranteed (no sponsor), with an income test and a state-bank deposit commitment
• Silver-hair visa, 1 year (E33F) — the one-year variant: no large deposit, but a guarantor in Indonesia and annual renewal
• Second Home visas (wider E33 family) — for those qualifying by substantial deposit or investment rather than age
• Golden Visa (E28 series) — investment-based stay permits of 5 or 10 years, qualified by government bonds, listed shares, deposits or company investment
• Spouse-sponsored KITAS/KITAP — for those married to Indonesian citizens

The practical questions retirees ask most — whether the qualifying deposit applies per person or per couple, whether property or government bonds can substitute for a bank deposit, and how extension works after the initial period — depend on the specific visa index and on regulations that have been revised repeatedly since 2023. Do not rely on figures from older agent websites; several widely-circulated numbers are no longer current.

None of these permits allows employment in Indonesia. Unpaid community activity is generally acceptable; anything resembling work for an Indonesian entity is not.

Okusi Associates assesses which route fits your age, finances and family situation, and confirms the current financial thresholds before you commit. Applications can be handled through our Jakarta, Bali or Batam offices.

#visaRequirements   #retirementVisa   #familyVisa   #investmentIndonesia  

Every Indonesian limited-stay permit (KITAS/ITAS) requires a sponsor or guarantor. Without an employing company, the realistic routes are:

• Your own company. Establishing a PMA company and holding shares at the qualifying level supports an investor KITAS — the most common route for entrepreneurs. The company you own becomes your sponsor.
• An Indonesian spouse. Marriage to an Indonesian citizen supports a spouse-sponsored KITAS, and in time KITAP.
• A family principal. Spouses and children of a KITAS holder can hold dependent permits derived from the principal’s.
• Visas with no local sponsor requirement in the conventional sense. The remote-worker (E33G), second-home (E33E) and golden-visa (E28) streams are qualified by income, deposit or investment rather than by an Indonesian employer.
• Appointed guarantors. In defined cases — for example transferring sponsorship (alih penjamin) away from a spouse after divorce or bereavement — a corporate guarantor can take over an existing permit. Whether this is available depends on the permit type and circumstances.

What does not exist is a lawful “sponsorship for hire” where an unrelated company sponsors a work KITAS for someone who will not actually work for it. Such arrangements are a compliance risk for both parties, and immigration looks for them.

Okusi Associates’ role is to match the situation to the right stream — investor, family, remote-worker, retirement — and act as the processing agent. For clients establishing companies, sponsorship flows naturally from the PT.PMA structure.

#KITAS   #visaRequirements   #familyVisa   #investmentIndonesia  

Yes, a foreign investor can obtain a KITAS (Kartu Izin Tinggal Terbatas, or Limited Stay Permit Card) without a job offer in Indonesia. This is possible through the following methods:

• Investor KITAS: Foreign investors who own shares in a PMA (Penanaman Modal Asing) company can apply for an Investor KITAS. This type of KITAS is not tied to employment but to the individual’s status as a shareholder in the Indonesian company.

• Requirements for Investor KITAS:

  • The foreigner must be a shareholder in a PMA company
  • The company must be properly established and registered in Indonesia
  • The foreigner must personally hold shares of at least Rp 10 billion in the PMA company, the current requirement for the Investor KITAS (visa index E28A)

• Benefits of Investor KITAS:

  • Allows the investor to stay in Indonesia for extended periods
  • Provides the ability to act as a director or commissioner of the company
  • Does not require a separate work permit (RPTKA ratification) for working in the invested company

• Alternative: Retirement KITAS:

  • For individuals aged 55 or older
  • Allows long-term stay without employment
  • Requires proof of pension or sufficient funds to support oneself

• Process:

  • Establish or invest in a PMA company
  • Prepare necessary documents (company registration, proof of investment, etc.)
  • Apply for the Investor KITAS through the immigration authorities
  • May require assistance from a sponsor company or agent

• Duration:

  • Initially granted for 1 or 2 years
  • Can be extended as long as the investment remains active

• Limitations:

  • Investor KITAS holders are generally restricted from working for companies other than the one they’ve invested in
  • Regular reporting and compliance with immigration regulations is required

It’s important to note that immigration regulations can change, and the process can be complex. Working with a professional service provider experienced in Indonesian immigration matters is advisable to ensure compliance and smooth processing of the Investor KITAS application.

#KITAS   #foreignInvestmentIndonesia   #PMAcompany   #visaRequirements   #investmentIndonesia  

The duration of a due diligence process for an Indonesian company can vary depending on several factors:

• Scope of Due Diligence: A comprehensive due diligence typically takes 2-4 weeks, but can extend to 6-8 weeks for more complex cases.

