Frequently Asked Questions: #minimumcapitalrequirements

The minimum capital requirements for establishing a PMA (Penanaman Modal Asing) company in Indonesia are as follows:

• Total Investment Value: The minimum total investment value for a PMA company is IDR 10 billion (approximately USD 670,000), excluding land and buildings.

• Issued and Paid-up Capital: The minimum issued and paid-up capital is IDR 2.5 billion (approximately USD 167,000).

• Foreign Ownership: If the company is 100% foreign-owned, the entire IDR 2.5 billion must be paid up.

• Joint Venture: In case of a joint venture with local partners, the foreign share must be at least IDR 10 million (approximately USD 670) per shareholder.

• Proof of Capital: The paid-up capital must be deposited in an Indonesian bank account under the company's name and proven with a bank statement.

• Capital Increase: The remaining IDR 7.5 billion of the total investment value can be gradually injected over time, typically within 1-3 years, depending on the business plan submitted to BKPM (Investment Coordinating Board).

• Exceptions: Some business sectors may have higher minimum capital requirements. It's essential to check the specific regulations for your intended business activity.

• KBLI Codes: The capital requirements may vary depending on the KBLI (Indonesian Standard Industrial Classification) codes of your business activities.

Remember that these figures are subject to change, and it's always advisable to consult with a professional or check the latest regulations from BKPM for the most up-to-date information on capital requirements for PMA companies in Indonesia.

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A PMA (Penanaman Modal Asing) company is a type of limited liability company in Indonesia that allows foreign ownership and investment. Key features include:

• It is an Indonesian legal entity that can have any amount of foreign share ownership, from partial to 100% foreign-owned.

• PMA companies are established based on a defined business activity and require approval from the Indonesian Investment Coordination Board (BKPM).

• They allow foreign investors to legally conduct business, generate income, and own assets in Indonesia.

• The percentage of foreign ownership allowed depends on the business sector, as regulated by the Negative Investment List (DNI).

• PMA companies must comply with Indonesian laws and regulations, including obtaining necessary licenses and permits to operate.

• There are minimum capital requirements, generally IDR 10 billion (around USD 700,000) in total investment.

• They can sponsor work permits (KITAS) for foreign employees.

• PMA companies provide foreign investors with legal protection under Indonesian law.

• They allow access to Indonesia's large consumer market of over 270 million people.

• PMA status is required for foreign entities to legally enter many regulated business sectors in Indonesia.

Overall, a PMA company is the primary vehicle for foreign direct investment in Indonesia, allowing foreign investors to establish a legal presence and conduct business activities in the country.

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A PMA (Penanaman Modal Asing) company is a foreign direct investment entity in Indonesia that allows foreign investors to own and operate a business in the country. Key points about PMA companies include:

• Legal structure for foreign investment in Indonesia
• Allows foreign ownership of businesses, subject to certain restrictions
• Regulated by the Indonesian Investment Coordinating Board (BKPM)
• Must comply with the Negative Investment List (DNI) which outlines sectors open or restricted to foreign investment
• Requires a minimum investment amount, typically around USD 700,000 (though this can vary)
• Offers benefits such as the ability to sponsor foreign work permits and conduct business activities across Indonesia
• Subject to specific tax regulations and reporting requirements for foreign-owned entities
• May require local shareholders in certain business sectors, as per the DNI
• Provides a formal structure for foreign investors to participate in Indonesia's growing economy

Setting up a PMA company involves several steps, including investment approval, company registration, obtaining necessary licenses, and ensuring ongoing compliance with Indonesian regulations. It's advisable to seek professional assistance when establishing and managing a PMA company to navigate the complex regulatory environment effectively.

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The minimum capital requirements for a PMA (Penanaman Modal Asing) company in Indonesia are as follows:

• Total Investment Value: The minimum total investment value for a PMA company is IDR 10 billion (approximately USD 670,000), excluding land and buildings.

• Issued and Paid-up Capital: The minimum issued and paid-up capital is IDR 2.5 billion (approximately USD 167,000).

• Foreign Ownership: If the company is 100% foreign-owned, the entire IDR 2.5 billion must be paid up.

• Joint Ventures: For joint ventures with Indonesian partners, the foreign portion of the IDR 2.5 billion must be paid up in proportion to the foreign ownership percentage.

• Exceptions: Some business sectors may have higher minimum capital requirements. It's essential to check the specific regulations for your industry.

• Proof of Capital: The paid-up capital must be deposited in an Indonesian bank account under the company's name and verified by a public accountant.

• Gradual Investment: The total investment of IDR 10 billion can be realized gradually over time, typically within 1-3 years, depending on the business plan submitted to BKPM (Investment Coordinating Board).

• 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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