• Company Size and Complexity: Larger companies with multiple subsidiaries or diverse operations may require more time.

• Data Availability: The process can be expedited if the target company has well-organized and readily available documentation.

• Type of Due Diligence:

  • Legal due diligence: 2-3 weeks
  • Financial due diligence: 3-4 weeks
  • Tax due diligence: 2-3 weeks
  • Operational due diligence: 2-4 weeks

• Cooperation of the Target Company: Timely responses and access to information can significantly impact the timeline.

• Regulatory Considerations: Certain industries may require additional regulatory checks, potentially extending the process.

• Red Flags: If issues are uncovered during the initial review, further investigation may be necessary, prolonging the timeline.

Factors that can expedite the process:

• Pre-due diligence preparation by the target company
• Engagement of experienced local professionals familiar with Indonesian business practices
• Clear communication and coordination between all parties involved

It’s important to note that while a thorough due diligence process takes time, it’s crucial for identifying potential risks and ensuring a sound investment decision in the Indonesian market.

#dueDiligence   #investmentIndonesia   #regulatoryCompliance   #riskAssessment  

Okusi Associates offers comprehensive project management services for setting up a manufacturing facility in Indonesia. These services typically include:

• Feasibility Study: Assessing the viability of the project, including market analysis, location scouting, and financial projections.

• Regulatory Compliance: Ensuring all necessary permits and licenses are obtained, including environmental impact assessments if required.

• Company Establishment: Handling the PMA company setup process, including checking the Positive Investment List (which replaced the Negative Investment List in 2021) for any conditions on foreign ownership in the manufacturing sector.

• Land Acquisition: Assisting with land purchase or lease negotiations, due diligence on property titles, and zoning compliance.

• Factory Design and Construction: Coordinating with architects, engineers, and contractors to oversee the design and construction process.

• Equipment Procurement: Helping source and import necessary machinery and equipment, including handling customs clearance.

• Human Resources: Recruiting key personnel, developing HR policies, and ensuring compliance with Indonesian labor laws.

• Supply Chain Setup: Establishing relationships with local suppliers and setting up logistics networks.

• Financial Management: Assisting with capital budgeting, financial forecasting, and setting up accounting systems.

• Legal Support: Providing ongoing legal advice on contracts, intellectual property protection, and regulatory compliance.

• Liaison with Government Agencies: Facilitating communication and compliance with relevant government bodies.

• Risk Management: Identifying potential risks and developing mitigation strategies.

• Timeline and Milestone Management: Creating and monitoring project timelines to ensure timely completion.

• Quality Control: Implementing quality management systems to meet international standards.

• Environmental Compliance: Ensuring the facility meets all environmental regulations and standards.

• Technology Transfer: Assisting with any technology transfer processes required for the manufacturing operation.

• Operational Setup: Helping establish operational procedures and systems for the manufacturing facility.

These services can be tailored to meet the specific needs of your manufacturing project in Indonesia. Okusi Associates would work closely with you to understand your requirements and provide a customized project management solution.

#projectManagement   #manufacturingIndonesia   #regulatoryCompliance   #PMAcompany   #investmentIndonesia  

Okusi Associates provides sector-specific market analysis for various industries in Indonesia. Our specializations include:

• Tourism and Hospitality
• Real Estate and Property Development
• Creative Industries
• Digital and IT Services
• Health and Wellness
• Education and Training
• Manufacturing
• Renewable Energy
• Agriculture and Agribusiness
• Retail and E-commerce

Our market analysis services typically cover:

• Market size and growth potential
• Competitive landscape
• Regulatory environment and compliance requirements
• Consumer behavior and trends
• Investment opportunities and challenges
• SWOT analysis
• Economic and political factors affecting the sector

We tailor our analysis to the specific needs of each client, considering factors such as:

• The client’s business model and objectives
• Target market segments
• Geographic focus (e.g., specific regions or cities in Indonesia)
• Short-term and long-term business goals

Our team of experts utilizes various research methodologies, including:

• Primary research (interviews, surveys, focus groups)
• Secondary research (industry reports, government data, academic studies)
• Data analytics and trend analysis
• Benchmarking against industry best practices

To ensure the most accurate and up-to-date information, we:

• Regularly update our knowledge base on sector-specific regulations
• Maintain relationships with industry experts and government officials
• Monitor changes in the Positive Investment List (Perpres 10/2021 jo. 49/2021) and OSS risk-based licensing rules that may affect foreign investment in specific sectors

For detailed information on our market analysis services, including pricing and turnaround times, please refer to the Okusi Associates website or contact our office directly.

#marketIntelligence   #industryAnalysis   #investmentIndonesia   #businessSectors   #regulatoryCompliance